Dispatches from a Pandemic: ‘I have a mortgage to pay’: Sex workers banned from small-business loans under CARES Act due to ‘prurient sexual nature’

Like many self-employed Americans, Andre Shakti has lost most of her income over the past few weeks.

Most of the clients who used to see her in person have stopped calling, the business where she worked as an independent contractor is closed, and a conference she co-organizes has been canceled.

But unlike most sole proprietors and independent contractors, Shakti says she’s not eligible for federal assistance under the $2.2 trillion CARES Act.

It’s one of the few categories of businesses that are banned from receiving federal aid under the CARES Act. Others include cannabis firms and businesses deriving over 50% of their revenue from gambling.

That’s because she’s a sex worker.

Shakti, who works as a stripper, dominatrix and sex educator, says Small Business Administration programs aimed at helping small businesses, including independent contractors and sole proprietorships, survive the COVID-19 pandemic aren’t available to her because businesses that provide services or live performances of a “prurient sexual nature” are banned from receiving SBA loans under federal regulations.

Shakti, who graduated from college in 2011, says she still has student-loan debt and also contributes to supporting her father, who lives in an assisted-living facility. In college, Shakti majored in deaf studies and psychology with a minor in LGBTQ studies. At one point, she says, she thought about becoming an American Sign Language interpreter.

“My sister and I share his monthly rent, which is $2,300 a month,” she says. “I had to have a really serious conversation with my family about what my financial situation was going to be in the future, and I had to dock the amount of money that I was able to give my father, and my mother had to step in. She’s pretty low-income, and that honestly concerns me a lot.”

At least two strip clubs are suing the SBA after being denied Paycheck Protection Program loans, and at least one sex-toy manufacturer was denied an SBA loan in the past because of the “prurient sexual nature” clause.

The CARES Act’s ban on businesses of a “prurient sexual nature” isn’t limited to the new SBA loans that were introduced in the CARES Act; it applies to the SBA’s existing business-loan programs, as well.

Market research firm IBISWorld estimates that strip clubs in the U.S. generated $8 billion in revenue in 2019 and, before the coronavirus, expected the industry to grow at an annualized rate of 4.2%. “Proprietors within the strip clubs industry distanced themselves from the seedy past image associated with clubs,” it said. “Instead, they marketed their establishments as high-class gentlemen’s clubs and cocktail lounges that offer adult entertainment.”

SBA’s standard operating procedure for business loans states that a business is not eligible if “it presents live or recorded performances of a prurient sexual nature” or “derives more than 5% of its gross revenue, directly or indirectly, through the sale of products, services or the presentation of any depictions or displays of a prurient sexual nature.”

The SBA did not respond to a request for comment on the definition it uses for “prurient sexual nature.”

Andre Shakti says she’s lost around two-thirds of her income since the end of February, when her dominatrix clients started canceling and customers stopped going to the strip club.

It’s one of the few categories of businesses banned from receiving federal aid under the CARES Act. Others include businesses that derive more than 50% of their revenue from gambling, or had more than $1 million in gambling revenue in 2019 (which includes many casinos), as well as businesses that sell products that are illegal at the federal level, like cannabis.

Unemployment benefits have been extended to self-employed workers by the CARES Act, but most states — including Maryland, where Shakti lives — were delayed in accepting applications from self-employed workers. Maryland said it would start accepting those applications on April 24.

Much of Shakti’s income requires travel, she says. She regularly speaks at conferences across the country about sexual health and pleasure-related topics, she says. While traveling, she works as a dominatrix, seeing local clients at her hotel, and performs at strip clubs.

Shakti, who works as an independent contractor for strip clubs and as sole proprietor of her dominatrix business, makes between $40,000 and $50,000 in an average year and says she pays her taxes.

In total, Shakti says she’s lost around two-thirds of her income since the end of February, when her dominatrix clients started canceling and customers stopped going to the strip club.

“The week and a half [or] two weeks before we closed, it was dead in there,” she says. “I was gradually making less and less and less until everything shut down.”

Compared with some of her colleagues, Shakti says she’s well-positioned to move some of her business online. She’s built an online fan base through her work as a adult film performer and some less explicit aspects of her businesses, like providing intimacy consulting to individuals, couples and people in nonmonogamous relationships.

Shakti says she still has student-loan debt nearly a decade after graduation and also contributes to supporting her father in an assisted-living facility.

She says she addresses topics including “sexual confidence, intimacy after trauma, exploring kink and BDSM, opening up a pre-existing monogamous relationship and transitioning into or out of the sex industry.” That, she adds, can also be done remotely.

