Megan McArdle is one of my favorite columnists, and she has a new gig over at the Washington Post, where she recently wrote an article about a fascinating just-released economics working paper that caught my eye. The authors, Jennifer Doleac and Anita Mukherjee, studied how the opioid addict population has responded to the drug naloxone becoming more readily available.

Naloxone (a.k.a. Narcan) shuts down the effects of opioids, so it is commonly used by EMTs to rescue people who have overdosed on opioids, including heroin. Out of concern that it can take a while for EMTs to arrive, states have passed laws making it easier for ordinary people to get naloxone, allowing addicts to be rescued by family, friends, and fellow opioid users.

The Doleac-Mukherjee study explores the possibility that this is creating what economists call a “moral hazard.” The basic idea is that naloxone reduces the risk of dying, and the risk of dying is part of the non-financial cost of using opiods, so naloxone effectively reduces the price addicts pay to get high. The  law of demand predicts that when the cost of something goes down, people will buy more of it. So making naloxone more available could cause an increase in opioid usage.

If you’re not used to economic thinking, this might seem crazy. It’s hard to imagine addicts thinking, “Since people around me have naloxone, I can use more drugs!” It’s even harder to imagine that someone who has never used opiods will suddenly think, “Hey, with all this naloxone around, I think it’s time to try heroin!”

What makes this theory plausible, however, is that economic effects happen on the margins. Every day, some Americans decide whether or not they will use heroin that day. Some say “yes,” and some say “no.” And it’s reasonable to assume that some people who say “yes” are just barely saying “yes,” and some who say “no” are just barely saying “no.” Those are the people most affected by changes in incentives: Give them a slight nudge in the other direction and they might make the opposite choice. So while most heroin non-users will not be swayed by naloxone, there are likely to be some who change their mind.

Similar effects have been seen in other contexts. The most famous example is when seat belts were required for automobiles. Economist Sam Peltzman predicted that since seat belts made accidents less dangerous, people would start to have more accidents, and subsequent studies have confirmed this prediction. The effect is not huge, but it’s real. In economic terms, since seat belts reduced the “cost” of accidents, people “bought” more accidents.

That’s not to say that people literally make a conscious decision to have more accidents. But knowing that the seat belt will protect them from minor accidents, they may decide to drive faster, or they may feel it is safer to fiddle with the radio or talk to passengers more often.

If that still seems unlikely to you — if you’re sure that you would never drive recklessly just because your car protected you better — then consider a scenario suggested by economist Gordon Tullock: Disable your air bags, remove your seat belts, and mount a seven-inch steel spike in the center of your steering wheel, pointed straight at your chest. Now ask yourself how your driving would change. Given that even a moderate accident could drive that spike into your heart, you will probably drive a lot more carefully. But if you agree that making your car more dangerous would make you drive more carefully, then you must agree that the level of safety you currently enjoy is allowing you to drive less carefully. You are responding to an incentive by driving more recklessly.

(Use of the name “moral hazard” for this phenomenon is unfortunate, because it implies a judgement against some measure of morality, and that’s not usually how economics works. The term comes from the insurance industry, which has to worry that car owners who can’t make their loan payments will “sell it to the insurance company” by driving the car into a river and reporting it stolen, or that building owners who are upside down on their mortgage will burn the building down for the insurance money. But the problem also rears its head in more mundane ways, such as when people with theft insurance are more likely to leave their car windows cracked open on sunny summer days, and more likely to leave their car running in the driveway in winter with the keys inside. And yes, people with insurance also get into more accidents. The insurance industry takes a dim view of all this, thus the name “moral hazard.”)

Getting back to opiods and naloxone, there are no data sets that directly report opioid consumption, so the study looked at proxy variables, such as opioid-related crime and opioid-related emergency room visits. Because the dates on which naloxone became available vary from state to state, the study was somewhat able to randomize away confounding variables. E.g. The proxy measures in one state might change because law enforcement anti-drug activity changed at the same time that naloxone became available, but that coincidence would be unlikely to occur in every state. This creates a kind of “natural experiment” that allows for stronger results.

