New Zealand now has over 7,000 gang members, an increase of some 13% from a year previous. Many theories have been put forward to explain this sudden rise, but none of them are adequately grounded in economic psychology. This essay makes a seemingly preposterous argument: that it makes more sense to join a gang nowadays than to work.
According to the Real Estate Institute of New Zealand, the average New Zealand house price is now $810,000, up 19% from a year earlier. According to interest.co.nz, the ratio of this average house price to the median household income is now 8.43.
This ratio was 5.87 as recently as July 2016. Even back then, it meant that a working couple able to save 25% of their total wage could expect to take over 23 years to pay for the average house. That was considered “severely unaffordable” by all honest commentators. But it’s now almost 50% worse than even that.
These are terrifying statistics for anyone at, or near, the bottom of the educational ladder. The average household income, according to the stats mentioned above, is $96,114. That means over 33 years for the average couple, saving 25% of their total wage, to pay for the average house. Any household with a minimum wage earner will likely have it much harder than this.
This means it’s now realistically impossible for a significant, and growing, proportion of New Zealand workers to ever own a home on their wage. It’s even more difficult for those who aren’t part of a steady couple.
Historically speaking, those at the bottom of society have always had one universal method of radically improving their position: crime. And the bigger the crime, the better. Many people say that crime doesn’t pay, but this is only true for the lower classes. Pull off a big enough heist and you can go up an entire league.
As Chuang Tzu once observed: “The petty thief is imprisoned but the big thief becomes a feudal lord.” Petty thievery won’t get you into a house that you can raise a family in, but full-time drug running is another story.
A young New Zealander without an education might have no chance of ever owning a house by working for one, but there’s a ready alternative: to join a gang, and get $810,000 through crime.
It’s common for dedicated meth users to go through $1,000 of meth in a week. Someone supplying it need only have a dozen customers with this level of demand and they could sell $600,000 worth of meth in a single year. Assuming $400,000 of expenses in precursor/bulk wholesale costs, rip-offs and fees to one’s own gang so as to keep covering for your operations, this means an income of $200,000 per year – tax free.
The only major downside is a small risk of getting killed or imprisoned.
Gangbanging is relatively dangerous, but the vast majority of gang members manage to conduct their affairs without getting killed. In recent years, New Zealand has averaged about 61 homicides a year. Even assuming that the majority of those were gang-related, it means that a person in a gang has little more than a 0.5% chance of being killed in any given year.
Even if this risk is 50 times higher than the risk of being murdered if one isn’t in a gang, it’s still a fairly low risk. It means that, after four years of selling meth and saving $4,000 a week, one would have earned enough to buy the average house, with a mere 2% chance of getting killed (approximately).
The risk of being imprisoned is also relatively minor. Furthermore, as shit as prison might be, it’s not a whole lot worse than busting a gut for 40 hours a week and being left with nothing after taxes, bills and rents are paid. At least rent is free in prison, and while there you can easily make the contacts that will help you sell meth more discreetly once you get out.
In the cold light of day, a young New Zealand man, one with ambitions to own a home so that he can raise a family in it, is better off joining a gang and getting taxed at 0% than getting educated, earning a professional wage and getting taxed at 39%. He can actually own a house the first way, whereas the second demands decades of work for partial equity in one. Even if he does manage to own a house the second way, he likely won’t have enough spare energy to raise a family in it.
What many middle-class people – especially those who inherit wealth – don’t realise is that few people join gangs purely out of malice and spite. Some of them join gangs because, on balance, they can have a better life in one. The prospect of working for 50 years to merely own some equity in a cold, damp house is a miserable one. It’s not surprising that the more daring of the country’s young men are tempted to gamble for a better life.
The solution to New Zealand’s rising gang problem will inevitably be a multifaceted one, but the basis of it must be enabling even poorly-educated workers to own their own home and raise a family. As long as workers aren’t getting paid enough for this to be possible, they’re better off joining gangs.
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You are so right & curiously low risk in many respects. Also they appear to look after their people by renting large rural properties for them to stay from prison or rehab which is very supportive.
To be honest if this covid nonsense continues and robs people of their livelihoods and income, the above becomes more realistic and appealing.
Gangs are probably a replication of the prehistoric organisation of human groups, so as modern civilisation collapses the gang model will make a comeback.