Levitt and Venkatesh’s (2000) analysis of the finances of a drug dealing gang in Chicago famously highlights how most dealers earn little more than the US minimum wage, due to the fact that “when there are a lot of people willing and able to do a job, that job generally doesn’t pay well” (Levitt and Dubner, 2005, p. 105). This assumes that drug dealing is a meritocratic economic activity that occurs in an open and competitive labour market. The example of drug-selling in Managua, Nicaragua, suggests that this is not necessarily the case. In this context, dealing occurred within a highly segmented labour market in which only a few individuals could participate, and within which there was no mobility. As a result, although the earnings associated with drug-selling were unevenly distributed, even those individuals associated with the lowest tier of drug dealing earned three to four times more than the median local wage. At the same time, the disparities between Chicago and Managua are also a function of the more decentralised organisation of drug trafficking in Nicaragua, as well as the fundamentally different natures of the wider national economies, and broader governance issues.

 

Seminar IBEI Rodgers