Entrepreneurship and informal economies

Sighted in an East Memphis neighborhood.

I’m very fascinated by the ways in which people supplement or create incomes through informal and underground economies. These are strategic methods used to create household or individual income and are untaxed and sometimes illegal. My curiosity centers around the questions of what causes people to go into these forms of business and how they decide what to sell (presumably this has to do with supply and demand economics). What needs, desires and structural forces are behind this crafty entrepreneurship? Are the profit margins worth the effort, and how are prices determined? How much is made on average, and what is done with the income? Are there neighborhood territories marked by vendors, goods hawkers or service-providers, as there are with some illegal drugs and services?

I think my curiosity stems in part from my own lifetime of entrepreneurship, which started as early as the rite of passage undertaken by many American children – the corner lemonade stand, complete with cardboard box storefront and funded by investors who were willing to take a financial risk (a.k.a. your parents). Then there was middle school, when I sold candy on the school bus in the mornings. In high school, I also sold candy, but – get this – I did it in my 9th grade math class (my teacher allowed me to do this during the first five minutes, perhaps because he was impressed with my interest in business, but more likely because he was a lazy teacher who didn’t really give a damn). From high school and on, there was never a moment in which I wasn’t involved in some method of making money for myself, probably because it was a way for me to feel like I had power as a minor, and because I wanted things for myself. And this was aside from the “regular” jobs I had in retail. When I was in college, I worked at the library, for the student paper, as a writing tutor, and as an assistant in the anthropology department. As for my informal income, I ran an Etsy shop, babysat, pet sat, house sat, tutored, cleaned offices, catered and served at private parties, did the books at a local mechanic shop, and the list goes on.

Moving onto fieldwork, some examples I’ve encountered include a woman who was the “candy lady” on her street – she sold candy and snacks out of her front door to add to the income generated from her husband’s wages as well as government assistance. In 2009, I tutored two twin brothers whose mom sold homemade freeze-pops made from Kool-Aid or fruit juices as well as candy, chips and snacks. The goods that were for sale were stored in a separate pantry and cooler, in a side room away from the kitchen.

Another woman I met during a grad school project had what was comparable to a miniature drug store on a bookshelf, which was strategically placed by a side door where neighborhood customers presumably came to purchase goods such as nail polish, ibuprofen, and other cosmetics and medicine.

One last woman, who was the mother of a young girl I knew personally, hosted pool parties/cookouts during the summer (and for back-to-school) at her home for the neighborhood children. She charged $2 per person to get in the door. The young girl I was acquainted with mentioned that another lady down the street sold snacks and cigarettes.

These last examples have much in common – the entrepreneurs were African American women with household incomes on the lower end of the scale, and who lived in economically disadvantaged neighborhoods.

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