So, cutting to the chase, are addicts using more opioids because of naloxone?

Yes, and to a surprising degree. The Doleac-Mukherjee study observes that the introduction of easily-available naloxone is associated with a 17% increase in arrests for possession of opiods and a 27% increase in arrests for selling opioids. Opioid-related emergency room visits went up 15%.

(There are a few caveats, of course. The study is a working paper that is being released for review, so the results could be subject to revision. Also, as with any study of this kind, the authors make a lot of reasonable-seeming assumptions — which are extensively documented in the paper — some of which might turn out to be wrong in ways which substantially alter the conclusions.)

The opioid-related mortality figures are especially interesting, and I’ll get to them in a minute. But I want to address one part of the study that’s been upsetting people on Twitter:

Naloxone access may unintentionally increase opioid abuse through two channels: (1) saving the lives of active drug users, who survive to continue abusing opioids, and (2) reducing the risk of death per use, thereby making riskier opioid use more appealing.

To be very clear, contrary to what alarmed Twitter users are claiming, the study authors are not saying that saving the lives of drug users is a bad thing.

The reason they bring up this issue is because the study is intended to look at increasing opioid use due to the “moral hazard” behavioral change (channel 2), but opioid use could also increase simply because longer-lived drug users have more time to consume drugs (channel 1) and the study cannot directly distinguish between the two explanations. It would be dishonest not to mention this.

In any case, when we look at the mortality figures, Doleac and Mukherjee discovered something astounding:

On average across all urban areas, we find that these laws have no significant impact on the opioid-related death rate. Thus, while the risk per use has gone down due to Naloxone access, the number of uses increases enough that we find no net effect on opioid-related mortality.

In other words, in response to the availability of naloxone, opioid users appear to have increased their use of the drugs so much that it completely negates the life-saving benefits of naloxone.

The magnitude of this effect was a surprise to the researchers. In an email message, Dr. Doleac explained what it means for the first causal channel:

When we first started this paper, we expected to find a big decline in mortality, in which case that channel could be very important. Given that we don’t find a net decline in mortality, it is probably less important[.]

In her article about the Doleac-Mukherjee study, Megan McArdle discusses possible policy responses to this startling finding:

The coldly logical response to this would seem to be to discontinue naloxone use. But there’s something repulsive about that conclusion, and Doleac and Mukherjee can’t bring themselves to go there. “Our findings do not necessarily imply that we should stop making Naloxone available to individuals suffering from opioid addiction,” they write, “or those who are at risk of overdose. They do imply that the public health community should acknowledge and prepare for the behavioral effects we find here.”

Sally Satel echoes Doleac and Mukherjee, both on the moral hazard of naloxone and on whether access to it should continue. Satel, a psychiatrist who is also a drug policy scholar at the American Enterprise Institute, says the paper’s findings reinforce what she has heard from patients: “Patients occasionally tell me that having naloxone on hand has served as insurance against overdose. So, in some instances, it enhances risk taking.”

“That said,” she emphasizes, “we must use it to save people in the immediate term.”

So how can public policy prepare for those “behavioral effects” found by Doleac and Mukherjee? Satel suggests we look at civil commitment for patients who overdose multiple times in a short period. But she also notes that civil commitment can’t work without good treatment options — and in a lot of places, those aren’t available.

Which brings us back to something that’s easy to forget about the Peltzman Effect: It can be used to argue as much for more regulation as for less. Insurance companies, after all, have been fighting moral hazard for centuries, which is why they reward people who install burglar alarms or fill in their swimming pools (or punish people who don’t do those things). And so, too, can the government — for example, by aggressively ticketing speeders, passing tougher drunken driving laws, or using a combination of carrots and sticks to help addicts get clean. There are better policy responses to moral hazard than mounting a spike on the steering wheel — or depriving addicts of a second chance at life.

