In-Depth Report Details Economics of Sex Trade
WASHINGTON — A street prostitute in Dallas may make as little as $5 per sex act. But pimps can take in $33,000 a week in Atlanta, where the sex business brings in an estimated $290 million per year. It is not nearly as lucrative in Denver, where prostitution and other elements of an underground trade are worth about $40 million.
Those are some of the findings of a landmark government-sponsored report on the size and structure of the sex economy, including massage parlors, brothels and expensive escort services. The study also found that four in five pimps elect not to deal drugs and that little money trades hands in the child pornography business.
The report does not estimate the size of the illicit sex economy nationwide, instead analyzing the trade as of 2007 in eight cities: Miami, Dallas, Washington, Denver, San Diego, Seattle, Atlanta and Kansas City, Mo.
The report, commissioned by the Justice Department, is intended to address what researchers describe as wide gaps in the understanding of how the underground sex trade works, especially in the Internet age.
“It is the first of its kind to look in-depth and create a road map of the commercial sex economy — from point of entry to reasons to stay within it, and what the business and operations structure looks like,” said Meredith Dank of the Urban Institute, the report’s lead author. “We’d hear numbers from law enforcement and advocacy groups. But there was never any empirical rigor that was used to estimate its size.”
The study focused on the business side, rather than on consumers, and researchers conducted more than 250 interviews with law enforcement officers, lawyers, pimps, sex traffickers, prostitutes and child pornographers, many of whom were in jail. Those interviews provide a wealth of data on pricing, market structures and the sex workers’ motivations.
Researchers not involved in the study say that it has produced the best estimates yet of the sex trade’s financial impact, but that the numbers underscore the need for more and better data. “They were scraping to find data that was reliable in just these communities,” said Amy Farrell of Northeastern University, who applauded the study’s findings. “And they found a lot of variation across communities.”
Underground Markets
How the annual size of illicit markets for sex in seven major cities in 2007 compared with those for drugs and guns, according to estimates in a study commissioned by the Justice Department.
SEX
DRUGS
GUNS
$290 million
$117
$146
Atlanta
$235
$96
$106
Miami
$112
$87
$60
Seattle
$103
$103
$160
D.C.
$99
$191
$171
Dallas
$97
$96
$48
San Diego
$40
$64
$47
Denver
The study did find pricing was consistent across the country, with $150 an hour the common going rate for prostitution. The age, race and drug use of a sex worker affected the price. Pimps told the interviewers that they could charge more for white women and younger women. But, one said, “Honestly, you just have to stay away from minors.”
“I’ve never known a pimp that got in trouble for messing with adults,” the pimp said. “Law enforcement focuses on minors.”
The sex business can be hugely lucrative, the study found. But sex workers reported burning through money as soon as they made it, and their expenses were high, too. One pimp in San Diego reported paying a hotel $24,000. Another spent $3,000 to $4,000 a week on shopping sprees for employees.
“Prostitution and pimping — in many cases that’s not particularly profitable,” Ms. Farrell said. “Some parts are more marketable than others.”
Unlike other illicit markets — in counterfeit consumer goods or drugs, for example — the sex economy is mostly made up of small-scale operations, the study found. On average, pimps keep five employees at any given time, and turnover is high. “Girls would always come and go,” said one of the people interviewed. “Work for a weekend and then head back to the boyfriend after saying they’ve made enough.”
Generally, pimps said they preferred to work alone. “Pimps are like eagles,” one respondent said. “They soar by themselves.” But they do rely on informal social networks, trading tips on how to avoid law enforcement and for the movement of employees from city to city in established “circuits,” like between Everett, Seattle and Tacoma in Washington State.
As other studies have shown, the Internet has had a profound effect on the sex economy. Half of respondents advertised online. One in four recruited employees through sites like Craigslist and Backpage. Most sex transactions were once negotiated on the streets, the study found, but most are now arranged online, where rates are significantly higher.
The recession has caused some in the sex industry to offer deals or drop prices. Atlanta law enforcement officials reported some sex workers even offered Veterans Day specials.
The study also shed light on why people get into sex work. Pimps and sex workers often said they were encouraged by their families to do so, and many cited poverty as a major factor in their decisions. About 30 percent of those interviewed said a family member was also involved in sex work.
“When I was little, I was on welfare, I lived in the projects,” one pimp said. “Dope fiends, pimps and prostitutes. Gang bangers, helicopter over your roof. That’s no way to live. Seeing glitz and glamour, I always wanted that. Coming up like that, having square jobs was never appealing.”
The researchers also analyzed the specialized markets for Asian massage parlors and Latino brothels, which operated in all eight cities studied. The massage parlor business — often with a legal front hiding illegal trade — is growing. The number of parlors jumped to 4,790 in 2013 from 4,197 in 2011, the study found.
Among the study’s most interesting findings is that the market for child pornography in the United States is small because it is generally traded for free. And most of the people interviewed about their use of child pornography described it as a victimless crime. “It’s like when you’re buying drugs you’re supporting crime or supporting terrorism,” one individual said. “They aren’t getting any money from me to do any bad things or other things.”
The study should help law enforcement officials understand the sex trade and opportunities to help its most vulnerable victims get out, experts said. It also shows how much more research the topic could use.
“The more empirical evidence we have, the better understanding we’ll get,” said Sheldon Zhang, a sociologist at San Diego State University. “It is the same as in the medical model. If you think that cancer is a problem, a serious problem, you need to invest money to understand it.”
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