Latest news with #LittleBossesEverywhere:HowthePyramidSchemeShapedAmerica
Yahoo
21-05-2025
- Business
- Yahoo
An Awkward Truth About American Work
A few years ago, a cheeky meme made the rounds on the internet—a snappy rejoinder to a question about dream jobs: 'I do not dream of labor.' The witticism, sometimes misattributed to James Baldwin, began to spread a few months into the coronavirus pandemic, as the shock of mass layoffs started to give way to broader dissatisfaction with work. Before long, an untethering from office culture, combined with the security of a tight labor market, led many workers to quit their 9-to-5 jobs. Nobody, Kim Kardashian declared, wanted to work anymore—but that wasn't exactly true. More plausibly, the "Great Resignation" marked a shift—perhaps a permanent one—in when, where, and how people wanted to work. Moments of cultural change present openings for cons. Early in the pandemic, the number of multi-level-marketing schemes (or MLMs) exploded online. Such enterprises invite non-salaried workers to sell goods and then also earn commissions by recruiting more salespeople; the Federal Trade Commission has over the years outlined subtle legal differences between MLMs and pyramid schemes. As millions of Americans lost or quit jobs, MLM advocates on the internet made an enticing pitch: Work as we knew it wasn't cutting it anymore; other options were out there. Framing the chance to hawk leggings or makeup or 'mentorship' as an opportunity that could yield flexible income and a sense of community, they promised a kind of life that was too good to be true. A few years ago, the journalist Bridget Read started looking into the outfits behind such appeals. Initially, by her own account, Read couldn't really understand how MLMs worked. But some big questions stuck with her—among them, why exactly they were legal. She lays out what she's learned in her engaging new book, Little Bosses Everywhere: How the Pyramid Scheme Shaped America, which exposes some awkward truths about the nature of American work. Weaving in sympathetic portrayals of women who lost money and friends after working with MLM schemes, she recasts them as victims of a multigenerational swindle. [Read: LuLaRich reveals a hole in the American economy] MLM participants surely drive their friends and family crazy with their hard sells; they are also, in Read's telling, marks. She cites a 2011 analysis that found that 99 percent of participants in one MLM lost money, and she exhaustively catalogs the predations of the sector writ large. Read writes with scorn about the industry's early architects, who made outrageous health claims and touted their companies' 'profits pyramid,' and about right-wing opportunists who expanded MLMs' power and reach—especially the founders of Amway, a massive company with connections to Ronald Reagan and Donald Trump. But she never disparages her sources, whose stories of drained bank accounts and dashed dreams she portrays only with empathy. She threads the tale of a pseudonymous Mary Kay seller, a military veteran struggling to make ends meet, throughout the book. The woman loses more than $75,000. These vignettes keep the human toll of the schemes top of mind. Read's indictment of MLM outfits is predictable enough, but her research also reveals how much corporate America has in common with this shady economy, which has long been dismissed as a kooky sideshow. Corporations have borrowed from the methods of MLM companies—hiring large, contingent workforces; pushing employees to think like entrepreneurs; and lobbying hard for friendlier regulations. MLMs turn out to be more closely aligned with the center of corporate life (and political power) than many people might like to think. A key innovation of the industry was to rely on a fleet of temporary workers. During the Great Depression, when Franklin D. Roosevelt's administration was expanding the social safety net and implementing muscular work protections, an organization then called the National Association of Direct Selling Companies agitated for a carve-out that would designate salespeople as 'independent contractors' rather than employees. Historically, such contractors had occupied a tiny niche, but in a time of expanding regulation, classifying workers in this way became a handy loophole. This category later set the template for tech start-ups, including Uber and DoorDash, that challenged traditional full-time employers. As of July 2023, about 4 percent of the American workforce had temporary jobs as their main or only role, and an additional 7.4 percent of Americans were independent contractors, according to a survey from the Bureau of Labor Statistics. That percentage may seem small, but it encompasses millions of workers and outnumbers many sectors of employment; other surveys find that tens of millions of Americans do such work for supplemental income too. As Read writes, 'The part-time, low-paid work that direct selling pioneered' now 'defines our current labor market rather than covers its gaps.' The low quality of many legitimate jobs has long provided cover for shadier schemes. Squint, and an MLM racket doesn't look all that different from the work of an influencer or telemarketer or door-to-door-salesman. If a major indictment of MLMs is that many of their contractors don't seem to actually sell much at all, well—the same could be said of many other jobs today. And the gig economy isn't walled off from the rest: Many Americans still have full-time, union-eligible jobs, but a lot of them dip into temporary or part-time work to make ends meet. The Mary Kay annual meeting features a special cheering moment for teachers who sell makeup on the side. [Read: When multilevel marketing met Gen Z] Many of the messages that MLMs adopt to reel in workers rely on a central contradiction, criticizing the corporate grind while extolling the free market. Amway recruiters, for one, have explicitly used anti-establishment language in their pitch: When you're working a 9-to-5, you are in the 'rut,' but when you break free and set your own hours, you are living 'the dream.' In fact, you are often forsaking security for precarity—or worse. As Read and others have written, the opportunity quickly becomes a disaster for all but a very lucky few. MLMs and their boosters deny that the companies are pyramid-shaped—Amway, according to one hagiographer, is shaped more like 'a flower.' But each, in Read's telling, also takes the form of a fun-house mirror. Throughout the history of MLMs, contractions and collapses in the broader economy have been good for them. Direct selling was hailed as 'counter-cyclical' and 'depression-proof' during the 1930s, Read notes. In the 1970s, widespread white-collar layoffs and looming stagflation presented another opening. 