Much of that seems reasonable, but I wish McArdle had considered something else that’s easy to forget about the Peltzman Effect: It’s not necessarily a bad thing. When surgical anesthesia became a lot safer during the last century, we began to do a lot more surgery. When Elisha Otis invented the safety brake, people all over the world started riding elevators. As air travel becomes safer, more people flew through the sky. Doing more of what we want is usually considered a good thing.

That’s because economists usually make a formal assumption that people will act rationally to improve the quality of their lives. So if people decide to consume more of some goods — apples, oranges, antibiotics, haircuts, televisions, surgical anesthetics, elevators, airplanes — economists assume they do so because it makes their lives better. So why shouldn’t economists be happy that naloxone allows heroin users to consume more heroin?

There are two common answers to that question. One is to reject the idea that heroin is a “good.” This is a common position in public policy analysis, where certain actions, such as prostitution or consumption of illegal drugs, are deemed to be axiomatically bad. Doleac and Mukherjee kind of take this route by default, never really considering that increased opioid use may be a benefit. However, being good economists, they do allude to the possibility, noting that “welfare implications of drug and alcohol abuse themselves are unclear: Some argue that people can do whatever they want to their own bodies, no matter how harmful.”

McArdle takes the other route, arguing that because drug use is addictive, it’s not an actual choice:

It makes a certain amount of sense that the Peltzman Effect would show up particularly strongly in drug users; after all, drugs hijack the brain’s reward system, redirecting it toward drug-seeking even at high personal risk.

In other words, drug addicts fail to be rational in pursuing the improvement of their lives: Their addiction takes away their ability to make rational choices, so their apparent choices no longer represent consumption decisions that improve their lives. Somebody has to step in and make those choices for them.

McArdle’s argument is somewhat undermined by the Doleac-Mukherjee study itself:

It may seem surprising that drug users respond to incentives in a sophisticated way. One may think that drug users are poor decision-makers or that addiction makes rational choices impossible. Addiction surely clouds judgement and makes policy in this area difficult, but there is substantial evidence that even drug users respond to incentives. A large body of empirical evidence documents that the consumption of addictive substances is sensitive to prices. For example, increasing taxes on alcohol reduces alcohol consumption (Cook and Durrance, 2013). Alcohol abuse also responds favorably to increasing the likelihood of punishment, as seen in evaluations of the 24/7 Sobriety program (Kilmer et al., 2013). Hansen, Miller and Weber (2017) show that marijuana consumption is price inelastic in the short run, but quickly becomes price elastic, with consumers reducing their consumption in the face of higher marijuana taxes. And finally, Moore and Schnepel (2017) show that a massive reduction in the heroin supply in Australia resulted in a long-term reduction in heroin consumption among those using heroin at the time, due to a spike in the price of the drug. These findings suggest that, at least on the margin, drug abuse may be sensitive to non-monetary costs such as the risk of death.

If drug users are rational enough to alter their behavior to respond to these changes in incentives, that undermines the argument that their decision to consume drugs is irrational, leaving the way open for the possibility that increased opioid use is actually a benefit of naloxone.

That may seem a little insane, because, you know, it’s heroin. But suppose we could figure out a way to make opiates completely safe to use. This would likely cause a big increase in heroin use, but I hope you’ll agree that an increase in the use of completely safe drugs is not a health crisis. Nothing is completely safe, of course, but maybe between naloxone and some other policy changes, we can get close enough to greatly improve the lives of recreational opiate users.

Some nations have experimented with supervised injection centers which provide sterile equipment, trained staff, and of course a supply of naloxone.

Studies consistently show that supervised consumption facilities work. These kinds of sites have opened in Canada, Australia, and Europe, showing drops in drug overdoses, related emergency care calls, risky behaviors that lead to HIV or hepatitis C transmissions, and general public disorder and nuisance associated with drugs.

(I don’t know if there are studies on whether supervised injection centers lead to increased opioid use, but I wouldn’t be surprised if they do.)

