Claw-Machine Mania

Anyone who visits the capital of the small contested island nation of Taiwan will notice a few things. First might be the humidity, the crazy traffic, or perhaps the distinctive smell of stinky tofu, a local delicacy. After more time, however, one might begin to believe that the Taiwanese really love claw machines. This is because almost every busy street will have at least one, if not more, shops containing many claw machines. These shops are akin to arcades, except they contain only claw machines filled with various prizes. In fact, as of 2018 the number of ‘arcades’ containing multiple claw machines rivals the number of convenience stores in Taiwan, of which there are thousands (for a great map showing just how common they are, see this link).

What is most startling is that this is a very new phenomenon, new enough that I was able to see an enormous difference in the appearance of the city after only 3 years of living here. After a couple of years studying Chinese in Taipei I returned home to the USA for several months. It was only when I returned to Taiwan to be with my wife that I noticed them. Almost every street had at least one of these shops where there had been none before. And this number has increased dramatically in the last two years, raging like a strange neon wildfire through the streets of every city and town, chronicling greed in a declining economy, the enormous divide between rich and poor, and souring opportunities for young people.

Do you remember that feeling, long long ago, when your favorite coffee shop was usurped by that chain cafe inexplicably represented by a mermaid? When your favorite hippie local crunchy bookstore, or even favorite generic bookstore franchise, was obliterated by a company sharing a name with the Amazon rainforest? I’m just old enough to remember, and the feeling is not a good one. I had the privilege, however, of feeling like this again when I tried to return to an old, fairly popular restaurant my wife and I really liked.

Instead, I saw this.

A pretty typical claw machine shop

Jenny Wu described the feeling perfectly in her article on medium. It felt like the death of dreams and the loss of authenticity and culture that would be very hard to get back. Taiwan is already deeply enmeshed in the globalized consumer culture that leads to the destruction of local character and the environment and ultimately leads to cultural homogeneity. For every local store, restaurant, and cafe that disappears there is a tiny loss of culture and thus a small surrender to the march of globalization. Smaller businesses often operate out of rented buildings and at fairly low profit margins, leaving them extremely vulnerable to the rapidly rising cost of rent.

There is a threshold where a claw machine shop becomes less hassle and more profitable than most other small businesses. Because of how inflated the real estate market is in Taiwan (on an island, space is often a limited resource) this threshold can be low indeed. When employers are forced to pay employees a livable, fair wage their profits will be negatively impacted. Taiwan is no exception and a struggling economy has made this all the more apparent, with wages remaining stagnant for decades contrasted with a massively increased cost of living. The government has made very little action to protect the rights of workers and thus employers get away with much misconduct. Wage theft, tax evasion, and other forms of corporate greed are not merely common, but expected. In a hypercapitalist society greed is often considered natural and even virtuous. People are expected to act in pure self-interest, and therefore it should come as no surprise that profit is considered far more important than people. Putting people out of work, according to capitalism, is a neutral act. Paying employees the absolute lowest wage possible is simply a result of market forces, even if the wage paid is not even close to be being enough to survive. Employers are not considered to be responsible to their employees and landlords are not held responsible for their tenants. When a business owner and/or landlord fires their employees, closes their business, and opens up a claw machine shop it is just another example of working purely in their own self-interest. This behavior is just how business works in a system that over-values capital and does not care about workers.

The owners of a claw machine shop, however, are often not the people who own the machines. Instead, other people rent space in the shop in which they can place their own machine. This allows for a further level of exploitation when the landlords will rent space back to their old employees, effectively creating ‘contractors’ who pay for the space they use to make a living. As Ms. Wu mentions in her article, some of the people who own machines in these ‘arcades’ are the same people who worked at the businesses replaced due to a combination of poorer customers, rising rents, and rising costs of living. When landlords raise rent, the businesses within often go into a death spiral and are forced to leave. Their employees, however, still need to make a living and these kinds of ‘arcades’ offer a low-investment alternative to moving where jobs are available. The landlords simply collect rent from the owners of the machines. They have no responsibility for either the machines or the people who run them, which means big savings for them. No salaries to pay, no insurance payments, and fewer bills means they can pocket a larger percent of the profits and put all responsibility on the backs of the people who rent space for their machines. This is somewhat similar to the proliferation of illegal (but usually unreported) independent contractor positions that were previously held by employees in the US. Both of these strategies allow an employer/business owner/landlord to avoid responsibility to the people that make money for them.

