Tag Archives: poor

Getting pulled in by Amway’s Pyramid Scheme Crap

Business, Economics, Politics, , , , , , ,

wealth povertyRecently, there’s been a lot of talk about Amway (headquartered in Ada, Michigan) because it was ridiculed on the very popular Netflix show House of Cards. As a result, Amway has responded, as well as Dick DeVos (the son of one of the co-founders of Amway). Basically, what it boils down to is that the company claims it is being misrepresented and everyone who has ever dealt with the company (judging from the comments on each one of these stories) feels the representation is more than deserved and probably overdue as well.

So, obviously, you’re probably wondering what Duane thinks about this whole thing. And fortunately, I have not only an opinion, but a story that sounds a lot like many of the stories that people have been telling in the comments section of each of those stories. You see, Amway has become a really powerful company that basically sets the tone for most of the discussions over this issue. The little people, like us, rarely get a word in because we don’t have the money to pay for media access like the people who run the pyramid schemes in the first place.

So, let’s go back some years ago when I was working as a low level executive for a major hotel chain. I was in their security department and out of the blue I received a phone call from someone who acted on the phone like he was a really good friend of mine. At the time, I had a lot of business associates who I kind of knew, so I was polite, and he then talked about a business opportunity that might benefit me in the future. As I was somewhat looking for a new job at this time (and most likely that was how the guy found me), I responded positively and ended up meeting this guy and his wife at another hotel in the city where some meeting was taking place. As I’m sure you suspect, that meeting was one of those Amway meetings. Little did I know at the time that it was just a part of their elaborate scheme. However, it did provide me with some insights into their financial toolkit.

What was interesting was that this was during the time when Amway’s name was dirt to most people. So the company being hailed was some other named company that claimed to have no connection with Amway. As a matter of fact, when this symposium started, and I heard the sales pitch, I turned to my “friends” and asked them if this was “Amway” and they said no, that there was definitely no connection. When they gave me a ride back home, all of the crap in their car (tissues and everything else, and I mean a ton of crap) all had the name “Amway” on them. In other words, the company was still recruiting people, but it was using another name to do it.

I will say that they use a really hard sale approach and those two that recruited me really used a guilt concept approach to try to rope me into their scheme. All I remember was how uncomfortable I was being in their car for the ride back (also remembering how they had thought it was a better idea to drive me, rather than me meeting them by driving my own car). They took an extra long way back to my work place (as it was literally down the street), and I remember them trying to sell me on the whole approach over and over again.

The next few days, I couldn’t get them to stop calling me. I told them I wasn’t interested, and that seemed to make no difference to them at all. They tried every foot in the door approach they could, and it got to the point where I found myself yelling at the phone, telling them to stop calling me. This was before the age of caller ID being prevalent on phones, so you’d pretty much have to answer the phone for anyone who called, and call blocking was still a decade or so away.

What I can say is that their products were mediocre at best, yet their markup was huge. When they explained the “business model” the first thing I thought was “pyramid scheme” because you had to be higher up on the pyramid in order to actually make any serious money, which meant so few people would actually be making money in this business.

The sad thing is: Amway is not the only company doing this sort of thing. Years later, I was back in school and someone contacted me about a job opportunity (I had been trying to find a job during this time, so obviously my name was found through some job site). I showed up and it was identical to the Amway meeting from before EXCEPT there were a bunch of “group leaders” who were escorting all of the marks. What I noticed was that for each male mark there, there was a hot female “group leader” who was that person’s contact. For the women (and there weren’t a whole lot of them), there was an attractive guy “group leader” assigned. I think I was the only one not assigned this way because the person who targeted me had gotten me through a business connection. But all I remember thinking was “wow, this is a freaking cult”. And its business model was identical to Amway except it felt more like it was spur of the moment, where the designer had attended an Amway meeting and thought, “hey, I can do this, too and do it so I’m on top of the pyramid when it starts”. What I specifically remember about this meeting was a computer printed sign as the markee on the main building and then driving by a week later to see that all of the signs for this “business” were gone and the place and a”for lease” sign was now on the front lawn.

I guess the point is that no matter how much these places try to pretend they’re legit, they’re basically bottom feeding and out to screw you. I remember talking to a lot of people who were at both meetings and they were almost always paycheck to paycheck or “get rich quick” thinkers. I also remember at the second meeting that one of the “group leaders” spotted me talking to other people and she quickly put a stop to it, apparently not wanting any of their marks to actually compare notes.

