New rules for contractors have unexpected consequences for strip clubs
sfexaminer.com
sfexaminer.com
The clubs, in order to compensate for all the "new" taxes, are only paying minimum wage, and are taking larger cuts of private dance fees from the dancers than they were before, and are in some cases tacking on new fees dancers have to pay, like "private room rental".
Dancers might be getting better benefits under the new rules (health insurance, sick days), but might not, since some of these benefits require minimum weekly hours worked that the dancers mostly don't meet. Dancers are also feeling pressure to be less choosy about what things they're willing to do for different customers, since "it's their job".
Really what it boils down to is that these are not sustainable businesses at the prices they currently charge customers, unless they also avoid paying a bunch of taxes. If they want to keep their dancers from quitting, they'll likely have to raise prices enough to get a similar amount of cash into the hands of their dancers, while also meeting their tax obligations. Not sure if that increase in cost will decrease demand to the point where it just won't work.
That’s not the most obvious take away imo. I’d say it’s obvious that the strippers were doing a fair bit of tax evasion, but having known a few strippers, a successful stripper would still be making good money even with meeting all their tax obligations. The issue the clubs now face is that they can’t properly cover the risks of paying salaries to employees who’s revenue is entirely tip based. It’s really just a completely predictable outcome of a government trying to protect people from their own decisions with regulation. As a contractor myself I dread the day the government finally gets around to saving me from the working arrangement that I have benefitted so greatly from adopting.
How can that be. Wouldn't that simply increase the supply of strip clubs, from more getting into something thats that profitable.
So they are solving issue they themselves created with more laws. Heh.
e.g. good managers who take care of their dancers/customers get the best dancers and so attract the best customers.
Source: There's no way I'm telling
Like people always say, when corporate taxes are discussed (and now I'm guilty of it too): companies don't pay taxes; consumers do.
Imagine Acme Inc selling Widgets at $100.
If taxes go up, the company's first instinct would be to increase the price. This works for some markets and products. However, if the customers and market are sensitive to price, they will lower or stop their consumption from Acme Inc. or move to competitors or substitute products e.g cooking at home instead of restaurants. In that case, Acme Inc has to pay the taxes out of their profits, assuming their profit was high enough, which results in lower profits, or takes losses and go out of business eventually.
If you haven't been offered cocaine or orgasms for money at the strip clubs you've been to, you're doing it wrong.
It sounds a lot more like the complaints are "I was making $X before because I was underreporting my income, but now that the business is on the hook for all this, I'm being forced to comply and am finding that the work isn't profitable enough anymore". Which translates to me as everyone else, who was paying into all these public tax pools, was essentially subsidizing the dancers.
I guess you could argue that some of the stuff, like workman's comp, some people might want to just pocket the money that otherwise would've gone to insuring the risk of being injured on the job. Which I think is maybe irresponsible, since otherwise the burden just ends up getting shifted, again, to the general public (worker injured without worker's comp then ends up on food stamps, or ends up getting their medical debt written off, etc). So we should probably require people to directly pay into these things, like we require people to maintain liability auto insurance.
And I suppose you could also say that maybe the businesses are taking the opportunity to pocket some extra profit, but hopefully the invisible hand of the free market would compete that back down as employees and customers move around based on new pricing/comp.
Translation: "Our business was profitable only when we got to avoid following the same rules that all other employers have to follow." That goes for both the entertainers and the establishments.
Sounds like this is the expected result to me. In a free and fair market, price is a genuine signal of relative scarcity. CA has removed a particular factor that skewed prices in some labor markets. The result should be a correction in those markets.
The tax situation could be cleaned up without making them employees.
[1]Prostitution is legal in my country.
This sounds like a refreshingly constrained non poaching clause. It is quite common for independent contractors to be forbidden from establishing a direct bussiness relationship with the customer's customers.
Apparently, there are lawsuits that precede the Uber issue:
> However, as a result of the lawsuits and ongoing demands by the suing dancers and their attorneys
It's always been an open secret that companies love to mis-categorize workers in order to avoid paying taxes.
> “I think they should control their own sexuality, they should control their own bodies,” he said. “The difference there being, of course, if you’re an employee, you don’t have a choice who you perform for, as an independent contractor you get to choose how you perform, whom you perform for, and what level you’re comfortable at.”
Is a stripper allowed to discriminate on protected characteristics? Can she say that she doesn’t want to strip for Asians, for example? Or will she run afoul of the anti-discrimination laws?
I am confident that when it was first conceived, people sought to do well for individuals. Now, a month doesn't go by without a similar dispute affecting a new industry. The argument is always between individuals that want to become employees, and individuals that want to stay as contractors.
It is a shame that among our political candidate options nobody is really rethinking the system with an engineering mindset. To even begin to grasp the current model and its implications feels like jumping into a legacy project without hope, and that isn't right. It should be simpler.
https://battlepenguin.com/politics/returning-to-america-and-...