Worse still is that these machines are not even fair for the user. Christina Ustik, writing for The Next Web, notes her bizarre and amusing experience with the claw machines of Taiwan. She noted that when she played the machine for the first time she successfully captured a small doodad with the claw. Her attempt to retrieve the item was thwarted, however, when the claw then opened just enough to release the item. The claw-machines are obviously set to game the people playing them by only allowing people to win after a certain amount of money has been spent, a fact that seems widely known but poorly understood. People are gambling that others have put in money before them and given up, meaning that they could be the lucky number one thousand that wins the prize. Like many other forms of gambling, one could make the argument that owning and operating one of these machines is unethical because they not only are rigged but also actively encourage people to wish misfortune on others. Worse than this, however, are the predatory claw machine operators who take advantages of product shortages by putting necessary products in the machines and forcing people to play in order to get them. Some claw machines were famously pictured selling toilet paper during a time of shortage, leading some to question the moral integrity of the people that were using this shortage to their benefit. Either way, these machines encourage predatory and addictive behavior.

If these machines are unfair, why would people use them? Simply walking down the street in Taipei makes it clear that these machines are very popular with the young and old alike, with some children spending all their lunch money at the machines. Further testifying to their addictive nature is one unnamed woman who spent nearly 200 dollars in these machines, eating up half of her families monthly food budget. Their popularity is likely due to a combination of wage stagnation and a massively oppressive work culture that leaves many young adults and salarypeople without many venues for affordable social discourse or relaxation. Claw machines offer a small pulse of adrenaline in a boss and parent-free environment, which seems to become extremely addictive in a society where parents, teachers and bosses are given far-reaching authority over the young, who often feel they have no choice but to obey. Younger Taiwanese usually live with their parents until marriage (late 20s early 30s on average), and often well beyond that. There is little time away from teachers, parents, or bosses, and so most of their days will be spent with an authority breathing down their neck. The pressure can be immense. In order to escape these influences young people need a place to escape to, but because young people are often massively underpaid many leisure activities are entirely out of their reach. The amount of money to use a claw machine one time is very small, however, though the probability of winning is inversely proportional to the cost of the item in the machine. Young couples or groups of young people can often be seen talking and playing in these shops because it is a cheap way to kill time, a lot cheaper than a trip to a coffee shop or the movies. If young people were paid fairly and treated like real people they might not be so eager to use the claw machines, thus bringing the lions share of the blame back onto the backs of the business owners who pay low wages with no benefits in the first place. Claw machines would not make nearly as much money if young people were payed enough to rent their own apartments where they could actually have a private life of their own, or at least pursue other leisure activities. The machines represent the complete lack of care the rich have for those who make less, which unfortunately means the rich continue to profit off of the poverty of their subjects.

The claw machine craze is a symptom of the increasing divide between the rich and the poor. Traditional stores, local restaurants, and boutique cafes have a hard time competing when the cost of business becomes higher, since they already suffer from competition with both foreign and domestic chains and the rapidly rising cost of rent. Landlords and business owners see an opportunity to make reliable, passive income and rent space to people who set up machines in the space previously occupied by less profitable businesses. People who have low salaries and low opportunities for upward mobility are seduced by the addictive nature and the low upfront cost of the machines and frequent them, which is an incentive for more claw machines to appear. The rising cost of rent combined with the refusal of companies to pay their employees a living wage leads to a situation in which the rich, the ones who actually own the land, the ones who buy up real estate and drive the cost sky high, the ones who ensure the government favors money over its citizens, siphon money from the worker for ten Taiwan dollars a pop.