Oh, at 18th and Hamilton, you say?
“One thing i don’t understand is sex is legal and selling things is legal but selling sex is illegal.”
– George Carlin
I remember he said “fucking” instead of “sex.” Definitely seems funnier that way.
The headline talks about arresting sex workers, but the article talks about targeting customers. Which is it?
Economics isn’t about money. It’s about understanding how people make decisions about what they do.
That’s a promising start, and suggests that people don’t make decisions based on money alone. Unfortunately, that’s explicitly not the assumption that Hill makes:
Second, assume that sex work is just that, work.[iv] Sex workers enter the market in order to earn certain income level. Unless sex work is different from every other source of labor (which I seriously doubt), sex workers provide their services because the income they earn from such work exceeds their opportunity cost. In other words, to them selling sex is a better economic option than their next best alternative, which might be waiting tables in a restaurant, working in a telephone call center, or subsisting on welfare.
This is a particularly stupid assumption, and obviously false since there are lots of individuals who could make more as prostitutes than they currently make, but for some reason haven’t entered the sex trade. But it’s an essential assumption, as it explains why he does not think there will be any reduction in supply:
Note that workers do not start supplying sex services to the market until the price they can get for their services exceeds P0. This price represents their opportunity cost – it’s what they earn in their next best option (e.g. waiting tables).
The psychological, moral, and cultural challenges that a career in the sex trade presents means that P0 is not simply their opportunity cost in terms of their next-best earning option, but something much higher than that. And since reducing demand may drive down prices below the P0 of some participants (but not down to the minimum wage or welfare level that Hill considers the P0 of at least some sex workers), the supply may also shrink in response to the shrinking demand (something that would not happen under Hill’s sample supply and demand curves).
Well headlines around here are held to the highest standards of internet integrity, but you’re right about the article, so it’s an absolute conundrum.
The part that worries me is this flies in the face of freshman Econ 101. Reducing demand cannot possibly increase supply, because if it did, there would be excess supply. If you’re standing on the corner and there is no demand, you’re not a sex worker - you’re an unemployed person.
The argument about workers working harder when they’re paid less is false in every industry, not just this one. Workers who are paid less are likely to seek other work, not likely to ask the boss for more of that sweet minimum wage. The fact is, most hourly workers will work whatever hours are available, because that’s usually less than they want. That being the case, lower demand will take fewer hours to fulfill, not more.
In fact, that’s most of the Great Recession. When people stop spending, stores lay off staff, unemployment rises, and people spend still less. More jobs and more working hours don’t appear just because people wish to earn more.
EDIT: I’ve never seen a supply curve that turns back on itself like that, but then again I only passed 101.
I’m fascinated by these sculptures that were used to illustrate this article.
I’m also not sure why a drop in demand would create a new supply curve.
However, we have to consider how the sex workers themselves will respond to declining demand for their services and lower prices. Now they are not earning their desired level of income, but since the income from sex work still exceeds their opportunity cost, they do the logical thing and offer more hours to the market. How many additional hours will they be prepared to work? Enough to maintain their standard of living after factoring in the fall in price caused by the demand side reduction strategies of law enforcement. As a result, the supply curve pivots outwards to S2.
Presumably the old supply curve also reflected the workers’ desired level of income, so I’m not sure why the curve would change. If P2 is going to cause greater hours to be worked, this simply means the original supply curve, S1, is wrong, and that at P1 we are already on the back slope of the supply curve… which would imply that if we actually want to cut supply then we should cut demand even more.
This is a particularly stupid assumption, and obviously false since
there are lots of individuals who could make more as prostitutes than
they currently make, but for some reason haven’t entered the sex trade.
But it’s an essential assumption, as it explains why he does not think
there will be any reduction in supply:
No, it’s actually obviously true. You are acting as if he had said “to everyone,” when in fact what he said was “to them.” He is talking about the category of people for whom the statement is true.
Maybe the initial drop in demand changes the actors who participate in the market. Less demand leads to lower prices, and makes the services affordable to more clients.
Were either of these bloggers ex- or current sex workers? If not, could we get a couple of economists who have been sex workers to chime in?
Interesting topic, but too much of the oversimplified ‘them’ as a subject of conjecture (by mostly dudes it seems, who might not ever have seriously contemplated whether sex work was their best option).
It’s not obviously true, as there are individuals who would leave the sex trade for jobs that pay less. And while it may be true that, now that they’re already in the trade, P0 is relatively low, at the time they entered the industry their P0 was likely higher than it currently is. The P0 of those not currently in the industry is important when you’re talking about increasing supply.
