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The Economy's Impact on Prostitution

Call girl

Slate posted an interesting article exploring the economics of the informal economy of high-end prostitution.

I’ve often wondered exactly how prostitution is impacted by economic downturn. Logically, one would think that consumers would cut back on all forms of disposable income. But prostitution (especially high-end prostitution) fills an emotional need for many consumers, most of whom work in the corporate world, and this need is heightened during tense times of uncertainty.

According to the Slate article, prostitutes actually experience an increase in activity for about 6-8 months after the beginning of an economic downturn. Then the money runs out, and prostitutes either find ways of being more affordable to their clients (they sometimes lower prices or allow delayed payment for regular customers), or they ride out the slump with the rest of Wall Street.

Interestingly, some diversify their “portfolio” of clients (bankers, lawyers, tech guys, etc) so they aren’t so beholden to the cycles of a single industry. Others have started revolving-credit associations, involving a pool of cash that participants pay into, and from which members can withdraw during tough times. The article mentions one woman who started insuring call girls against risk, charging a premium of 5% of monthly income, and paying out up to $1,000/month for up to five months out of a year.

Pimps, strip club owners, and the like have been offering such services for quite some time, but with this assistance comes obligation, leaving many women feeling trapped. Developing informal networks of their own helps women maintain their independence.

Ultimately, the women often just have to wait it out, along with their clients. As one prostitute notes, these are Wall St guys—they will always find a way to make money, and will always come back as long as a woman makes them happy.


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