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Study exposes scope and business strategies of America’s underground sex trade

March 12, 2014 at 6:47 PM EDT
A landmark study funded by the Justice Department estimates that the underground sex industry in each of seven U.S. cities generates between $40 million to nearly $300 million a year. Hari Sreenivasan talks to the lead author of the report, Meredith Dank of the Urban Institute.
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JUDY WOODRUFF: Now a landmark study funded by the U.S. Justice Department to learn more about how the underground commercial sex market in this country operates and to better understand its scope.

Hari is back with that.

HARI SREENIVASAN: It may be the world’s oldest profession, but little is known about the true economics of the illicit sex industry. It has never really been quantified, until now.

A study done by The Urban Institute, and released today, estimates that the underground sex market in each of seven U.S. cities generates between $40 million to almost $300 million a year. It also found that sex traffickers often operate with formal business models, some even doing market research.

Meredith Dank is the lead author of the report and a senior research associate at The Urban Institute.

So, what was the point of the report? Why did we need to do it in the first place?

MEREDITH DANK, The Urban Institute: Because we didn’t really understand the scope of the underground commercial sex economy.

Anecdotally, we heard a lot of stories, but this essentially gives a blueprint as far as entries and pathways into it, how they recruit others into the underground commercial sex economy and how they ultimately operate their business.

HARI SREENIVASAN: So, you studied these different cities. Were there particular patterns that repeated, any notable finds?

MEREDITH DANK: So, as notable finds, I think two cities that really stood out as far as the size of their underground commercial sex economy was Atlanta.

They — in the year 2007, we estimated they brought in about $290 million. And Seattle between the years 2003 and 2007 had grown — you know, it’s twice the amount of money. So it went from $53 million to $112 million.

HARI SREENIVASAN: And when you say the sex economy, it’s not just about the person that’s making the one transaction for sex and for money. It’s now — you’re talking about drivers, hotel rooms, and lots of support services.

MEREDITH DANK: Exactly.

So, there is — it’s almost like a small business structure. You have somebody at the head, which is typically your pimp or facilitator. In some cases, you have what they call — refer to as a bottom. So, that’s the right-hand oftentimes girl that helps the day-the-day management. Then you will have drivers.

And, sometimes, you have legal businesses that are assisting with this, like hotels, rental car services, cell phone businesses.

HARI SREENIVASAN: And so we just had a conversation marking the 25th anniversary of the Web. How has the Internet changed sex trafficking in the U.S.?

MEREDITH DANK: So, the Internet has essentially bifurcated the market.

So, before, it was primarily a street-based market. And now you have got, with the advent of the Internet, other ways where they can market and recruit other employees, in addition to just being able to create these partnerships with other traffickers and pimps.

HARI SREENIVASAN: So, is street level sex trafficking down, while online is up, or is there a correlation?

MEREDITH DANK: We can’t conclusively say.

At least of the pimps that we interviewed, they said about 50 percent were using Internet to post classified ads and things of that sort, but about 40 percent were still using the street. So what we were often told is, if the money isn’t coming in through the Internet and they are not getting calls, they will go to the street, because it is fast money and they know that there will be demand out there.

HARI SREENIVASAN: So, in all of these interviews, how did most people get into the sex trafficking — trafficking business?

MEREDITH DANK: So, at least from the pimps and the facilitator sides, some common entryways was, one, generational pimping. Their father was a pimp. Their mom was a sex worker. So it was almost normalized within the family context.

This is something that was a family business of sorts. Other ways was a neighborhood context. So, they would see this every day. As one pimp said: I came from a disadvantaged black neighborhood. So, for us, if we didn’t succeed at school, it was either the streets or jail.

And within the streets, you chose drugs, sex, or in some cases theft, so it was normalized.

HARI SREENIVASAN: One of the areas that you also explored was child pornography. Tell us a little bit about that.

MEREDITH DANK: So, we essentially, when we first received the — proposed to the NIJ to study this, we considered child pornography to be part of the underground commercial sex economy.

But what we found early on is that the commercial aspect is really not here in the United States, that, primarily, these images are traded for free. And there’s the urgency in the proliferation of child pornography, because in order to get into more of these deeper membership communities, you have to produce your own child pornography.

HARI SREENIVASAN: So, whether it’s a Department of Justice or a local police that reads this report, what do they get out of it?

MEREDITH DANK: So, I think that now that we have this blueprint of entry pathways the recruitment is all about, I think that, at least from a prevention side, we can figure out not only how to prevent the victims and other individuals from being recruited by pimps and facilitators, but also figuring out prevention strategies to prevent actual pimps or future pimps from entering it.

As far as intervention strategies, one thing that we found is psychological coercion is used quite often to not only recruit and retain their — quote — “employees,” so a lot more services need to be able to be provided for the victims and those individuals who would like to leave that life for — for mental health purposes.

But, also, one — one element that we saw was this organized criminal element, particularly in Latino brothels and erotic Asian massage parlors. And law enforcement said that they just don’t have enough funding to be able to really infiltrate that, so more resources would be really helpful.

HARI SREENIVASAN: All right, Meredith Dank, the lead author of the report and a senior researcher at the Urban Institute, thanks so much.

MEREDITH DANK: Thank you.