One thing these centers do not provide are the drugs themselves, so addicts still face risks inherent to a drug supplied with uncertain concentrations, uncontrolled contamination, and unpredictable adulterants. At the risk of yet another increase in consumption, we could conceivably control all of those problems — and reduce the need for addicts to commit crimes to feed their habit — by permitting the development of a legal source of drugs that is inexpensive, uniform, sterile, and…hmm…I think I’ve just invented the friendly neighborhood Heroin Bar.

About a year ago, my friend Jennifer was mocking our current lack of school choice with this analogy to the Supplemental Nutritional Assistance Program (SNAP):

…the system we have, wherein people are given food stamps to spend at whatever store they please, is FAR better than a system wherein poor people are only able to get food from ONE specified grocery store in their neighborhood — and if that store is subpar and has a crappy selection of food, tough shit for them; if they want to shop at a decent grocery store, their only option is to move to a neighborhood which has one. Yet that dysfunctional hypothetical is EXACTLY how our public education system works now.

The SNAP program is far from ideal, but it’s much better than Jennifer’s laughably zany idea.

Fast forward a year, however, and it turns out that the Trump administration has come up with something much, much dumber.

The Trump administration wants to slash food aid to low-income families and make up the difference with a box of canned goods — a change that Office of Management and budget director Mick Mulvaney described in a Monday briefing as a “Blue Apron-type program.”

“What we do is propose that for folks who are on food stamps, part — not all, part — of their benefits come in the actual sort of, and I don’t want to steal somebody’s copyright, but a Blue Apron-type program where you actually receive the food instead of receive the cash,” Mulvaney said. “It lowers the cost to us because we can buy [at wholesale prices] whereas they have to buy it at retail. It also makes sure they’re getting nutritious food. So we’re pretty excited about that.”

People have come up with a lot of questions about this plan, and I have a few concerns of my own.

[Update: And so does my friend Jennifer, who scooped me on this angle with a post of her own.]

Will it really be cheaper? Sure, the government can buy the food in bulk, but they still have to distribute it to everyone, which is a job that retailers do right now. Can the government actually perform the distribution cheaper than people whose livelihood depends on controlling costs?

What about delivery costs? Under the current system, the cost of getting the food to people’s homes is born by the SNAP benefit recipients themselves, in the sense that they pick the food up themselves. Granted, delivery is probably a nice time-saving benefit for recipients, but there’s no way it’s cheaper for the government.

What about people who move a lot? What about transients and migratory farm workers? What about people who crash with friends? What about the homeless? How will the delivery service work for them?

(Frankly, I wouldn’t expect the deliveries to last. Somebody will decide that since poor people aren’t working, they have plenty of time to pick the food up from a local depot…thus more closely conforming to Jennifer’s original mocking suggestion.)

Even if the system of in-kind food distribution reduces costs, I’m pretty sure it will be far from cost effective — recipients will be getting far less bang for the buck. With food stamps or EBT cards, the recipients get to make their own choices about which foods to buy, which means they can carefully target their needs. That’s just naturally more efficient than letting distant bureaucrats decide what they need.

I hope these food packages will be customized to handle common medical situations, such as low sugar for diabetics, gluten-free for people with celiac disease, no peanuts for those with allergies. On the other hand, the proposed “America’s Harvest Box” program closely resembles the USDA’s current Commodity Supplemental Food Program, which offers only 52 different foods. Even a 7-Eleven stocks over a thousand items.

In any case, there are other reasons besides medical needs for customizing food choices. Secretaries, store clerks, dock workers, nursing mothers, and heart patients all have different food requirements. In addition, many poor people don’t have very versatile kitchens, so they would be better off if they could select foods they can cook easily. And it’s a lot easier to satisfy a picky child with the 30,000 choices from a grocery store than to force them to eat foods they don’t like.

In the long run, with billions of dollars to be spent on food every year, the selection of items to offer is almost certain to be captured by lobbyists for the agriculture industry. They won’t care what foods poor people like, and they won’t even much care what foods are healthy. Instead, food choices will be driven by which agricultural sectors contribute the most money to campaigns or have the most employees in swing states.

