GDP, Drugs & Sex

In 2014, the European Union requires member states, including the United Kingdom, to include illegal drugs and sex work as part of official statistics that measure Gross Domestic Product – the value of all traded goods and services.

Illegal drugs are reckoned to add £7 billion to the UK economy each year and sex work another £3bn – although tax returns do not reflect this activity, of course.

The UK’s Office for National Statistics plans to include ‘illegal drugs and prostitution’ in quarterly GDP estimates from September 2014.

The European Union uses GDP to calculate member state contributions to its budget.

Sex work capital

The ONS is already said to have estimated that the UK has just shy of 61,000 sex workers. Each is employed 1,300 times for an average rate of £67.16.

London’s new role as a ‘global capital’ for international wealthy elites has coincided with a noted but as yet uncalculated rise in the number of openly advertised sex workers.

London women escorts, often from eastern Europe, ranging in age from 18 to 60, charge rates from £50-£1,200 per hour.

Many pay a fee to agencies that rent London apartments and penthouses where clients can book an ‘incall’ with an escort.

Others escorts work as ‘independents’.

A significant minority are students who earn money from sex work to help them complete their studies.

Other countries

Non-medical drug dealing is illegal in London and the UK. Escorting behind closed doors is largely a private matter between consenting adults.

But drug dealing and prostitution is legal and regulated to various degrees in other countries, like the Netherlands and now in certain American states.

The measured economy in Greece surged by up to 25% when sex work and illegal drugs were first included in GDP figures in 2006.

GDP

GDP was first used to measure the state of the American economy during the Great Depression of the 1930s. GDP tries to measure the value and direction of trade within a country.

It is not a measure or a reflection of national morality – although this new measure will provoke further moral unease in London about its widespread illegal drugs and sex trades.

But some observers say it is logical to try and measure the value of ‘black market’ activities – especially in a city like London where everything seems for sale, including people selling their bodies for sex.

But the timing of this proposed change raises other questions.*

Lack of confidence

Firstly, if illegal drugs and sex work are included as official contributions to GDP, then why not include domestic slavery, illegal gang labour, fencing of stolen goods, backstreet gambling, pirating of music, film, software, clothes and alcohol, protection racketeering, and even the hiring of ‘hit-men’?

Secondly, what methodology will the ONS use to satisfy the EU that its estimates for these activities are correct? For instance, the ONS is considering whether to include sex work data on whether the supply of rubber clothing and sex toys meets demand.

Finally, and more seriously, is it a measure of a lack of confidence in the UK’s supposed ongoing economic recovery?

Does the European Union think the UK economy is in such a bad way that it needs an official injection of GDP data on illegal drug dealing and sex work?