Now, I can’t say that these places don’t work for some people. But I’d feel a lot better if I read a lot more literature on these business models to hear successes, instead of what I do see. An example is the comments section of both articles I linked in this article on MLive’s site. Every now and then, one guy named David starts talking about how great his experiences were with these organizations. and then you realize he’s the one positive response out of 113 responders, which makes you wonder whether or not he’s not part of the organization’s PR rather than someone honestly responding to these stories.

All I can say is that had I taken the bait back then, my life would be so much worse than it is now because when people are after you only for your money, they don’t care what happens to you when you’re destitute and without options. Just look at the leaders of these businesses and their political choices. If you’re poor and without lots of money, they are certainly not the people to whom you’d turn, which is ironic because for the most part, they got rich off of people with very little.

What is the rationale for charging the poor more than everyone else?

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I was dropping off a friend of mine at a car repair place on the other side of town last night when I decided to pick up some McDonald’s chicken mcnuggets on the way home. I’d never stopped at any place in this neighborhood before, but this was one of those ethnically diverse areas where most of the signs were in Spanish, bordering on an African-American-based population area. This was the kind of area where a lot of economically struggling families live, although not so bad a neighborhood as to constitute a fear for anyone visiting the neighborhood. 

I’m a creature of habit. I tend to buy the same thing constantly, so the meal I always get costs me $6.46 at the McDonald’s I normally frequent. This time, however, the charge came to $6.66. For some reason, a few miles from the other McDonald’s, my cost was twenty cents more than what it normally cost me. I paid it, but it left me thinking, why is the charge more here than in the nicer area where I normally get my food? 

It’s not like the people in this area can afford more. Economically, they are less well off than the people who frequent the McDonald’s in my neighborhood. Yet, because they are figuratively in a completely different universe than the other McDonald’s, the pricing is completely different. 

I remember when I lived in San Francisco, and I worked at the Hilton downtown. The people at the Hilton liked to say they were in the “financial district”. In reality, they were in the Tenderloin, one of the lowest of the economic areas in San Francisco. 

Across the street from the hotel, I used to grab a carton of milk every day. It was one of those habit things where I never thought much about it. However, one day, I was a paying more attention than usual, and I noticed that the Arabic clerk always looked at a sheet of tax prices that was centered under a glass sheet on the main counter. My milk cost 99 cents, but the clerk looked on his list and then told me my price for the milk (with tax) was now $1.35. Right then and there, I thought, wait, nowhere in the country is the local sales tax 36 percent. NOWHERE. So, I inquired about this. The clerk said, “tax.” I informed him that 36 percent is outrageous. 

His response wasn’t “Wow, you’re right” and then charged me the correct amount. Instead, he took the milk out of the bag and proceeded to kick me out of his store. When I protested, I actually saw his hand moving towards a spot under the counter, where I noticed there was a revolver. Taking my losses, I left the store. 

What this taught me is that there’s an outright intent to screw people over whenever you can. In the Tenderloin district, I suspect that store owners figure the people are too stupid to realize they’re being cheated, and they’re dimed and quartered (as opposed to being nickle and dimed) endlessly. 

So, what are your thoughts? Is this capitalism at its norm? Is this corruption? Or do people just generally not care because it’s happening to the poor, and they’re supposed to be victims any way?

Why Don’t Politicians Discuss the Poor?

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There’s an interesting essay on CNN this morning by Roland S. Martin that takes the stance that Republicans do not ever mention the poor even though the most important red states are heavily infected with poverty. While it’s a thought-provoking article, it’s obviously very partisan in its approach, almost as if saying (without actually saying it) that Democrats DO care about the poor while Republicans do not. While it’s easy to throw mud on the GOP over this particular issue, I’m going to take a different tact and introduce the question of: Why don’t politicians discuss the poor? Because, as much as Democrats like to see themselves as the party of the people, when it comes down to discussing issues that actually alleviate poverty, neither side really does a good job.

For those waging class warfare, you might disagree with me, thinking that Democrats have always been on the side of the poor, but honestly think back and try to figure out when was the last time Democrats actually went out of their way to do something to alleviate poverty, aside from talk about it or use it to get re-elected. When I was pursuing my Ph.d in political science, I remember putting forth the argument (to a group of Democrat-professors) that asked the same question but in terms of race. It was during a seminar on party politics, and I asked why the Democratic Party actually felt it deserved the votes of blacks. And the room went silent because it was one of those questions you don’t really ask. I tried to push away the “you must be a racist to ask such a question” responses quickly by indicating that while the Democrats may have more African-Americans making up its ranks, what exactly was the Democratic Party doing to help African-Americans when it came to either ending racial discrimination or anything that had to do with bringing all races into a sense of equality. Responses all seemed to point at Civil Rights legislation and other such issues, but I kept pointing out that much of these efforts were started in the 1960s by politicians who were either very old or dead. Recent attempts to actually “make things better for everyone” weren’t really being made. My argument was that the Democratic Party seemed to be expecting African-American participation and support solely on the basis of not being the Republican Party. Needless to say, this caused all sorts of negativity in the room, and to be honest, to this day I’ve never achieved a sense of anyone really going out of his or her way to address the issue. Instead, I often see race being treated as an issue with already decided expectations that make it so that no one actually discusses the issues but instead do a lot of scholarship that consists of doing what has been done before without much further effort.

