Street gangs have existed in American history for around one hundred and forty five years. However, until the 1980’s, they were purely social organizations formed by member of typically inner city youths and young adults. However, the recent rise in the drug trade and the availability of crack-cocaine has led to the “corporatization” of street gangs. I will be analyzing two articles, the first ““An Economic Analysis of A Drug-Selling Gang’s Finances” by Steven D. Levitt and Sudhir Alladi Venkatesh, and the second “Youth Gangs as Pseudo-Governments: Implications for Violent Crime” by Russell S. Sobel and Brian J. Osoba. The first article discusses why joining a gang is not economically rational. This is mainly due to extremely high risks
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In 1995, when Levitt’s study was performed, the main source of economic income for gangs is through selling crack cocaine. Two other sources of income for gangs are the dues paid by newer gang members and money extorted from individuals or companies conducting business on the gang’s turf. Dues are paid by peripheral members, the “rank and file” to the gang to “pay respect”, however once a member joins the core gang members, (officiers, foot soldiers, and leaders) they no longer pay dues. In the four years during the study, starting in 1995, revenues for the entire gang rose from $18,500 per month in Year 1 to $68,400 per month in Year 4. Around 77% of the revenues during Year 4 were due to drug sales, demonstrating the importance of cocaine and drug sales in gang finances. However, these numbers should be considered a lower-bound on the actual numbers, due to the fact that many drug sales are “off the record” and have not been recorded. Typical wages of officers (lowest rank other than the “rank and files” whom pay dues and don’t earn wages) were $3,300 in Year 4, and foot soldiers earned $29,000 total, $470 …show more content…
Gangs typically do not use scale to weigh their drugs, instead they use street units, “bags”, as a form of measurement. Each “bag” contains an extremely small amount of crack-cocaine, and commonly sells for about $10. 1 kilogram of cocaine produces about 10,000 to 15,000 bags, making 1 kilogram of cocaine worth about $100,000 to $150,000. However these prices are not consistent, the selling price of cocaine varies based on demand and is especially low during gang wars, which will be discussed later in this
In 1995, when Levitt’s study was performed, the main source of economic income for gangs is through selling crack cocaine. Two other sources of income for gangs are the dues paid by newer gang members and money extorted from individuals or companies conducting business on the gang’s turf. Dues are paid by peripheral members, the “rank and file” to the gang to “pay respect”, however once a member joins the core gang members, (officiers, foot soldiers, and leaders) they no longer pay dues. In the four years during the study, starting in 1995, revenues for the entire gang rose from $18,500 per month in Year 1 to $68,400 per month in Year 4. Around 77% of the revenues during Year 4 were due to drug sales, demonstrating the importance of cocaine and drug sales in gang finances. However, these numbers should be considered a lower-bound on the actual numbers, due to the fact that many drug sales are “off the record” and have not been recorded. Typical wages of officers (lowest rank other than the “rank and files” whom pay dues and don’t earn wages) were $3,300 in Year 4, and foot soldiers earned $29,000 total, $470 …show more content…
Gangs typically do not use scale to weigh their drugs, instead they use street units, “bags”, as a form of measurement. Each “bag” contains an extremely small amount of crack-cocaine, and commonly sells for about $10. 1 kilogram of cocaine produces about 10,000 to 15,000 bags, making 1 kilogram of cocaine worth about $100,000 to $150,000. However these prices are not consistent, the selling price of cocaine varies based on demand and is especially low during gang wars, which will be discussed later in this