The craziest thing about “America’s Harvest Box” program is that it is a giant government-run program proposed by Republicans. Conservatives are supposed to love efficient free markets and hate planned economies, but when Republicans propose programs like this, it shows they don’t really understand why free markets are good. They don’t really believe that individual consumers making choices for themselves will be far better at it than buildings full of government bureaucrats. They only give lip service to “free markets” because it’s what they think their donors want to hear. In practice, gigantic socialist agricultural programs go over just fine with American Republicans. 

I know I shouldn’t be picking on left-leaning goofballs (because they’re powerless these days, and all the damage is being done by the right) but Kate Aronoff at In These Times has written the dumbest thing I’ve seen yet about the Whitefish Energy scandal.

The article is titled “Repulsed by Whitefish Energy? Maybe You Also Hate Capitalism.” That sounds like it might be a defense of the Whitefish mess in the name of greed-is-good capitalism. Or it could be a snarky send-up of that kind of that argument. But what it turns out to be is an argument that if you hate the Whitefish scandal, you might also want to start hating capitalism.

…Whitefish Energy is to disaster capitalism as Martin Shkreli is to America’s for-profit healthcare system: the most obviously bad actors in industries that are full of bad actors by design.

As Myerson wrote, “Satisfying though it might be to adorn his face with a black eye … there are more worthy objects of our loathing. All of Shkreli’s appalling antics and characteristics are in fact emblematic of the real villain: capitalism. Shkreli is capitalism embodied, and if you hate him, you’d do well to take up hating capitalism with at least equal fervor.”

The same goes for the eminently punchable team at Whitefish Energy. […] They did enter into a $300 million contract with the Puerto Rico Electric Power Authority (PREPA) to perform work that they are grossly unqualified to do, on a scale that dwarfs any of the contracts they’ve had thus far. Whitefish’s social media arm also got in a public spat with San Juan mayor Carmen Yulín Cruz, at one point writing, “We’ve got 44 linemen rebuilding power lines in your city & 40 more men just arrived. Do you want us to send them back or keep working?”

To review what we know: Whitefish Energy, a small company owned by a guy who is friends with with U.S. Interior Secretary Ryan Zinke, received a $300 million no-bid contract from the government-owned electricity provider of Puerto Rico. In other words, a government-run entity gave a very sweet contract to a guy with good contacts in high political offices. This is not — in any way, shape, or form — free-market capitalism.

Ironically, the Whitefish scandal could prime the pump to privatize PREPA entirely, a long-sought goal of corporate-friendly interests on the island. The federally-appointed fiscal oversight board that oversees Puerto Rico’s government recently announced that it would move to install a Flint-style emergency manager to oversee the utility with an eye toward selling off large chunks of it. Included in their official reasoning for the decision was PREPA’s contract with Whitefish.

Aside from the gratuitous reference to the awful mess in Flint, Michigan (also largely a failure of governmental entities) this sounds like maybe a step in the right direction. (Although if the privatization effort is overseen by the same corrupt people who ran the government entity, things are unlikely to improve much.)

There’s a general moral sickness to this that’s all-too-common, particularly when corporations and right-wing governments decide to profit off of disasters—financial, ecological or otherwise. Take the case of Jeffrey Chiesa, the lawyer appointed by his friend and ally Chris Christie, New Jersey’s governor, to put Atlantic City’s indebted fiscal house in order.

This is more of the same: The elected leaders of Atlantic City screwed up its finances, and the elected governor of New Jersey gave a sweetheart deal to one of his friends, and somehow that’s capitalism’s fault?

Look, just because a corporation is involved doesn’t mean it’s capitalism. The Whitefish Energy scandal looks like standard-issue government corruption: Somebody with influence got somebody with power to give them the public’s money. It’s insane to call that a problem with capitalism.

Everybody seems to be making fun of Salon these days, and I think I’m beginning to understand why. Case in point: Marcy Wheeler’s post about the recent GOP debates, responding to some of Rick Santorum’s claims about insurance market consolidation under Obamacare:

Santorum claimed to be a lot less worried about consolidation in the watery beer market because, “There’s no town in American anymore that doesn’t have a brewery.” Given that alcohol is one of the most regulated markets, it’s odd that government involvement hasn’t created dangerous consolidation in bad beer.