I bring this up because the issue, for me, is the same when it comes to poverty. There are more poor people in this country now than there has been in a very long time (since the Depression itself), yet politicians don’t seem to really be focusing on it. Instead, the focus has been the deficit, getting people back to work (the middle and upper classes), and a couple of areas of foreign policy. The War on Poverty became a “war” in name only, as we haven’t really done anything to alleviate poverty, unless you look at current trends as a War on People in Poverty, which we seem to be conducting quite admirably as we cut money to shelters, food banks, food stamps, schools and practically every other area of society that has anything to do with the poor.

But no one really seems to care. On the local news website (MLive.com), I read daily scribes by the common citizens that attack anyone who is poor as lazy, a criminal and a drain on society. Whenever someone puts forth ideas to alleviate poverty, that person is treated as part of the problem, and the masses don’t even want to discuss the issue further. And this isn’t even some right-wing media outlet. It’s the outlet used by the majority of people who read the local newspapers on a daily basis.

I don’t know about you, but I would love to see every politician start talking about what he or she is going to do to get people out of poverty. That would be so refreshing. But that never happens, and the reason for that is because it’s so much easier to not do anything about it and make up other issues that aren’t important, but are easier to hold conferences about. One of the big issues going into the presidential election is most definitely going to be the deficit, but at the same time I would not be surprised to see other ridiculous issues become part of the common conversation, like same sex marriages, abortion, religion in schools and taxation. It would not surprise me if one of these issues becomes the reason why one politician wins rather than any other.

Another factor to look at is political power itself. Since the poor first became poor, they have never really had an advocate working on their behalf. Congress is constantaly barraged with lobbyists over every issue under the sun, except for those that have anything to do with poverty. And that’s because there’s no money in it, which is somewhat ironic because that’s the problem in the first place. Lobbyists exist mainly to push political interests that then serve economic interests as well. When the economic interest is in getting people out of poverty, there’s no basis for creating a political process behind it. It’s a game theoretic where there’s no payoff for anyone involved, so no one gets involved, and the poor are left to their own lives of poverty without anyone really caring about the struggles they go through.

Instead, we end up with people thinking they know what poverty is because they brushed with it somewhere in the past but never really experienced it. I used to see this all of the time in the academic environment whenever poverty was discussed, and some college student who once struggled to make a decision between buying a new CD and purchasing food because of a limited budget actually thinks he went through a bout of poverty, so he thinks he completely understands it. And that person, when living somewhat of a decent lifestyle, is confronted with the idea of poverty, immediatedly thinks of poor people as the lazy people who couldn’t sacrifice that CD to put food on the table that one day when in reality the idea of buying a CD is a luxury most of them wouldn’t even consider in the first place. So when a poor person actually owns a cell phone (because it’s the only way they can communicate, making it an immediate Maslowian need), that former student scoffs at them, saying stuff like: “Well, if they can afford cell phones, obviously they don’t need assistance.” Again, it’s an inability to completely understand the bigger picture brought about by the fact that no one is ever going to take the effort to want to learn in the first place.

So what is the solution? Stop ignoring it and do something about it. Write your leaders and say something about it. But we won’t because we’re as lazy as we claim the poor must be, and we rarely do anything about it. If a politician doesn’t have constituents yelling at them about poverty, it’s not an issue on their dashboard. Unless someone starts telling them about it, they’re never going to even be aware of it because they don’t travel in circles that requires them to have to see the homeless as they live on a daily basis other than the random one who happens to be begging on the side of the entrance to the interstate, and like most people, the politician probably ignores them, thinking that if they don’t look at them, they don’t have to worry about them; or worse, they give them a dollar to get some alcohol, and somehow feel like they’ve done their all to address the poor.

Asking politicians to do the right thing is the recipe for failure every time. Asking YOU to make them do the right thing IS the answer. But I suspect we won’t because it’s too much work, and we all know those poor people are really lazy people who just don’t want to work like the rest of us. Right?