Wow, this thread has grown.
For what it's worth, for those of you (us? lol) suggesting that we should encourage bands not to play for free, I might point out that price fixing simply doesn't work. In some situations, like on Broadway, the unions can get away with it, but for the most part, in a free market (such as the employment market for musicians), you can't stop people from playing for free, if that's what they really want to and are willing to do.
If the natural settling price between supply and demand, when it's all added up, is zero (or below zero for pay-to-play), that's what the price will be, and any attempt to intervene and and upset this natural equilibrium by price-fixing will only result in making everyone worse off.
The only way to circumvent a price equilibrium like that is with government regulation (e.g. minimum wage laws) or pseudo-government regulation (e.g. unions), which come with their own problems.
Minimum wage laws don't work for the same reason they don't work for other types of employment: They directly cause unemployment. Think about it... If clubs were forced to start paying musicians a minimum of $100/man/night, the clubs that currently pay less than that and aren't willing to eat into their current profit margin (that's all of them, presuming clubs are in business to make money) would simply stop hiring bands in favor of other forms of entertainment, or close (either way, reducing the supply of gigs).
At the same time, the knowledge of higher pay available from the remaining clubs would attract more competition (increase the demand by bands for gigs).
It would be even harder to get paying gigs than it is now. This would be bad for smaller venues, who are okay with bands that only draw 100 people (because that's their capacity anyway), and bad for all bands (because they would have a much harder time getting gigs).
It would also be bad for the public because they would be forced to only see shows at bigger venues, which can afford to pay the minimums (or higher), and that means the public would only be able to see bands that can get booked at bigger venues in the first place (bigger-name bands who charge more and have a bigger draw). These bands currently get paid more than the that minimum wage anyway, and so wouldn't be affected by the new law... other than by the fact that they now have more competition for gigs.
My point is, the only thing a minimum wage for musicians would accomplish, even if informally enforced by people just trying to convince musos not to work for free, would be to make things worse for musicians, clubs, AND the public at large. Nobody wins when you try to mess with supply & demand.
http://en.wikipedia.org/wiki/Deadweight_loss
My guess is that the guys who play for free don't really
want to play for free. Someone said it well earlier in this thread: If a club offered these bands money and free beer instead of just beer, would they turn it down? Of course not.
So it's not really that they play for fun only; it's that they don't understand that they could be charging, or don't care about the consequences of not charging. However, if formerly free bands really started charging across the board for performing, two things would happen: New bands would come in and undercut them, and you'd get into an inverse bidding war until the price goes back to equilibrium (that is, zero or pay-to-play, just like it is now), and also, clubs would find alternatives to entertaining their patrons. Profit margins at most clubs is slim enough that they won't just suck up the difference. They will find other ways to attract customers.
Like I said before, the only solutions are either to be one of those bands that isn't affected by the minimum because you have a good draw and play the bigger clubs for good money already, or to give up and get a day job, and just play for beer yourself (if you can't beat 'em, join 'em).
As far as playing charities for free, one could make a "living" playing only free charity gigs if he wanted to... There are certainly enough of them out there. There is no reason to play a charity gig for free unless you personally would otherwise donate your normal fee to support that charity. If you really don't want the money, and want to support the charity, at least get a receipt for the amount of your fee in the form of a donation, so you can deduct it on your taxes.
In my experience, some of the best-paying gigs are charity gigs. Professional charities understand that a good band is worth the money and are willing to pay for quality. Good bands who don't play too loudly and play music that people like go a long way toward getting people in the mood to donate serious money. Of course, charities would prefer a donated performance, and if they can get a great band for free they'll take it, but IME, real charities are not willing to compromise on quality for their big fundraisers, and if it comes down to choosing between free or quality, they will choose quality.
Think of it this way... If you are providing a service, there is no such thing as "playing for free." If you're not charging a fee (or charging a reduced fee), it's another way of saying that you are donating your services (or the difference).
So, whenever you play for free, consider that what you're really doing is donating to that club.
So the question for you is, why on Earth would you do that?
I suspect that the answer is, you just love to play so much that you don't care if you have to pay directly into someone else's profits in order to do it (in this case, the value of your time, effort, and expenses).
My advice to bands who don't have a big enough draw to play the bigger clubs is to promote your own shows. It's easier than it sounds. Rent out the club for the night, hire an opening band, have your own band headline, advertise the show, charge a cover, and keep the profits for yourself. Then, everybody wins.
Hope this helps!