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Blood and money for short-term employment

by xyonent
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of The great Tim Taylor About the new paper on plasma donation:

John M. Dooley and Emily A. Gallagher take a different approach in “Blood Money: Selling Plasma to Avoid Loan Sharks” (Economic Research Reviewcoming soonpublished online on May 2, 2024. SSRN Working Paper Version (Here). They are investigating how the opening of a plasma center in an area affects low-income residents’ finances. By way of background, they write:

“Plasma, a component of blood, is a key ingredient in medicines used to treat millions of people with immune disorders and other illnesses. With an annual value of more than $26 billion in 2021, plasma is the largest market for human body materials. The United States provides 70% of the world’s plasma supply, and blood products are consistently among the top 10 U.S. exports. The reason the United States produces such large amounts of plasma is that, unlike most other countries, the United States allows pharmaceutical companies to pay donors. Typically, for new donors, the payment is about $50 per donation, but during severe shortages, this can reach $200 per donation. In the United States, blood donations are also relatively frequent, with people allowed up to twice a week (104 times a year)…”

Not surprisingly, plasma donors tend to be young and poor, and they use plasma donation as an alternative to non-bank financing like payday loans.

I was struck by Tim’s thoughts on how this relates to the labor market and regulation.

…It makes me think about the economic stress many Americans face. Getting paid a few hundred dollars for donating plasma a few times is not an ideal solution. Neither is taking out a high-interest short-term loan. In fact, taking out a loan may not be wise at all if you don’t have the income to pay it back. In the modern U.S. economy, hiring someone for even a short-term job requires a human resources department, paperwork, identification, bookkeeping, and tax records. These rules are there for a reason, but the result is that it’s not easy to find a short-term job that pays for a few days, even though there is a semi-underground network of such jobs in most urban areas.

In Roger Miller’s 1964 classic “King of the Road,” he says, “Two hours of pushing a broom can buy you a four-bit 8Γ—12 room.” While the song romanticizes the life of a vagabond to a certain extent, the idea that a low-income person could leave their home and find a two-hour job that pays enough to solve their immediate cash flow problems outside of donating plasma seems nearly impossible in the modern economy.

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