“I do consider myself to be in a very privileged space, but, at the same time, I saw an in-person client two days ago,” she says. “It was the first time I’ve seen a client since I’ve been quarantined for four weeks, but I have a mortgage to pay and I was scared about not being able to pay for it.”

Shakti says she believes that banning businesses that offer services of a “prurient sexual nature” from receiving federal assistance is a “targeted attack” on sex workers.

“It’s basically putting a financial death date on all these workers,” she says.

International organizations, including projects funded by the U.S. government, have warned that restrictions designed to stem the spread of COVID-19 could disproportionately affect sex workers.

Workers from marginalized communities and single mothers will be particularly affected, she says.

International organizations, as well as projects funded by the U.S. government, have warned that COVID-19 — and the physical distancing efforts intended to stop its spread — could disproportionately affect sex workers.

“Many will have fewer clients, increasing the risk of homelessness and the need to accept riskier clients. The closing of bars and other hot spots may also cause sex workers to move from a more protected environment to street-based activities,” according to a report published by Meeting Targets and Maintaining Epidemic Control, an AIDS relief project funded by the President’s Emergency Plan for AIDS Relief and the U.S. Agency for International Development.

Organizations that work with sex workers in Canada have warned that physical-distancing measures are also making it difficult for sex workers to work out of their homes, and made it more likely that those who work on the street will be arrested by the police.

“Sex workers are heavily affected by measures such as social distancing and business shutdowns because they simply cannot go to their workplaces anymore, and are seeing a sharp decrease in their clients. Unlike employees from ‘mainstream’ businesses, many sex workers are not eligible for unemployment benefits,” says Lynn Liu, the development and communications associate at the Sex Workers Project at the Urban Justice Center in New York City.

“Transgender sex workers and migrant sex workers of color are especially vulnerable to this because many are already job- or housing-insecure,” she says, with a third of sex workers identified as African American or black, 17% identified as Caucasian, 11% as Latino or Latina, and 8% as multiracial; 30% did not identify a race or ethnicity. Some 78% identified as women, 3% as men and 19% as transgender women.

“In New York, sex workers come from very diverse backgrounds. There are transgender sex workers, migrant sex workers, sex workers of color, as well as cisgender white sex workers who are in a more privileged position,” says Liu.

Liu says she thinks it’s “deeply problematic” that sex workers are ineligible for financial support from the government.

“Sex workers’ rights are human rights. In a global pandemic like this, the government should implement policies that take everyone’s well-being into account,” she says. “Especially the well-being of marginalized groups.”

‘The way that I heal that is through education and then creating a safe space for people to enter, either physically or remotely, where they know that within this space they are going to be loved and accepted.’

— Andre Shakti

Shakti says she doesn’t just miss her regular income; she also misses her work. “I love the work that I do. I love every single part of it,” she says.

Shakti, who says she started going to strip clubs when she was 18, says she misses the environment and her colleagues. “I know that people have all kinds of different desires, including ones that are considered alternatives from our mainstream, like kink, BDSM, and that they grow up with so much shame around it,” she says.

“What I want to do is to help heal that, and the way that I heal that is through education and then creating a safe space for people to enter, either physically or remotely, where they know that within this space they are going to be loved and accepted and encouraged, not [just] tolerated or demeaned,” she added.

Not every sex-related business believes its products or services are of a “prurient sexual nature.”

Mike Stabile, the communications director for the Free Speech Coalition, a trade association that represents the pornography and adult entertainment industry, says his group takes a more narrow reading of the ban. “Historically and legally, prurient is a very, very narrow term and is not something that necessarily applies to run-of-the-mill adult content,” he says. “Traditionally, [the word] prurient describes a shameful or morbid interest in sex or sexuality. For most of our members, and for most people who enjoy adult content, that’s not how we would describe it. I think we look at what we do, in general, as natural and healthy.”

Evy Cowan and Jeneen Doumitt, the owners of She Bop, a sex-toy store with two locations in Portland, Ore., say they’ve applied for an Economic Injury Disaster Loan from the SBA.

But, he says, his group can’t advise any individual company about what they should tell the SBA.

“We don’t necessarily know what every business does nor whether or not, if a case went to court, their content would be found prurient or obscene — that’s something that no organization can determine,” he says.

Still, some businesses are trying their chances.

Evy Cowan and Jeneen Doumitt, the owners of She Bop, a sex-toy store with two locations in Portland, Ore., say they’ve applied for an Economic Injury Disaster Loan from the SBA. They’ve had to shutter their storefronts and lay off seven employees because of the pandemic, Doumitt says.