Presumably that’s already been addressed in his discussion of how it’s a tiered industry with established vetting procedures for both buyers and sellers.
Things are never as simple as they are in Econ 101. If they were, libertarians wouldn’t be the laughing stock that they are.
The “supply” of sexual labour, like any other labour, is relative. If one could earn $100,000 a week for one hour of labour and could choose the number of hours to work, most would not work a second hour. It’s only when the price per hour drops below the weekly desire for money that our worker will opt to sell more hours - otherwise their time is worth more to them than the money is.
Stores aren’t selling access to their employees, they’re selling goods. Employees are just a sunk cost like building rent.
Wow! There were a lot of things wrong with that. Professor Hill claims that the “Nordic model” of decriminalizing the sale of sex but criminalizing the purchase of sex is a strategy “rooted in a view that sex workers are victims who enter their trade out of economic desperation and/or because “pimps” coerce them.” That is not the basis of Sweden’s policy. Sweden explains their law thus:
In Sweden prostitution is regarded as an aspect of male violence against women and children. It is officially acknowledged as a form of exploitation of women and children and constitutes a significant social problem… gender equality will remain unattainable so long as men buy, sell and exploit women and children by prostituting them.
Professor Hill also compares prostitution to Prohibition and the drug war. But whether your criminalize the sale or the purchase of sex, it is not the same. Prohibition and the drug war criminalize both sale and purchase. Changing the variables changes the result.
Professor Hill says he doubts criminalizing the purchase of sex will have an effect for economic reasons, but completely glosses over the fact that the Sweden has reduced prostitution by that method. I personally think he is right that arresting and shaming johns will not reduce prostitution, but not for any questionable economic reason. The Swedes accompanied their law with corresponding social reinforcement. I doubt Seattle is going to be thoroughly retraining its police department to think of prostitution as a form of male violence against women. I also doubt Seattle will be “providing ample and comprehensive social service funds aimed at helping any prostitute who wants to get out, and additional funds to educate the public.”
Another major problem with Professor Hill’s post is the Seattle Times article he bases his post on. http://seattletimes.com/html/localnews/2024790488_prostitutionfollowxml.html
The headline of the post is “County’s ‘Buyer Beware’ program aims to reduce demand for prostitution”, and the thrust of the article follows that theme. But every quote from the Seattle police and every reference to actual police policy or tactics refers to police pretending to be under-aged children to catch pedophiles. What does preventing sexual assault against minors have do with reducing the supply or demand for prostitution?
I don’t think it’s at all clear that that’s the case.
From the article:
“And since the stats only measure reported cases, it isn’t outside the realms of possibility that the number actually is decreasing even while the police are detecting more. But the Swedish haven’t been arguing that it’s possible the numbers have decreased. Their claim is an assertion of fact. It would be a difficult claim to substantiate in the best of circumstances, given the clandestine nature of the sex industry and the additional layers of secrecy that criminalisation always brings. But when the only metric available says the exact opposite of what is claimed, the claim becomes more than “unsubstantiated”. It becomes false – and probably wilfully dishonest.”
If you do a quick google search, you can find a lot more in that vein. (Indeed, it was doing a quick google search for the actual stats and sampling methods, which I always try to do when I hear claims about social engineering, that popped up this article.) It sounds like they’ve simply loudly and publicly declared the policy to be a success. It’s certainly a step up from criminalizing the prostitutes. (though if said prostitutes are foreign, Sweden still arrests and deports them for engaging in prostitution, which gives lie to some of their rhetoric about protecting victims)
That’s a pretty big “if.” Are there a great many sex workers who earn so much they do not want more money? I recently had a couple of very very good Mondays, but that didn’t make me take Tuesday off. Of course, good is relative - I didn’t earn $100,000 an hour like those hypothetical sex workers.
I do not think we live in an environment where very many people are ditching work because they have too much money - but like I said, I’m just an amateur economist.
We very much live in a world where not everyone works two or three jobs, but instead to work only about 40 hours per week, with multiple weeks off for vacation, because they find their economic needs are met quite well under that situation.
There are certainly many people who earn enough money, and would not opt to work more hours unless they suddenly did not.
You don’t see people ditching work because they do not actually have the option to work fewer hours.
I go on the basic assumption that any plan that begins with “We want to stop people from doing this thing they’ve been doing since before recorded history” is probably not going to work as intended.