The Frontal Cortex

The Worst Job in America

…is being a crack dealer. You make much less than minimum wage, and have to live with your mother. Steven Levitt explains.

Comments

  1. #1 daksya
    September 21, 2006

    The real money is at the distribution level or above. Check out this slide from an unusally frank and informative British report, covered at my blog (linked in username)

  2. #2 SkookumPlanet
    September 21, 2006

    I’m reminded of the Norm McDonald SNL News parody on the best and worst jobs in America annual list. “And the worst job in the United States is….Crack Whore.”

    The following year it was, “And this year we have a new worst job in America……Assistant Crack Whore.”

    In the mid to late 80s I saw one of these lists in the local newspaper. According to the list I had worked in the penultimate best job and penultimate worst job in the country. Not a bad spread, although I loved the next to worst job. I guess I should mention my topper was computer programmer and the gutter was commercial fisherman. The outliers were, respectively, insurance actuarial and coalminer

  3. #3 Jackie
    September 21, 2006

    It’s generally recognized that working for someone else won’t make you rich. Your piece of the pie decreases rapidly with the number of middle ‘managers’ between you and the guy at the top as each person demands his ‘piece.’

  4. #4 Thinker
    September 22, 2006

    Freakonomics is a very interesting read, especially in their examples things where conventional wisdom and reality don’t match up at all.

    The crack dealer example is one; another is the decline of crime in the inner cities, which politicians and police have taken credit for. Levitt instead connects it with abortion rights: as a result of abortion becoming legal, fewer children were born to disadvantaged mothers, and as that cohort came of “criminal” age, it made a nice downward dent in crime rates.

    There are lots of othre examples in the book – it’s a good read!

  5. #5 Rachel
    September 22, 2006

    The co-author of Levitt’s paper, Sudhir Venkatesh wrote an amazing book about his time in the Chicago project the crack cocaine analysis is based on. The book is called “American Project” and is a really great read.

  6. #6 Spike
    September 22, 2006

    Thinker,

    Until you start thinking about it! I haven’t read the book, so I’m talking out of my ear, I know, but I haven’t found any answer yet to this question:

    Since lower-income mothers are more likely to use publicly funded facilities for their abortions, and middle-class and upper-middle class mothers are more likely to use privately funded facilities, and if (I don’t know if it’s true) publicly funded facilities are required by their funding sources to report the number of abortions, and privately funded facilities are not, would it then not skew the data to seem as if lower-income mothers have more abortions than the others?

    Does anyone actually know the distribution of abortions based on income? My personal experience is that middle- and upper-income women actually have more abortions per capita than do lower-income women. But that?s because I know more middle- and upper- income women who have had abortions than I know lower-income women who have.

    If it?s true that more middle- and upper-income women have abortions, then the drop in crime rates was due to having fewer rich assholes ripping people off! ;)

    See what I mean?

    Let?s look at the graph for drug distribution profits: The importers, who take the most risk, reap the most rewards. The cost of entering the importer business is quite high in terms of human and physical capital. Those speed boats don?t come cheap, nor do bribes to customs officials. The dealer on the street has a lot more competition, because it?s easier and less risky to enter the market (dealing carries a lower criminal penalty than importing, right?), so the profits are lower.

    The graph is no different than just about any other import-distributor-wholesaler-retailer relationship in any other commodity. Ask your grocer what her margin is, she?ll tell you that it?s less than 5%.

    If you want an interesting book that dispels certain myths of wealth, try ?The Millionaire Next Door.? The authors discovered that your average-joe small business owner usually has more net worth than a lawyer or doctor, mostly because the small business owner doesn?t ?live large? like a lawyer or doctor is required to do by society. (Link through to the report daskya references: Gucci makes 30% on their crap! Image costs money.)

    It?s not how much you earn, but how much you keep.

    (And that?s my job ? to help people keep more of what they earn.)

  7. #7 h_bluem
    September 25, 2006

    What is the purspose of rating worse->best jobs? If you have a job that you wish to be employed in isn’t that what is best for you?
    I am employable, but have no job because employment for a paycheck offers my family no net benefit. Is that best or worst? There is an entire chunk of the economy where people do things for free enabling other people to work. How could you ever really understand the economics of a country when people volunteer or do things for free or for themselves?
    For instance, if a woman goes to work does that generate more jobs? If she did stay home the work she does doesn’t get tallied and she pays no taxes on her labor, but doesn’t contribute to SS. If she does go to work she has to pay someone else to do the work that she was doing before and she has to pay taxes. Were more jobs created because money changes hands or is the work she was doing now tallied? The same is true for a man that is “handy around the house.” If you don’t call the plumber, are you responsible for increased unemployment?

  8. #8 Spike
    September 25, 2006

    h_bluem,

    You may well be! When people’s efforts are only counted by the cash flow that they produce, then pumping your own gas, or carrying your own loads is a crime.

    From the point of veiw of politicians – only work that generates taxable monetary exchanges is meaningful. All other work is denigrated.

    [This applies to union labor if you analogize the union leaders as the pols and union dues as the taxes.]