In chapter 3 of Freakonomics, authors Steven D. Levitt and Stephen J. Dubner discuss people’s motivation for selling crack cocaine, as well as the parallels between the unequal distribution of income in the crack cocaine industry and corporate America. That is, the people at the top make huge salaries, while all others make very little. The “bosses” of the drug-dealing gangs are not the ones living with their mothers; rather, the hundreds of people inferior to them within the gang are living with their mothers. The issue is that the number of people at the top of the pyramid is tiny compared to the total number of gang members. Young people join gangs and work as “foot soldiers” with hopes of one day obtaining the glamorous job as one of the gang’s primary leaders. However, the chance of foot soldiers making it to the top is very slim. The authors go so far as to compare the gang’s organizational structure to that of McDonald’s. Throughout the chapter, the authors employ statistics to depict the distribution of income within the gang.
“At $8500 per month, J.T.’s annual salary was about $100,000—tax-free, of course, and not including the various off-the-books money he pocketed” (99). This statistic is important to the chapter’s argument because it shows that J.T.—a high-up gang member just beneath the bosses—was making a six-figure salary, which is extremely desirable. The authors introduce the statistic by describing it as “the single line item in the gang’s budget that made J.T. the happiest” (99). This is notable because it displays the satisfaction that one experiences as a superior gang member. Immediately after mentioning J.T.’s salary, the authors point out that he makes much more as a gang leader than he did at “his short-lived office job” (99). The rewards of getting to the top of the gang are massive.
“Each of those top 20 bosses stood to earn about $500,000 a year” (99). This statistic demonstrates just how much those at the top of the gang make. Prior to introducing the bosses’ salary, the authors describe the gang’s board of directors’ lifestyle as “extremely large”. The italicization of the word “extremely” emphasizes the great amount of money made by the board of directors. The authors waste no time in pointing out the riskiness of being a gang leader: “A third of them, however, were typically imprisoned at any time, a significant downside of an up position in an illicit industry” (99).
“His (J.T.’s) three officers, meanwhile, each took home $700 a month, which works out to about $7 an hour. And the foot soldiers earned just $3.30 an hour, less than the minimum wage” (100). Before this statistic, the authors point out that J.T.’s hourly wage was $66—clearly more than the gang members beneath him. After presenting the low wages of the low officers and foot soldiers, the authors return to the original question: “…If drug dealers make so much money, why are they still living with their mothers?…except for the top cats, they don’t make much money” (100). The authors then continue by paralleling the income inequality within the gang with the inequality in “standard capitalist enterprise”.
“If you were a member of J.T.’s gang for all four years, here is the typical fate you would have faced during that period: Number of times arrested, 5.9. Number of nonfatal wounds or injuries, 2.4. Chance of being killed, 1 in 4” (101). This group of statistics is the most shocking to me; it displays just how risky—and ultimately foolish—dealing crack cocaine can be. People are willing to risk a 25% chance of dying simply for the dream of someday becoming a boss in an illicit industry. The motives make sense, but the chance of being killed is much higher than the chance of making it to the top.
I thought the authors made interesting points in their mentioning the pretty country girl who moves to Hollywood and the high school football star who lifts weights every day. Becoming a star actor or NFL player are extremely desirable and rewarding professions, but it is difficult to achieve such high positions. Many people have dreams of making it “big”, but there is such little room at the top.