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All told, around 80 percent of consumer spending in the United States is done without cash, according to Master Card. The reasons vary, but, put simply, the economics of being a barber are less like running an ordinary retail store than you’d imagine.
Most barber-shop employees, for example, are treated less like full-time staff and more like taxi drivers or freelance employees, and most are required to either rent out a chair for a flat fee each month or pay a significant share of their earnings to the salon owner.
“Tax evasion is relatively common, especially among both-rental salon workers,” Angela Barlow and James Hawdon wrote in a 2015 paper entitled “Sex, Drugs, and Deception: Deviance in the Hair Salon Industry”.
“For example, to avoid paying costly payroll taxes on one or two employees, owners will sometimes make arrangements with the employees to pay them a higher wage in exchange for keeping things ‘under the table’ or for accepting a subcontractor form 1099 at the end of the year that defines the employee as working on a peer-job basis.” One thing for barber shops to consider, however, is the number of customers who walk out after finding out that they can’t charge their haircut, perhaps not wanting to be on the hook for more charges at the no-name ATM in the corner.
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