Drug Dealing as a Low-Wage Occupation

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Algernon Austin speaks on The Covenant with Black America for The New Haven Black History Coalition’s Annual Black History Celebration, February 24th, 10am, Gateway Community College, Long Wharf Campus
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Before we can address the problem of drug dealing in black communities and craft a sensible criminal justice policy, we need be able to see it from its least discussed angle—as a low-wage occupation. The following is an excerpt from “Myths about Blacks and Crime” in Getting It Wrong. The footnotes have been deleted.

A study of a Chicago gang in the mid-1990s by Steven D. Levitt and Sudhir Alladi Venkatesh found that the leader made $100,000 a year, the three officers below him made $12,000 a year, and the 50 “foot solders” earned approximately minimum wage. Additionally, there were about 130 “rank and file” members who earned nothing for their gang affiliation but paid dues to the gang to be a member for protection, status or the rights to buy and sell drugs independently. In other words, only one man out of nearly two hundred became relatively rich from being in a street gang. Most of the rest remained in poverty or close to it. Many of the foot soldiers and rank and file actually did legal minimum-wage work to supplement their drug earnings; or, one could argue, they were drug dealers to supplement their meager or nonexistent legal earnings.

The wages earned dealing drugs for a street gang are particularly bad when one considers the dangers of the job. In the 1990s, gang members had a good chance of being injured, a very good chance of being arrested and an excellent chance of being killed. Their chance of being killed over a four-year period was 1-in-4. This risk of being killed made being a street-gang drug dealer 50 times more dangerous than the most dangerous legal occupation.

If street gang drug-dealing is so bad, why do many young black men do this miserable work? While the dream of winning the “tournament” and making it to the number one spot and earning $100,000 a year is no doubt part of the answer, it is likely only a small part. There are more immediate and realistic economic motivations.

The work options for a young, black, male, high-school dropout from a poor, urban community are not good. Street-gang drug dealers tend to be young, black, male high school dropouts from poor urban communities. In the mid-1990s, the employment rate for 16 to 24-year-old black men with a high school diploma or less was less than 50 percent while for comparable whites and Hispanics it was about 75 percent. Only about 45 percent of the foot soldiers in the Chicago gang were able to obtain legal work. Most likely those jobs paid roughly minimum wage.

For at least half of the young men in the Chicago gang, there are no visible options for legal work. For the half that have legal work, they can barely make more than minimum wage. We should also realize that a drug-dealing minimum wage may yield 10 to 20 percent more take-home money than a legal minimum wage because taxes and benefits are not withheld from illegal wages. There are clear financial incentives for these young men to earn some money or additional money in a drug-dealing gang.

The economist Steven D. Levitt emphasizes the “tournament” and “glamour profession” aspect of being a street-gang drug dealer, but he does not seem to fully appreciate how few options these young black men have. He argues:

Earning big money in the 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. But criminals, like everyone else, respond to incentives. So if the prize is big enough, they will form a line down the block just hoping for a chance.

But farm girls who are dreaming of becoming movie stars and high school quarterbacks dreaming of the NFL do not inquire about how they can become janitors.

When Venkatesh conducted his ethnographic research with the Chicago gang, gang members repeatedly asked him about how to obtain what they called a “good job”: working as a janitor at the University of Chicago. If they were truly focused on winning the drug-dealing “tournament,” they would not be so eager to become a janitor. One gang member stated plainly:

. . . everyday people struggling just to survive, so you know, we just do what we can. We ain’t got no choice, and if it means getting killed, well s---, it’s what n----- do around here to feed their family.

For this gang member, drug dealing feels like his only option, not a “glamour profession.”

Levitt and Venkatesh present other evidence that the foot soldiers are responding to their opportunities for earning money in the present, not in the distant future when they imagine they will win the “tournament.” Levitt and Venkatesh find evidence that the foot soldiers’ “labor market participation responds to changing wages in the drug trade.” In other words, when foot soldiers are making enough money dealing drugs, they leave their legal jobs, and when they are earning too little dealing drugs, they look for legal work.

These young men in street gangs are choosing working over not working or making extra money to supplement their legal low-wage work to try to lift themselves out of poverty rather that being complacent about being poor. It is a perverse type of work ethic, but it is still a work ethic. American society needs to provide these young men with better options. Certainly, they should have graduated from high school, but it is still the case that even with a high school diploma their unemployment rate would be higher than for white men with a high school diploma. The American labor market prefers white men over black men. Even white male high school dropouts are more likely to find a job and a better paying job than black male high school dropouts. This is part of the reason for the high rates of black street crime.

--Algernon Austin, Ph.D.

Next Week: Putting It All Together for a Just Criminal Justice Policy


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