A new report examining the financial side of the underground commercial sex industry was released Wednesday, revealing that the economic aspects of prostitution present a much larger and more complex problem than previously thought.
In the first-ever study of its kind, funded by the U.S. Department of Justice, researchers at the Urban Institute documented the business side of pimping and sex trafficking for five years. They focused on street and online sex work, escort services, massage parlors and residential brothels, looking at how prostitutes were recruited, the amount spent on advertising services, and rates for services, travel and transportation.
After an analysis of the underground sex industry in eight major U.S. cities — Atlanta, Dallas, Denver, Kansas City, Miami, Seattle, San Diego and Washington, D.C. — researchers estimated the value of the sex industry in these cities ranged from $39.9 to $290 million in 2007, which was reportedly down from 2003. Combined, the commercial sex trade was valued around $974.3 million.
Even with the slight decline in hourly sex rates, the researchers found that the economy of the underground sex world was much larger and more complex than researchers and law enforcement had anticipated.
“I think we’re kinda like the Titanic,” said one San Diego law enforcement official. “We see the iceberg, but we really have no idea how big it is under the surface because we’re just seeing the top of it. We’re getting our feet wet with it, but it’s just spawning off into so many things.”
Pimps took home between $5,000 to more than $32,800 a week, and the average rate for sex acts was around $150 per hour. Researchers said this was down from $250, the going hourly rate for sex acts before the recession. They also found that white women and younger women typically have higher hourly rates than other age and race groups.
Meredith Dank of the Urban Institute was the report’s lead author. She said the researchers opted to conduct the study by interviewing law enforcement officers and lawyers, as well as pimps, sex traffickers, prostitutes and child pornographers — many of whom were incarcerated.
“We often think about the commercial sex economy as a hustle, where there’s no real thought or planning that’s involved,” Dank said of the 340-page report. “But we found . . . the opposite – that some pimps and traffickers actually had a business model they followed.”
Dank said the team was given a slew of insider information from the 250 or so interview subjects. They learned that pimps find the term “pimp” to be derogatory and that most of the transactions related to the sex industry are made over the Internet on websites such as Cragislist.com and Backpage.com.
“There is still street activity, but on the Internet they do not have to operate in the shadows,” Dank said. “The Internet is also more lucrative, there is a higher price point.”
The only part of the underground sex industry that researchers discovered was not as profitable as they had anticipated was child pornography. According to the study, child pornography is a large, mostly noncommercial exchange in the United States, so participants usually trade videos and images for free through file-sharing and online communities.
Researchers were also surprised to learn that pimps said they psychologically manipulated women more than physically beat them to get the women to work for them. Some played head games, others feigned romantic interest in a woman and still others promised material comforts.
To increase profits, some pimps said they would instigate competition between employees by maintaining romantic and sexual relationships with several of the women, then show affection for the most profitable worker.
“I believe one of the strong points of this business is manipulation. Say an individual is left wanting, needing. She has aspirations for a bigger future, that’s key. A lot has to do with promising, what you have at that point,” one pimp told the researchers.