'In the direct selling business hard times are good times,' the founders of Amway wrote in a 1974 edition of their corporate magazine. In more recent decades, the sector's free-market ethos dovetailed with new cultural moods: MLMs both shaped and reinforced the values of the greed-is-good 1980s, as well as the self-help-obsessed aughts and the 'grindset' ethos that followed the 2008 recession. Seizing opportunities to grow businesses is, of course, what companies have always done. But this industry seized them to advance practices that flirted with, and sometimes qualified as, outright fraud. Read ably explains why these businesses have appealed to generations of underpaid and insecure American workers, and she argues that it's not greed or stupidity that drives people (especially women juggling family responsibilities) into the arms of the schemes but the decline of middle-class stability. MLM opportunities promise what American jobs used to: security, freedom, dignity. Those promises have consistently failed to materialize. But the fact that so many are desperate to get in on the schemes each year is not a credit to the broader job market. A person well served by the economy is unlikely to salivate at the prospect of making extra cash by pushing lipsticks on the side. Today, many workers at more conventional jobs face the havoc of just-in-time scheduling and inconsistent shifts; these employees seek out more flexible arrangements in spite of their downsides. In Read's telling, MLMs are a toxin masquerading as a cure. Among their many ruses is their insistence on a message of empowerment: that participants are 'bosses' or 'owners.' What makes this easier to pull off is the fact that MLM outfits don't have the kind of central, visible leader the public associates with many higher-profile schemes—no Sam Bankman-Fried or Bernie Madoff or Elizabeth Holmes. Read names the leaders who benefit, and in doing so, she delivers a damning portrait of those who take advantage—and she humanizes the people they rip off. Investigating an industry notorious for doublespeak and euphemism, she calls things what they are. Article originally published at The Atlantic
Atlantic
21-05-2025
- Business
- Atlantic
The Shadowy Industry That Shaped American Work
A few years ago, a cheeky meme made the rounds on the internet—a snappy rejoinder to a question about dream jobs: 'I do not dream of labor.' The witticism, sometimes misattributed to James Baldwin, began to spread a few months into the coronavirus pandemic, as the shock of mass layoffs started to give way to broader dissatisfaction with work. Before long, an untethering from office culture, combined with the security of a tight labor market, led many workers to quit their 9-to-5 jobs. Nobody, Kim Kardashian declared, wanted to work anymore—but that wasn't exactly true. More plausibly, the "Great Resignation" marked a shift—perhaps a permanent one—in when, where, and how people wanted to work. Moments of cultural change present openings for cons. Early in the pandemic, the number of multi-level-marketing schemes (or MLMs) exploded online. Such enterprises invite non-salaried workers to sell goods and then also earn commissions by recruiting more salespeople; the Federal Trade Commission has over the years outlined subtle legal differences between MLMs and pyramid schemes. As millions of Americans lost or quit jobs, MLM advocates on the internet made an enticing pitch: Work as we knew it wasn't cutting it anymore; other options were out there. Framing the chance to hawk leggings or makeup or 'mentorship' as an opportunity that could yield flexible income and a sense of community, they promised a kind of life that was too good to be true. A few years ago, the journalist Bridget Read started looking into the outfits behind such appeals. Initially, by her own account, Read couldn't really understand how MLMs worked. But some big questions stuck with her—among them, why exactly they were legal. She lays out what she's learned in her engaging new book, Little Bosses Everywhere: How the Pyramid Scheme Shaped America, which exposes some awkward truths about the nature of American work. Weaving in sympathetic portrayals of women who lost money and friends after working with MLM schemes, she recasts them as victims of a multigenerational swindle. MLM participants surely drive their friends and family crazy with their hard sells; they are also, in Read's telling, marks. She cites a 2011 analysis that found that 99 percent of participants in one MLM lost money, and she exhaustively catalogs the predations of the sector writ large. Read writes with scorn about the industry's early architects, who made outrageous health claims and touted their companies' 'profits pyramid,' and about right-wing opportunists who expanded MLMs' power and reach—especially the founders of Amway, a massive company with connections to Ronald Reagan and Donald Trump. But she never disparages her sources, whose stories of drained bank accounts and dashed dreams she portrays