Economics and the mid-life crisis have much in common: Both dwell on foregone opportunities

C'est la vie; c'est la guerre; c'est la pomme de terre . . . . . . . . . . . . . email: jpalmer at uwo dot ca

. . . . . . . . . . .Richard Posner should be awarded the next Nobel Prize in Economics . . . . . . . . . . . .

Monday, November 21, 2005

The Market for Strippers:
How Can There Be a Shortage?

The headline to a recent article in the Edmonton Sun screams "Stripper Shortage" [h/t to JBC].

Wait a minute. When I teach the economics of shortages [or excess quantity demanded over the quantity supplied (not excess demand!)], I tell my students that they must refer to a shortage at a specific price (usually the current price). There is never a shortage if market prices are allowed to adjust freely to shifts in the supply and demand curves.

This article never mentions the price, though it is clear that wage rates underlie much of the economics of the story.
Canada's welcome mat is still rolled out for foreign strippers and lap dancers who can get quick visas to fill a domestic "labour shortage."

Last December, the Liberal government announced it was cancelling a controversial program that allowed exotic dancers to gain temporary work permits based on a national labour market opinion.

But it was quietly replaced by a process that permits strip club owners to bring in foreign dancers just by filling out the proper paper work.
It appears that without immigration the wage rate for strippers would be considerably higher than it is with immigration. Easing the way for foreigners to obtain work permits for stripping means club owners can pay lower wages and earn higher nominal profits (which presumably are capitalized into the value of their firms).

There is, no doubt, some fraud and exploitation in this business. At the same time, I wonder whether some of the concern about fraud and exploitation is just disguised good old protectionism for Canadian strippers. In this respect, is there any reason to believe the economics of stripping in Canada differs much from the economics of mercantilistic protectionism? [see here and here].
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