Tuesday, June 10, 2014

Helping the Spanish economy

From 2016, European countries have to declare the percentage of GDP derived from illegal activities like the the sex trade, drug and people trafficking and contraband. For countries like Spain, this requirement could be beneficial because increasing GDP reduces public deficit as a ratio of output.

The problem is,  how do you calculate earnings from prostitution?

Officials from the National Statistics Institution (INE) contacted Anela, the association of alternate clubs to ask them. They wanted to know how many prostitutes were needed to make a club viable, how much they charged for their services and how many clients each prostitute saw each night.

As you might expect, they don’t keep records so at best the figures are an estimate.  José Roca, the spokesman for Anela told them that most clubs have 50 prostitutes who charge between 40 and 70 euros and see between 4 and 8 clients per night.

Estimates show that there are 300,000 sex workers in Spain, five times the number in the UK.  This is not surprising because a government survey in 2009 found that 39% of Spanish men admitted to having paid for sex.

If we now do the maths, with an average of 5 clients a day paying an around 40 euros, that would put the figure at 60m euros a day. Even if we assume that the ladies have days off and probably only half of them are working at any one time, that still gives a sum of 10bn euros per year.

With a GDP of around 265bn euros in the first quarter of the year, we can calculate that prostitution could account for 1% of GDP. Unwittingly, prostitution could therefore  help Spain drop its debt ceiling below the EU 3% limit for output.

Who would have thought that all those rampant Josés and Pacos could actually be helping improve Spain’s economic situation.

PS Thinking about that survey in 2009, if it is correct, that means that almost four out of ten Spanish men we know paid for sex. That set me wondering who those men might be!! Actually, it is probably best to tell myself that the Spaniards we know belong to the innocent 60%.

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