only with empathy. She threads the tale of a pseudonymous Mary Kay seller, a military veteran struggling to make ends meet, throughout the book. The woman loses more than $75,000. These vignettes keep the human toll of the schemes top of mind. Read's indictment of MLM outfits is predictable enough, but her research also reveals how much corporate America has in common with this shady economy, which has long been dismissed as a kooky sideshow. Corporations have borrowed from the methods of MLM companies—hiring large, contingent workforces; pushing employees to think like entrepreneurs; and lobbying hard for friendlier regulations. MLMs turn out to be more closely aligned with the center of corporate life (and political power) than many people might like to think. A key innovation of the industry was to rely on a fleet of temporary workers. During the Great Depression, when Franklin D. Roosevelt's administration was expanding the social safety net and implementing muscular work protections, an organization then called the National Association of Direct Selling Companies agitated for a carve-out that would designate salespeople as 'independent contractors' rather than employees. Historically, such contractors had occupied a tiny niche, but in a time of expanding regulation, classifying workers in this way became a handy loophole. This category later set the template for tech start-ups, including Uber and DoorDash, that challenged traditional full-time employers. As of July 2023, about 4 percent of the American workforce had temporary jobs as their main or only role, and an additional 7.4 percent of Americans were independent contractors, according to a survey from the Bureau of Labor Statistics. That percentage may seem small, but it encompasses millions of workers and outnumbers many sectors of employment; other surveys find that tens of millions of Americans do such work for supplemental income too. As Read writes, 'The part-time, low-paid work that direct selling pioneered' now 'defines our current labor market rather than covers its gaps.' The low quality of many legitimate jobs has long provided cover for shadier schemes. Squint, and an MLM racket doesn't look all that different from the work of an influencer or telemarketer or door-to-door-salesman. If a major indictment of MLMs is that many of their contractors don't seem to actually sell much at all, well—the same could be said of many other jobs today. And the gig economy isn't walled off from the rest: Many Americans still have full-time, union-eligible jobs, but a lot of them dip into temporary or part-time work to make ends meet. The Mary Kay annual meeting features a special cheering moment for teachers who sell makeup on the side. Many of the messages that MLMs adopt to reel in workers rely on a central contradiction, criticizing the corporate grind while extolling the free market. Amway recruiters, for one, have explicitly used anti-establishment language in their pitch: When you're working a 9-to-5, you are in the 'rut,' but when you break free and set your own hours, you are living 'the dream.' In fact, you are often forsaking security for precarity—or worse. As Read and others have written, the opportunity quickly becomes a disaster for all but a very lucky few. MLMs and their boosters deny that the companies are pyramid-shaped—Amway, according to one hagiographer, is shaped more like 'a flower.' But each, in Read's telling, also takes the form of a fun-house mirror. Throughout the history of MLMs, contractions and collapses in the broader economy have been good for them. Direct selling was hailed as 'counter-cyclical' and 'depression-proof' during the 1930s, Read notes. In the 1970s, widespread white-collar layoffs and looming stagflation presented another opening. 'In the direct selling business hard times are good times,' the founders of Amway wrote in a 1974 edition of their corporate magazine. In more recent decades, the sector's free-market ethos dovetailed with new cultural moods: MLMs both shaped and reinforced the values of the greed-is-good 1980s, as well as the self-help-obsessed aughts and the 'grindset' ethos that followed the 2008 recession. Seizing opportunities to grow businesses is, of course, what companies have always done. But this industry seized them to advance practices that flirted with, and sometimes qualified as, outright fraud. Read ably explains why these businesses have appealed to generations of underpaid and insecure American workers, and she argues that it's not greed or stupidity that drives people (especially women juggling family responsibilities) into the arms of the schemes but the decline of middle-class stability. MLM opportunities promise what American jobs used to: security, freedom, dignity. Those promises have consistently failed to materialize. But the fact that so many are desperate to get in on the schemes each year is not a credit to the broader job market. A person well served by the economy is unlikely to salivate at the prospect of making extra cash by pushing lipsticks on the side. Today, many workers at more conventional jobs face the havoc of just-in-time scheduling and inconsistent shifts; these employees seek out more flexible arrangements in spite of their downsides. In Read's telling, MLMs are a toxin masquerading as a cure. Among their many ruses is their insistence on a message of empowerment: that participants are 'bosses' or 'owners.' What makes this easier to pull off is the fact that MLM outfits don't have the kind of central, visible leader the public associates with many higher-profile schemes—no Sam Bankman-Fried or Bernie Madoff or Elizabeth Holmes. Read names the leaders who benefit, and in doing so, she delivers a damning portrait of those who take advantage—and she humanizes the people they rip off. Investigating an industry notorious for doublespeak and euphemism, she calls things what they are.
