Posts Tagged ‘profit’

In tightly organized sex trafficking groups there is more specialization and division of responsibilities than in loosely organized ones. For example local law enforcement Columbus and Toledo report that in these organized groups, “…people involved know only what they need to know to do their jobs. They do not know the traffickers names, or at least their real names, and whole operations can be run from the homes of traffickers without them ever coming into contact with the victims themselves.” (Wilson & Dalton 2007, p. 24)

In the US and throughout the world, many or most sex trafficking groups are ethnically-based (Shelly 2010b, 84). East Asian trafficking groups operating in the United States are particularly organized, in contract to domestic trafficking which consists mostly of loosely organized US-born pimps (Finnekauer 2007, Shelly 2010a). Operations are often vertically integrated, with organizations controlling operations from recruitment through to retail. For example, Chinese sex trafficking groups operating in the US “control the smuggling at all stages from recruitment…to an assignment in a brothel in order to secure long-term profits,” which are then reinvested back into legitimate businesses in East Asia. (Shelly 2010a, 124). This degree of organization makes their operations particularly effective and difficult to combat. For this reason we will focus on the operations of East Asian sex trafficking retailers operating in the United States.

East Asian groups in the United States typically operate out of different forms brothels. These typically take the form of East Asian “massage parlors,” located in many major US metropolitan areas including Washington, DC, where there are many of these businesses area (Washington Post). This contrasts with the model of domestic retailers in the US who typically utilize the ‘flying prostitute’ model.

Polaris Project (2011) reports that East Asian massage parlors are typically managed by older women (many of which are presumable former CSE victims) and owned by men. This reflects traditional East Asian social structure where women are subordinate to men. Other roles within East Asian trafficking operations include enforcers and transporters. (Polaris Project 2011).

East Asian sex retail operations outside of massage parlors are often conducted in “room salons/hostess clubs, residential brothels, karaoke bars, [and] escort services,” (Polaris Project 2011). Polaris Project Executive Director Bradley Myles believes that level of knowledge and effort required by retailers to hide behind the legal veil of legitimate business in these settings– regarding “laws, licensing, zoning, interacting with landlords and with legitimate reporting systems” – means that it would be very difficult for retailers to achieve or maintain this business model were they not part of a larger criminal enterprise (Washington Post).

Sources

I haven’t made it very far through Kara’s “Sex Trafficking: Inside the Business of Modern Slavery” yet, but he begins by providing a ton of valuable information and sources that I can use as a basis for starting my research on the business of human trafficking.

In class, we’ve been talking a lot about the role of demand in the human trafficking equation. Understanding and addressing demand is key if human trafficking is to be held in check. As has been demonstrated by the “war on drugs”, lopsided prevention strategies that focus on supply alone don’t actually solve the problem.  While recognizing this fact, I am personally interested in the supply side of the equation in human trafficking, especially from a management and finance perspective.

In my last post I discussed how human trafficking will be extremely difficult to address or prevent without targeting and eliminating the profitable functions. For example, Kara claims (without citation) that “the global weighted average net profit margin” of 70% makes holding sexual slaves “one of the most profitable enterprises in the world.” (p. 21).  He also notes that the costs of entering the human trafficking trade are relatively low compared to the cost of starting a business in other industries, making it an attractive alternative. On page 24 Kara claims that a sex slave can be bought in Asia for between $200 and $1,000 and in Western Europe for between $2,000 and $10,000. I thought it would be helpful to conduct a mental exercise with these numbers. So if a brothel owner buys a slave for $400 in Thailand, forces her to service 10 clients a day for $10 each, each day, every day, the brothel owner will have made his money back in four days. You with me so far?

Say this goes on for 18 months. The brothel owner’s revenue from this single victim now adds up to $54,000. Now he sells the victim to someone in Western Europe for $6,000. Even taking into account overhead costs such as minimal housing and food, transport, guards, bribes and incidental expenses, the brothel owner has still made some serious profit from this single slave. He likely owns more slaves, too.

Countries and families that are sources of trafficking victims are economically devastated,  socially immobile, and they often have corrupt governments and other ills, so it makes perfect sense from an economic perspective that there are willing and able facilitators of human trafficking in these places. However I think that given alternative prospects, many facilitators (and victims) would not be in this business. It’s ironic in a tragic kind of way that the same economic and social underpinnings drive both captive and captor towards each other.