She Bop has been in business for more than a decade, but Cowan says several banks have refused to do business with the store because of the products it sells. Securing financing has been almost impossible.

While the word prurient gave Cowan and Doumitt pause, the pair decided to apply for the loan after they looked the word up and saw it defined as “having or encouraging an excessive interest in sexual matters.”

“We laughed about it and tried to figure out how to say it properly and rationalized that we didn’t feel we were encouraging ‘excessive interest in sexual matters’ — we were encouraging just the right amount of interest in sexual matters,” Cowan says.

They haven’t heard back.

The Margin: Baby Yoda, Batman and Billie Eilish face masks — companies look to make social distancing more fun for families

These masks help make social distancing a little less scary.

Protective face coverings have been hard to come by online since panic buyers and some opportunistic resellers snapped up surgical face masks in the early days of the coronavirus pandemic. But now entertainment companies like Disney DIS, -2.95% and the AT&T-owned T, -2.11% Warner Bros., sports leagues like the NBA and NFL, and fashion designers like Christian Siriano and Stacy Bendet are pivoting to produce masks to help people follow the CDC’s updated guidelines to wear cloth face coverings in public to slow the spread of COVID-19.

And many of these brands are also embracing licensing opportunities by putting their signature characters and sports teams on their protective wraps.

The Walt Disney Co. is rolling out non-medical, reusable masks featuring “Star Wars,” Marvel, Disney and Pixar characters, which are now available for preorder online. The $19.99 four-packs come in small, medium and large sizes, and feature beloved figures like The Child, aka “Baby Yoda,” from its breakout Disney+ hit “The Mandalorian,” as well as icons Mickey and Minnie Mouse. There’s also Anna and Elsa from “Frozen,” some “Avengers” superheroes like the Hulk, and Winnie the Pooh. They should ship in June.

“We realize this is a challenging time for families and wearing any type of mask can be daunting,” said Edward Park, senior vice president, Disney store and shopDisney, in a statement announcing the House of Mouse’s new face masks on Thursday. “Our hope is that Disney’s cloth face masks featuring some of our most beloved characters will provide comfort to the families, fans and communities that are so important to us.”

Disney’s face masks feature Marvel characters like the Avengers.


Disney is also giving one million cloth face masks to children and families in underserved communities across the U.S., and donating up to $1 million in profits from the U.S. sales of its cloth face masks to MedShare, which delivers medical supplies to communities in need, through Sept. 30. Indeed, many mask makers are donating all or part of their proceeds to COVID-19 relief efforts, as well, and/or handing out masks to first responders or to vulnerable communities.

Licensing company Trevco, which launched the new subscription-based face mask service MaskClub last month, has partnered with Warner Bros. and Sanrio SNROF, -1.18% to produce masks that boast the Wonder Woman, Batman and Superman logos and cuddly Hello Kitty characters, as well as Hasbro HAS, -4.97% properties like the Care Bears and My Little Pony. Single masks run $13.99 apiece, or a $9.99 monthly subscription mails out a mask a month. And for each mask purchased, MaskClub gives a mask to a first responder.

“These are confusing times. We want to help families make the situation a little better, and hopefully brighter, by featuring beloved brands that resonate with children and making the act of mask wearing less intimidating,” founder Trevor George wrote in a statement. “By outfitting the whole household, children will hopefully find the act of mask wearing less scary when seeing their parents wear it.”

Related: Pandemics affect everyone: What’s this one doing to the kids?

The major sports leagues got into the masks game early on, after teaming up with the e-commerce provider Fanatics. The NBA and WNBA began selling masks featuring the logos of all 30 NBA and 12 WNBA teams on April 17. Single masks run $14.99, and three packs are $24.99, and they are expected to begin shipping on May 21. All proceeds from these masks sales will benefit Feeding America in the U.S. and Second Harvest in Canada.

The NFL is also selling masks sporting the logos of its 32 teams for $14.99 apiece or three-packs for $24.99, with proceeds benefiting the CDC Foundation. They’re expected to ship June 11. The NHL is hawking three-packs of masks representing its 31 teams for $24.99, with proceeds being handed over to Feeding America and Food Banks Canada. And Major League Soccer is selling individual $14.99 masks representing its 26 teams, expected to ship May 8, with sales benefiting Feeding America and Food Banks Canada.

Many bands and musicians are also lending their logos and likenesses to protective face masks. The “We Got You Covered” collection from Vivendi’s VIVEF, -3.47% Universal Music Group includes masks with Billie Eilish’s green man, the Rolling Stones’ iconic lick logo, Ariana Grande’s teardrop, Bob Marley’s likeness, and more. Net proceeds from the $15 masks benefit MusiCares, the charity which supports the music community in tough times, including the current pandemic.

