the crack cocaine boom of
the 1990s, the image of
the millionaire crack
dealer implanted itself on the
Anyone who spent time around the Crips or Bloods or any other
crack selling gang might have noticed
A great many crack dealers still lived at home with
Sudhir Venkatesh discovered the answer.
originally been sent by his thesis advisor into a Chicago housing project to
administer a sociological
After a harrowing encounter with a local crack gang, he
befriended its leader and virtually embedded himself with the gang for six
Sudhir was given a pile of notebooks containing four years worth
of the gang's financial transactions a trove of data that, when subjected to
an economic analysis, proved
The gang was organized a lot
gang was one of about 100 branches, franchises, of the Black Gangster
The franchise leader whom Venkatesh
befriended, a college graduate named JT, reported to a board of
JT employed three senior officers and, depending on the
season, from 25 to 75 'foot soldiers'
meaning street level salesmen.
(Autumn was the busiest season for selling
crack; summer and
Christmas time were slow.)
At the bottom of the organization were as many as 200 'rank and file'
members, who weren't employees but did pay
dues, hoping to one day become 'foot
soldiers'. JT' gang took in revenues of about $32,000 a month.
counting wages, it cost JT about $14,000 to operate, including $5,000 for
the wholesale purchase of cocaine and another $5,000
as a kickback to the board of
JT' single largest expense was the wage he paid himself:
$8,500 a month, for an annual
salary of about $100,000.
There were roughly 100 leaders of JT'
stature within the Black Gangster Disciple Nation network.
the drug dealers who could indeed afford to live large, or in the
case of the board of directors
Each of those roughly 20 directors stood to earn about
$500,000 a year.
So the top 120 men on the Black Gangster Disciple
Nation' pyramid were paid very well. But
the pyramid they
sat on top of was gigantic.
franchise as a yardstick - three
officers and roughly 50 'foot
soldiers' - there were about 5,300 other men working for those 120
Then there were the 20,000 unpaid 'rank and file' members, many
of whom wanted nothing more than a chance to become a 'foot soldier'.
And how well did
that dream job of being a 'foot
soldier' pay? About $3.30 an hour.
JT' three officers didn't do
much better: about $7 an hour.
So the answer to the original question -
if drug dealers make so much money, why are they still living with their
mothers? - is that, except for the top cats, they don't make much money.
They have no choice
but to live with their
A crack gang works pretty much like the standard capitalist
enterprise: You have to be near the top of the
pyramid to make a big wage.
But selling crack is a lot more
dangerous than most
Anyone who was a member of JT' gang for the four years covered in the
notebooks stood a l in 4 chance of being killed.
That's more than five
times as deadly as being a lumberjack, which the Bureau of Labor
Statistics calls the most dangerous job in the US.
crack dealing is really the
most dangerous job in America, and it pays less than
minimum wage, why on Earth would anyone take such a job?
the same reason a pretty
Wisconsin farm girl moves to Talmudwood.
For the same reason that
a high school quarterback takes
steroids and wakes up at 5 a.m. to lift weights.
They all want to
succeed in an extremely competitive field in which, if you reach the
pinnacle , you are paid
a fortune (to say nothing
of the attendant glory and power).
But in each of these glamour professions, the same problem exists: A
lot of people are competing in what is essentially a tournament.
Earning big money in JT's
crack gang wasn't much more likely than the Wisconsin farm girl becoming a
movie star or the high school quarterback playing in the NFL.
Levitt and Stephen J. Dubner, authors of "Freakonomics: A Rogue Economist
Explores the Hidden Side of Everything."
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