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The "winner-take-all" labor market concept, as explained in Freakonomics, refers to a situation where a small number of people reap the majority of the rewards, while the rest receive very little. This concept is illustrated through the example of the Black Gangster Disciple Nation gang. In this scenario, the top boss, J.T., made over $100,000 a year, while the foot soldiers, who risked their lives selling on the streets, made very little. However, they were willing to take this risk in the hope that they might one day become rich and powerful. This is a reflection of a "winner-take-all" labor market, where the majority of the rewards are concentrated at the top.
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The author examines the history of the crack epidemic in the United States using the example of one gang, the Black Gangster Disciple Nation, explaining its hierarchy and how profits are distributed. Contrary to popular belief, not everyone gets rich from selling drugs. Rather, the gangs are a lot like corporations such as McDonald's, with a strict hierarchy and close control of the distribution of profits. The top boss, a dealer named J.T., made over $100,000 a year. His 'employees,' the foot soldiers who risked their lives selling on the streets, made very little. However, the foot soldiers were willing to take this risk in the hope that they, too, might one day become rich and powerful. Levitt calls this a "winner-take-all" labor market.
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Author Steven Levitt, working with journalist Stephen Dubner, shows how economic theories can be used to analyze social issues. Each of the six essays...
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