I do not like the private model at all, but at a minimum, I agree with you and I think the ACA would have only worked if it forced employers to give employees vouchers to then have everyone buy insurance from a common marketplace. Obama's promise that people could keep their existing insurance was a terrible idea.
It does keep people in America perpetually working. No one can afford to really take time off for themselves even if they have the savings, because if they're not working enough hours to get health care and get sick, that's it. You're fucked. You have to use that other American Healthcare site: Gofundme.
certainly there are skeezy strip joints that take advantage of women without options and do more harm than good, but others could have been a way out. we just locked all the parachutes because some (probably most) people were joyriding with them, but this does greater than zero harm. _some_ people needed those parachutes and couldve changed their life.
im not saying this change is wrong. if you kill your enemy you would kill him again given the chance, but he was still someones son. something good was lost here.
edited a half dozen times before any replies because my brain is mush
The problem you have is with companies like Uber and other who have for nearly decades have abused contract work but strippers were classified as the same.
It’s too bad they got lumped and really shouldn’t have been but we’ve had enough major corporations screwing the middle class evading taxes.
> The whole point about being a stripper is you go in, get fast cash, no one knows how you’re getting it, it’s not documented and it’s not taken from you
I can't imagine why a government might have a problem with that. Starting to think cash-in-hand workers were the target all along.
Sounds like the clubs will need to raise those wages a bit.
Also, the dancer can now unionize which means they can bargain for fairer pay.
This whole piece comes off as a victim plea from the clubs’ owners who’ve been skimming dancers. Time to pony up fellas.
Sorry not sorry that you have to actually start paying taxes on your income like the rest of us. Some of these quotes are really helping to make the case for the law.
And frankly, let’s start with taxing other places, this really doesn’t strike me as a place of conspicuous tax avoidance compared to, say, the board room.
I do not see anything in the bussiness model that precludes raising prices. The issue seems to be that current prices are based on the assumption of tax evasion.
I have nothing against sex work, but it does not strike me as an industry worthy of tax breaks.
I was defining the business model by success with current regulations. I refuse to speculate about market effects beyond the possibility of any change aside from the regulatory change.
> I have nothing against sex work, but it does not strike me as an industry worthy of tax breaks.
Yea I never voted to fund defense contracts either. Yet, those fucks are getting paid. Not much to do about it but vote and revolt.
This article is a year old.
Oh look, a free market!
I'm a capitalist. But I recognize that the difference between theory and reality is that in theory there is no difference.
The reality is the strippers have as much leverage as the other side doesn't (that's the hole concept of leverage). Club owners have the leverage of the cost of setting up a great club, and local regulations.
This then translates to: the more strip clubs in a city, the more they will have to compete. That is, if they aren't colluding * Which is a lot easier when the people controlling that side of the supply equation are likely less than a dozen sophisticated guys in a city (who tend to all know each other). While the supply of labor is likely in the 1000s or 10,000s (and mostly not-so-sophisticated and can't all know each other)
Even more so than servers, strippers are a tip-based job.
I am. Paying taxes on income (that is then taxed again when spent) is a terrible disincentive. Some states agree with me; I would rather see the standard move toward a model free of income taxation than toward universal taxation. Doubly so when the tone of your comment seems to point to the motivation being largely spite.
While I can understand opposing income based taxation, I don't understand why opponents of income based taxation would support specific industries evading existing income based taxation laws rather than working to change the taxation laws for everyone.
Technically, given the way you put it, I suppose I would advocate for more and more specific industries not being subject to income taxation until no industries were paying it. Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming have realized this situation by one means or another. But I agree that, in general, consistent tax laws for everyone is a preferred outcome.
I personally think that how we handle unemployment and food stamps do more to disincentivize work than our income taxation.
Taxation is complex and tricky to do well. Unfortunately it is treated as a wedge issue and this prevents productive discussion and effective policy making.
Just because you're personally caught under a boot doesn't mean you should cheer when the net ensnares someone else. That's called the crab bucket mentality.
> "This whole business will be completely ruined. The whole point about being a stripper is you go in, get fast cash, no one knows how you’re getting it, it’s not documented and it’s not taken from you"
>“Not one of those girls had a check for two weeks over $300. There was a lot of upset. A lot of girls packed up to leave that night. I was one of those girls,” Darla said.
1. Pay your taxes like everyone else.
2. Form your own LLC to contract talent out, call it whatever you like and no one is going to look at your pay stub to know what you do
3. The reason the performers had poor pay was because the club owner was paying them poorly. Ask for more money, because clearly the clubs are losing it by not paying their employees appropriately.
Weirdly enough, this regulation seems like it should spur some classic market capitalism in the strip club business. It appears that the labor is in short supply and demand is rising, so you'd think they'd ask for more than minimum wage!
The clubs set the pay at the base minimum of $15/hr and dancers I talked to said the tipping system has also been upended.
So a lot of dancers left and BSC has a regional monopoly.
I dont really hear any discussion about what happened when asking for a higher salary.
Looks like different women applied and got in.
Maybe talented dancers left but good enough ones replaced them, customers aren’t that discerning even if the prior dancers were more entertaining.