While fashionable face masks may sound frivolous, facial coverings are poised to become essential gear as the pandemic continues to drag on, with a report released Thursday warning that the COVID-19 outbreak could last for up to two more years and infect 60% to 70% of the population. Airlines such as Southwest LUV, -6.73%, American AAL, -10.86% and Alaska Air ALK, -7.90% now require passengers to wear masks on their flights. States like Georgia that are reopening already also have temperature checks and face masks as prerequisites for frequenting salons and other businesses again.

Related:‘It’s something we’re going to have to get used to.’ How some Georgia businesses are reopening, one temperature check at a time

So wearing a mask sporting a familiar character, a favorite team or a pleasing pattern can take some of the fear and unease away from having cover up every time one goes outside. Playful masks also allow people to express themselves when others can’t clearly see their facial expressions.

After “Project Runway” winner turned Payless and Lane Bryant ASNA, -0.69% designer Christian Siriano heard New York Governor Andrew Cuomo reveal in a March presser that medical workers were suffering a dire mask shortage, he volunteered to put his studio to work making masks. He and his seamstresses are now producing upwards of 7,000 masks a week, the Washington Post reported. But he’s also taken to posting some haute couture takes on the protective gear — such as masks made of pearls, ribbons and beads — for some “much needed glamour,” he wrote.

“If you have to wear them maybe they can be fabulous?!” he added. “Who knows what the future will bring.

Stacey Bendet’s Alice + Olivia shared a similar point-of-view on its Instagram FB, -1.23% page, noting, “For the foreseeable future we must all be masked,” before playing up its “fun, sustainable, reusable” masks crafted from excess fabric from the brand’s other designs. For every mask sold, Alice + Olivia will donate a mask to hospitals and communities in need, the company said. The masks run $10 to $12.95 apiece, and most are already sold out. This one was still available at press time.

Forever 21 is also offering a line of $5 printed face masks, which quickly sold out, but should be re-stocked sometime in May. It partnered with Family Promise to donate non-medical face masks to low-income families, and for every mask purchased, it will donate another mask to the charity organization. And Etsy ETSY, -1.72% is full of sellers making and selling fabric masks, with many starting at around $10 apiece.

It’s a win-win for these fashion brands and entertainment licenses: they’re earning goodwill by giving back to the community. But they’re also drumming up business at a time when retailers are taking a hit as shoppers shelter in place, and leagues like the NBA have had to cancel their spring seasons. What’s more, consumers are paying to walk around advertising a brand’s logo or character right on their faces.

And Women’s Wear Daily has noticed that social media engagement spikes when a fashion designer reveals he or she is making masks. Data and analytics firm ListenFirst looked at the average number of responses brands received when they posted about face masks on Facebook, Instagram, Tumbler, Twitter TWTR, -2.49% and Alphabet-owned GOOG, -2.10% YouTube between March 16 and April 16, including likes, shares, comments and retweets. And the response was massive. And brands saw 73.2% more responses on coronavirus-related social media posts mentioning face masks than those that didn’t. Siriano received an average of 36,655 responses to each of his 49 posts about making face masks, for example. Louis Vuitton drew the most, garnering 185,595 responses on average to each of its five posts around face masks.

For those who don’t have the money to spend on name-brand masks, there are plenty of online tutorials to make your own at home — including this hack for folding a T-shirt into a balaclava in 30 seconds, no elastic required.

Here’s another no-sew mask that can be made using a bed sheet.

And here are the best materials for crafting your own masks.

The Moneyist: Our boss quarantined for 14 days after being exposed to coronavirus, yet factory-floor workers are strong-armed to return

Dear Moneyist,

I work in a ship-building factory, and a member of senior management was exposed to COVID-19.

He quarantined for 14 days, but when workers on the factory floor are exposed to the coronavirus, they are told to return to work only after a few days.

Despite the public-health guidelines, people are pushed to work in order to make our bosses happy, and people do go back because they’re afraid for their jobs.


Dispatches from a pandemic:Letter from New York: ‘When I hear an ambulance, I wonder if there’s a coronavirus patient inside. Are there more 911 calls, or do I notice every distant siren? I love my adopted city, and I’m not going anywhere. I will ride this out’

Dear Thomas,

The Centers for Disease Control and Prevention has very clear guidance on safety procedures for employers. Alas, not every employer is following them. I have lost count of the number of letters I’ve received in recent weeks from workers who are aghast at how their company is ignoring official public-health policy.

