It appears the stereotype of all drug dealers rolling in the cash is mostly an urban myth...
A new book by Steven Levitt, Freakonomics, asks some of the questions you were possibly too scared or apathetic, to ask. One of these questions is why so many drug dealers in the USA are still living with their parents if they are supposed to be making so much money.
Like any good economist, he backs his data with hard evidence. In this case, the author, looked into the accounting books of a Chicago based crack gang. It turns out that most of the dealers made less than the minimum wage (which in the USA is truly abysmal) and only plied their trade on the off chance they might eventually work their way to the top where are few made the really big bucks. The author suggests that this is pretty much in line with wages across America — the huddled masses slaving away in legal jobs for a pittance while the fat cats are a definite minority.
Anyone with experience in the illicit drug scene knows that the vast majority of “dealers” aren’t wallowing in cash — they are usually just supporting their own habit, supplying a few close friends for the weekend party, or supplementing their main income, legal or otherwise.
The profits start to increase dramatically as you move up the distribution pyramid, but even here the police system can create false impressions of huge wealth. If a big heroin or speed bust is made, its net worth is usually based on street prices. The thing is the original importers get nowhere near the street price, as everyone picks up their profit down the distribution pyramid — just like any business. That IKEA lounge suite may retail for $1000 but chances are its Swedish creators will only collect a small fraction of that!
GO TO THE HOME PAGE
This article has been reproduced from http://www.quihn.org
by courtesy of QuIHN who hold copyright.
Please note that copyright varies throughout the site. If you would like
to reproduce information from this site, please note the author and contact
them.