Yahoo
21-05-2025
- Business
- Yahoo
Multi-level marketing is a scam — here's why people fall for it
Most Americans have been aware for some time that multi-level marketing schemes are bad — either through recent books or documentaries like LuLaRich. But did you know exactly how bad? Bridget Read, author of "Little Bosses Everywhere: How the Pyramid Scheme Shaped America," wasn't satisfied with their answers or explanations of what it was, why they've become so influential and how they are able to continue exploiting so many of the most vulnerable Americans with little transparency and government oversight. Our conversation was timely not only because of the history of multi-level marketing which, it turns out, has ties to right-wing free market ideology and anti-communism of the post-war era — the intellectual roots of the second Trump era. It's also pertinent because Trump 2.0 has unleashed a growing number of crypto scams, which Read sees as the continuation and the latest evolution of multi-level marketing ethos and methodology. Read discussed her research into the history of the 80-year-old industry, her firsthand experience of the MLM seminar event as an attendee and why Congress is unlikely to do anything about these practices anytime soon. This interview has been edited for length and clarity. There have been several books like Vitamania that you mention in the book and several other works that explore MLMs, including the recent documentary about LuLaRoe. What was the moment that made you want to dive in more and take another look at this topic? I wrote a short article about multi-level marketing during the height of the pandemic in 2021 for New York Magazine, because these companies experienced a little bit of a boom with all kinds of people, especially women stuck at home and looking to supplement their income. And I just couldn't really figure it out; so many things didn't make sense. And the work that was out there, including that LuLaRich documentary, really didn't get to the bottom of where it came from. Well, why is it so controversial? Where does it come from? Why is this thing legal? So there really just wasn't something definitive, and that's what I was searching for myself as a journalist. And then when I started digging into the story of MLM, it went so far back — because it was invented in 1945 — that it seemed like only a book enables you to tell such a big story and to dig as much as you need to dig. I had no idea that the MLM industry was 80 years old. What surprised you the most in your research for the book? The most surprising thing right away was that, once you really look at the primary source material on multi-level marketing, which at the time was called pyramid selling, they really didn't hide how it worked. It was a system where people were rewarded for buying in — that was the innovation at the time. Instead of just buying products and then being rewarded on how much you actually sold, you could get rewarded on just how many people you brought in under you, which they called purchase volume. And of course, now in the United States we consider legally a pyramid scheme to be just that — a system in which you're rewarded based on how much you're paid to bring in other people to also buy into the system. Legally, that's our precedent for a pyramid scheme. So when you look into the company itself, Mytinger & Casselberry, which eventually was neutralized and then was bought by Amway. And the industry wants to distance itself from multiple marketing, from a pyramid scheme. Again, there's so much evidence that there really isn't any difference. So the story that we've been telling in the U.S. for several decades, by this point that there's pyramid schemes and there's legitimate multi-marketing, right away that broke down for me. Do you feel like the MLM concept is reinventing itself with the new technology, with social media, with crypto? Yes, and it always has done that. That's a historical pattern over the last 20 years, in the 2008 Great Recession. MLM businesses pivoted from traditional marketing to calling themselves internet-based businesses, or work-from-home businesses. Many of them did away with the door-to-door aspect entirely, and it was all about recruiting people on the internet. Maybe they're coaches or they're having access to your proprietary program. Maybe they're learning how to do digital reselling anytime they have to buy something, and they get rewarded based on how many other people they're inducing to buy. That's how multi-marketing operates, and that's a pyramid scheme. In the olden days, you might have to lie about how rich you are and maybe borrow a car. But now you can just pose in front of a car or in front of a fancy house and make it seem like you live that lifestyle really easily. In January, the Federal Trade Commission proposed a new rule on deceptive earnings claims. Is that a step in the right direction? So FTC rules themselves are a little tricky, because they're not laws. This is not legislation, and so actually trade regulations