MaCCNO: From Cash to Cash App

An out-of-focus black and white photo of a brass band with the MaCCNO logo overlaid it in white. Below the logo reads “The Music & Culture Coalition of New Orleans” in white.

A shift to digital transactions has upended the creative economy and service industry

Musicians, performers, and service industry workers have relied heavily on cash for generations. It’s deeply woven into folks’ lives—declaring cash income for taxes vs. filing W2s, how band members are paid, paying a larger down payment and qualifying for a smaller loan when buying a home, being vigilant when carrying large amounts of cash after a gig—the impact is everywhere. A patchwork of cash and digital applications exists across the cultural economy, with each person finding their own mix of best practices depending on types of gigs, access to financial resources (like a bank account or LLC), and myriad other factors.

The realities of life in the cash economy are generally not considered when economic or labor data is being analyzed, and this contributes to continued marginalization. Like alcohol and live music, a reliance on cash still tends to be associated with negative stereotypes (like drugs, crime, and other vices) by a certain sector of society. This contributes to social structures where those who work in the cash economy often struggle to access various mainstream resources or systems, necessitating a different rhythm of daily life than those who don’t. Musicians and service industry workers are used to using cash for everyday transactions big and small, from buying milk at the corner store to paying rent, from having a drink to paying for the recording of a new album.

 The cash economy can sometimes mean a lack of formal structure. Bandleaders might pay their band members in cash after receiving just one check for the group, or bands with a changing roster might split the cash from a given gig without ever having a “band bank account.” This creates a scenario where financial literacy, specifically lack of access to it, becomes part and parcel with a cash economy, since certain processes and institutions—like opening a bank account, for example—may not be a priority. Lack of credit cards or credit in general can also be a limiting factor. This discrepancy often extends to taxes, as what type and amount of income people choose to declare—or not—means there can be a vast difference between someone’s financial reality and their financial representation on paper and to the government.

When COVID hit in 2020, one unintended consequence was the acceleration towards digital financial transactions and away from cash throughout wide swaths of the economy. After the shutdown, cash suddenly became both hard to earn and less accepted as purchasing went virtual, and touch-less interactions became favored in an effort to reduce social contact. In addition, for many still engaged in a largely cash-based economy, there was a sudden and unwelcome reckoning as many people realized that, due to the lack of an accurate representation of their net income, they did not qualify for unemployment or other benefits.

At the same time, digital forms of payment over the last two decades have opened up new avenues of income for musicians. “Digital tip jars” in the form of Venmo, Cash App, Zelle, and PayPal suddenly became ubiquitous—pre-pandemic they were sometimes used but generally not a primary focus. These apps then became almost like an alternate form of a bank account, but accounts that lacked the same intention and tie to financial literacy that is inherent when one makes the decision to open an account at a financial institution. This can then create even more issues around taxation and documentation that may well be unexpected. For example, a bandleader who primarily uses Venmo to accept tips may soon find themselves in a much higher tax bracket if and when the IRS finally decides to implement a proposed policy that would make all income collected via digital transactions automatically reported if the total is more than $600 a year.

 The move to digital, no matter how long it takes, has a disproportionate impact on certain sectors, demographics, and industries. Individual venues, restaurants, coffee shops, or other businesses adopting cashless payment systems can create notable barriers to access for some members of the community, changing the dynamics of where people spend their time and money. A cashless business can feel unwelcoming to those who, by choice or necessity, primarily use cash for their day-to-day transactions. If the cashless business is part of the neighborhood fabric or provides a needed community service, it can worsen neighborhood dynamics already warped by short-term rentals, gentrification, and displacement. When asked, businesses tend to cast the choice to go cash-free as one driven out of safety concerns, e.g. to avoid a register or employees having large amounts of cash, making them targets. However, the collateral impact on those who live largely cash-based lives can be stark, as it reduces their ability to use or access local businesses and services, pushing them further into the margins.

Broadening financial literacy—a MaCCNO programming priority for 2024—can help musicians and others make informed choices about their ideal balance between a reliance on cash vs. the acceptance of digital payments. However, access to that information is often not geared to those who have been making their living in cash, who may need it most. This is exacerbated by the fact that there is a lack of information about the cash economy because most of the standard ways of collecting economic information tend not to apply—and the techniques that do work are time consuming and necessitate building a high level of community and individual trust.

A city like New Orleans, with an unusually high number of workers in the service industry and cultural economy, must figure out how to fully engage those who rely on the cash economy. It will be crucial to understand how to preserve the benefits and ease of access digital financial applications bring to individuals and economic systems, while also being mindful of how a societal shift away from cash impacts cultural practitioners. And with ever-growing inequities in society and Louisiana in particular, we can’t afford to wait to do it.

The Music and Culture Coalition of New Orleans (MaCCNO) is a broad-based coalition and registered 501c3 non-profit corporation that collaborates with, organizes, and empowers the New Orleans music and cultural community to preserve and nurture the city’s culture, to translate community vision into policy change, and to create positive economic impact.

This space is provided to MaCCNO as a community service and does not necessarily reflect the opinions or editorial policies of ANTIGRAVITY.

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