Here is how a German freind just explained it to me:
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While some parts of the article are correct, the main point is most probably complete hogwa... is true that prostitution was legalized in Germany in 2002. The rationale behind that move was the following. It's a fact that prostitution exists in society, ever has and ever will, no matter whether legalized or not. Bringing it on a legalized level gives the state much more (legal and otherwise) control over prostitution. And those women who VOLUNTARILY choose to earn their money as prostitutes can now enjoy social benefits like health insurance, unemployment insurance or a pension scheme. And, in licensed brothels, they can work in a hygienic environment under safer conditions.
It is also true that the job centres can cut unemployment benefits for people who refuse to accept a legal job without good reason. It is untrue that unemployment benefits are completely terminated in such a situation. The actual consequence is that payment is reduced to a lower level.
So taken together one might expect that women can now be forced to accept - now legalized - jobs in the sex business, or else they have to face cuts in their unemployment benefits. But it's very likely that the claim that such actually happened already is complete hogwash. I have not heard or read about such a case, and I'm quite sure that it would have made great headlines in all media in Germany. One reason why such a scenario is unlikely is the fact that job centres have a fair level of discretion about the decision whom they penalise for refusing a job offer. And there is a collective voluntary self-commitment of all job centres to not actively offering jobs in the sex business, and hence to not penalise people for refusing such jobs.
The combination of both laws - legalizing prostitution on the one hand and penalising people for refusing legal job offers - created a sitution which was simply not planned. It can be expected that prostitution will be exempted by law from normal job placement services in the near future. Until then, the voluntary self-commitment of all job centres serves the same purpose.
The important point is that the term "legalized" in the context of prostitution in Germany does not mean that it is a profession like any other. It is a "semi"-form of legalization for the benefits of women who already work in that field, to provide them with social benefits and better conditions like said above. Prostitution will not go away when society simply averts its eyes, or when society wages a costly yet ineffective legal war against it. Legalization aims to take out the most ugly parts from prostitution - violence against the women working in that field, women being left with next to nothing after their "career" is over, and the dangers of STD's.