can be rejected by Congress. So that's another kind of obstacle. There are two rules that were initiated: One is called a business opportunity rule, and that would bring MLM into a different category of business opportunity where they would be subject to more just financial disclosure. And the other one is an earnings rule that would require MLM recruiters to be very upfront about how much you can really make an MLM. The rulemaking process was stalled by the new FTC administration under Trump, and they have signaled that while the FTC remains active on some issues, the industry has signaled that they aren't as worried. They feel that they'll be able to really mount a robust defense if these rulemakings do get through the process. Even if they even make the rules, they'll lean on their members in Congress to resist the actual rulemaking. So it's a step in the right direction. I think, unfortunately, there's still a huge amount of resistance to actually doing anything this way. One big part of the problem that your book is helping me understand a little bit more is just the lack of transparency. We have no idea how big this industry really is. If those companies were really transparent about how many of those people there are, and then how many people are actually seeing any success in the company, then their numbers would be even worse than when they are forced to disclose it. I think that it would show a lottery. It would show hundreds of thousands of people paying in and a tiny fraction winning. And so that's why they don't do it. In the book you discuss deep roots between the MLM industry and the right wing, free market conservative thought leaders. Was that surprising? We've always known, especially if you know anything about Amway, that multi-level marketing has tended to have a real right-wing bent politically and its free market, pseudo-populist rhetoric has long been associated with multiple marketing. And of course, you could draw that line to Donald Trump, but I really didn't know how far back that went, and that that predated the Amway founders with Leonard Read, who is a very influential free enterprise ideologue. You know, you could call him a libertarian; he was very influential in the free market, purist movement that rose with Ronald Reagan over the course of the 1970s and 1980s. And he showed up at the 10-year anniversary of the first multi-level marketing company, before the Amway founders were real political figures. So already MLM had this seed of a political movement. And what I've discovered in my research is that it really was an anti-communist project. Ideologically, it was a way to spread person to person on a grassroots level, real anti-communist views, a really anti-collectivist kind of model of thinking, where really the only way one can achieve success and even democracy is through ruthless, sort of capitalist accumulation and having every single individual be a deeply unregulated economic actor in a pure free market that's not impeded at all by the state. You actually got to attend one of the MLM events in person, the Mary Kay convention in Dallas. What was that experience like? It felt really important to me to try to be really as close as possible to the actual companies themselves and people involved in them, and not only speak to people who'd already been in and out. The conventions are really the high point for almost all distributors you talk to who do it long term, it really is the thing that makes a whole year of really hustling and hustling worth it. It was a moving experience. It was emotionally stirring. And I think that made me really understand how emotionally manipulative it is to be with all other people who are equally, if not more invested financially and emotionally with you, and to have everybody almost recommit every year together. That's what the convention does, if you were maybe feeling badly about how you were doing, should I really be spending money on this every year? The convention helps you keep going, because you're like, "Oh, I love my sisters, and we're having so much fun." So, yeah, it was a really important thing to do. And journalists don't get to be inside these spaces because they're closed to the public, so it was a priority for me to try to.
Washington Post
25-04-2025
- Business
- Washington Post
Why the very American fantasy behind multilevel marketing won't die
What are we buying when we purchase a product? Sometimes, the item itself, something as unglamorous and useful as laundry detergent or ink for the printer. But just as often, we are buying a fantasy — an assurance that we are a certain kind of person, a dream of a different kind of life. Companies that engage in multilevel marketing, or MLM, are especially deft at peddling this sort of intangible temptation. As the New York magazine journalist Bridget Read documents in her gripping and instructive new history, 'Little Bosses Everywhere: How the Pyramid Scheme Shaped America,' they have to be, because they barely make a pretense of selling actual products.