”Upon learning of a confirmed or suspected case of coronavirus affecting an employee or other individual who has been in recent close contact with the workplace, employers should be prepared to communicate with its workforce in a timely manner about the situation,” according to Proskauer, an international law firm based in the U.S.

“In making such communications, however, employers must remain mindful of confidentiality requirements under the Americans with Disabilities Act — and any applicable state and/or local laws — that limit employers from revealing an employee’s medical information,” the law firm adds. What’s more, the CDC recommends employers disinfect surfaces.

The Moneyist: ‘Coronavirus has ruined everything.’ My husband refuses to work. Is it too much to ask him to find a job when millions of people are now out of work? I’ve suggested jobs with car services and food-delivery services, but to no avail

The government’s Occupational Safety and Health Administration’s “general duty” clause states that an employer should provide a safe environment and “shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees.”

It does not apply to public-sector workers in some states, but it will likely apply to you. Inform your labor union of how people are being pushed to return to work early. If more people come down with coronavirus and die, or have other serious health complications, your company could face lawsuits and serious legal repercussions.

Executive Order 107 states: “All businesses or non-profits in the state, whether closed or open to the public, must accommodate their workforce, wherever practicable, for telework or work-from-home arrangements.” Disregarding the rules on quarantine could have repercussions for your boss that go beyond temporary closure.

The Moneyist: ‘All they care about is making money.’ Can my supermarket manager force me to remove my face mask at work?

In the meantime, please follow all safety procedures. Wear a mask, and gloves, wash your hands and try to remember not to touch your face. I write this and say this out loud because it helps to remind me too. Awareness about this New Normal, and taking the right actions will help see us through this public-health crisis. And thank you for working yesterday, today and tomorrow.

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com

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Hello there, MarketWatchers. Check out the Moneyist private Facebook FB, -1.23% group where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

The Education Department is falling short on a promise to help student loan borrowers during the coronavirus crisis, lawsuit alleges

More than a month after the U.S. Department of Education pledged to temporarily stop garnishing student loan borrowers’ paychecks, it’s allegedly still allowing the practice, according to a new class-action lawsuit.

“With each passing day, countless federal student loan borrowers are suffering needless harm because, in the midst of the COVID-19 pandemic, they remain subject to unlawful debt collection,” said the lawsuit filed Thursday night in Washington D.C. federal court.

The lawsuit, filed by student loan borrower advocates at the National Student Legal Defense Network and the National Consumer Law Center, acknowledges that the Department of Education has the power to garnish wages from people who have defaulted on their federally-backed student loans.

But Education Secretary Betsy DeVos said in late March she was pausing wage garnishment, the attorneys noted. The pause had a retroactive effective date of March 13 and runs through September 30.

Furthermore, DeVos said her department would be refunding around $1.8 billion in garnishments to approximately 830,000 borrowers.

“These are difficult times for many Americans, and we don’t want to do anything that will make it harder for them to make ends meet or create additional stress,” said DeVos said in an announcement at the time.

The education secretary unveiled the wage garnishment pause two days before President Donald Trump signed the $2.2 trillion stimulus bill. The legislation, among other things, lets borrowers take a six-month break from paying their student loans. Americans have $1.5 trillion in student loan debt.

Yet the new lawsuit says garnishments are still happening, at least in some cases. Lawyers point to lead plaintiff Elizabeth Barber, a 59-year-old home health aide who has $10,000 in student debt and made around $20,000 last year. The department is still taking about 12% from Barber’s wages, most recently garnishing $70.20 from her April 24 paycheck, the lawsuit says.

Barber works with people who have cerebral palsy, but her bosses have reduced her hours because there’s less demand for her services right now.

“I have no money in the bank. I need every dollar I earn at work to survive each day, but my hours have been cut because of the virus. I don’t understand why the government keeps taking my money away after it passed a law that says they will stop,” Barber, who lives outside Rochester N.Y., said in a statement.

The Department of Education does not comment on pending litigation, said spokeswoman Angela Morabito.

Still, Morabito added, “the department has taken immediate action to notify employers to stop garnishing wages. The Department’s default loan servicer called employers by phone, sent emails when possible, and mailed letters to employers who could not be reached any other way.”

The department will refund garnished wages “and the employer will be contacted again to ensure the guidance to stop garnishing wages is understood. The Department relies on employers to stop garnishing wages, but is taking every measure to contact employers and refund garnished wages to borrowers until Sept. 30, 2020.”

Garnishment has also become an issue when it comes to stimulus checks. Consumer advocates note the stimulus bill did not prevent private debt collection. More than 10 states and Washington D.C. have issued rules aiming to stop the collectors from taking a portion of a person’s stimulus check money.