We have talked about different aspects of the SC economics. This is what I have stumbled upon recently and wanted to offer up for discussion. Kinda boring, but what a heck, it is a rainy Sunday here in Detroit...
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There's a club in Detroit that pays the girls hourly ($8 or $10 per hour - I can't remember which), and offering benefits. The girls keep all tips and money made from dances. The only catch is that you have to work four scheduled shifts per week.
*offers
I would imagine that if dancers were employees, rather than independent contractors, clubs would have to impose cover charges in the area of $15-25 to guarantee enough cash flow to pay the girls. Ironically, you could go from the current situation, with lower cover charge during the day and on weeknights (or cover totally waived) to having lower cover on weekend nights, since that's when the most people come in.
It would be interesting to see if the "superstar" dancers would try to get "premium" wages, rather than there being a "one price fit all" wage scale.
In any event, it 's not going to happen, because the clubs do so well under the current system. And the nature of the employment lends itself to true "independent contractor" status.
Is it really all that farfetched that clubs might be required to make strippers employees? I can see the IRS issuing a new policy in order to get their cut from all those earnings that go undeclared. It used to be that waitresses didn't have to declare more than a nominal amount in tips, until the IRS became very aggressive about it. Of course, waitresses have never been independent contractors, but other agencies have required freelance workers' status be changed to employee when they work primarily on-site. I'm a little surprised there hasn't already been government action on the whole setup of strippers as ICs paying the club to work.
The reason the charade continues is because both sides benefit, the strip club owners by being relieved of potentially huge fixed labor overhead costs by having (in effect) large quantities of strippers available not only as self-sustaining "independent contractors" but who also (in most cases) tip out to DJs, bartenders, housemoms, bouncers etc.... and the strippers benefit by little if any withholdings, meaning they not only dodge most state and fed taxes but most importantly the massive (and normally unavoidable) FICA 15.3 plus percent off-the-top tax for self-employed individuals, which any person not dealing with all cash would clearly have to pay, and which strippers of course also are legally obligated to pay but rarely do.
In reality the fact that strippers work exclusively for one club and rarely are permitted to work for competitors, and the fact that they have at least 2 or 3 scheduled (mandatory/must show days) -means they are more like employees than independent contractors
I think the girls are, currently, getting the worst of both worlds in a lot of ways. The clubs "control" their income and right to work, in the sense that they have to pay for "amenities" like the DJ and security. But the girls don't really have the opportunity to resist and make demands, that somehow they be given better benefits or working conditions.
In all these discussions, though, I think it's largely just a question of economics. Were there less willingness (based on need? lack of skills? lack of economic opportunity?) to engage in stripping as a money-making activity, there would be less supply of employees, and therefore the ownership would have motivation to do something to keep around the good performers.
In club-heavy areas, there is some degree of this type of incentive going on. At Scores, Rick's, and a few of the Larry Flynt clubs, in New Orleans, for instance, there's some active competition among the clubs for attracting the "best" dancers. Generally, to the club, that means those girls who are reliable about showing up for a shift, who are physically attractive ENOUGH, and who tend to make money. This means that the nicer clubs try to get the word out that their girls benefit by working for them -- free soda all night; free pizza in the dressing room; better house mom; bigger lockers; free escort to the parking garage; that sort of thing. Clubs in less competitive areas can just leave that crap up to the dancer.
This situation also means that a manager's criteria are slightly different from a customer's -- though pleasing the customer is PART of the equation, mostly a manager wants a money-maker, in all that entails. A customer often wants a licentious, easy-to-please girl who doesn't drain his wallet. The two can be at odds. So, oddly, sometimes a large amount of clubs concentrated in one area can actually work AGAINST the customer. We tend to try to get as much as we can for as little money as possible; but conglomerations of clubs can actually increase the cost simply by implication, and instill an "automatic" degree of professionalism and therefore higher demand on the customer. Sure, we aren't dealing with as many unreliable skanks who might pick our pockets (or are we?) but we're also getting less service at a higher price.
That, my friends, is Bourbon Street nowadays ... all cleaned up and Disney-fied. Kind of like what happened to Times Square, and I've heard is happening to Vegas.
I'd be surprised if a lot of clubs made the switch to hiring dancers as employees. That would cause too many problems for clubs with little or no benefit. Can you imagine trying to manage 50 or so strippers? And providing them all with benefits? The paperwork alone would be a nightmare, given the high turnover in this business. In addition the strippers would lose the ability to avoid income taxes and social security, which would take 30-40 percent of their income off the top. Nobody would beneft except the IRS. If a court ever rules that strippers are in fact employees and requires clubs to keep records and deduct taxes, an awful lot of clubs will shut their doors.
I don't think anybody expects clubs to make the switch on their own. The question is whether they might be required to, and I don't think enough dancers would want the change to pressure clubs (as if they could...). That leaves the government, and they could make a case that the public treasury would benefit. Personally, I hope it stays the way it is. I like strip clubs better as semi-outlaw enterprises.
The only way it would happen would be if the IRS forced it to happen-doubtful but hey, never put anything past the IRS. Strip club owners like things fine just the way they are and strippers as a work force are entirely too wrapped up in short term goals to care about something like this. I can't see any scenario in which it would be better for any club owner or dancer.
Actually Professor - This could turn out to be a very good discussion!
I personally don't think 'dancers' (I like that term better) would ever end up as salaried or hourly employees, with or without benefits. I believe the clubs are making their money, as things are today.
And besides, how would the "tips" be handled? Percentage to the dancer and club? If so, how far can you trust the 'dancer' to acknowledge her actual tips?
Any comments from our 'DANCER' members?