Wheeler has this backwards. Government involvement did in fact cause consolidation in bad beer. At the very height of government involvement — the total prohibition of beer or any other kind of booze during the 1920’s — the beer market was consolidated under criminal gang bosses like Al Capone, who literally killed their competition. The beer was of terrible quality, and tainted alcoholic brews produced by criminal gangs are estimated to have killed thousands of people.

Even after prohibition, beer production was limited mostly to a few large companies, and it was hard for new and innovative breweries to get started, in part because of the red tape of regulation, and in part because the only place to learn beer making was the big breweries that were licensed for it. For most of the 20th century, the United States produced only a dreary selection of mass-produced corporate beers. If you wanted good beer in the U.S., you bought something imported.

That all began to change in 1979, when President Jimmy Carter signed the bill making it legal for people to brew beer in their homes. Over the next few decades, thousands of people learned to brew beer, and many of them got good enough at it to make the leap into commercial brewing. This was the start of the microbrewery revolution, and it transformed the United States from a country with famously bland beer to one of the most innovative and diverse brewing cultures in the world.

The New York Times has a fascinating story by Sarah Maslin Nir about conditions in New York nail salons. According to her, thousands of immigrant nail technicians are being exploited by salon owners.

As if on cue, cavalcades of battered Ford Econoline vans grumble to the curbs, and the women jump in. It is the start of another workday for legions of New York City’s manicurists, who are hurtled to nail salons across three states. They will not return until late at night, after working 10- to 12-hour shifts, hunched over fingers and toes.

On a morning last May, Jing Ren, a 20-year-old who had recently arrived from China, stood among them for the first time, headed to a job at a salon in a Long Island strip mall. Her hair neat and glasses perpetually askew, she clutched her lunch and a packet of nail tools that manicurists must bring from job to job.

Tucked in her pocket was $100 in carefully folded bills for another expense: the fee the salon owner charges each new employee for her job. The deal was the same as it is for beginning manicurists in almost any salon in the New York area. She would work for no wages, subsisting on meager tips, until her boss decided she was skillful enough to merit a wage.

It would take nearly three months before her boss paid her. Thirty dollars a day.

It’s a well-reported, well-written story, and I have no doubt that there are some bad things going on in the nail salons. However, I think Nir is missing some important aspects to what’s going on in New York nail salons. When you encounter a tale of exploitation like this, there are some important questions you need to ask.

Probably the first of those question should be, If working in the nail salons is so awful, why don’t the women don’t just quit and get better jobs?

I’m sure just asking that question will make some readers want to tell me to “check my privilege,” but I think it’s important to think seriously about the answer. The news is full of complaints about McDonald’s and Walmart employees being paid only the minimum wage. That’s still more than these nail technicians are earning, so you’d think they would be applying for those jobs, offering to work for the same pay (but without protesting in the streets about it). So why don’t they? Why don’t they get better jobs?

Nir never address the issue directly, but she nevertheless supplies a few answers:

Almost all of the workers interviewed by The Times, like Ms. Ren, had limited English; many are in the country illegally. The combination leaves them vulnerable.

These workers are foreigners in this country illegally, so the biggest reason why these women can’t get better jobs is that the United States government doesn’t want them to work here at all. Most legitimate businesses, including major employers like McDonald’s and Walmart, are simply not allowed to hire them. They have to take what work they can get.

Also, they’re probably afraid to complain too much about working conditions because they fear they’ll be deported if they attract too much attention. My boss can only fire me, but Ms. Ren’s boss can get her thrown out of the country if she pisses him off.

Besides, even if their immigration status allowed them to work here legally, they still wouldn’t be allowed to work as nail technicians in New York because they haven’t met the state licensing requirements.

Between U.S. immigration law and New York State professional licensing requirements, government restrictions have robbed these women of much of their bargaining power.

The next question to ask is What do these women have to offer employers?

Not much, according the the facts in Nir’s story. Most of them don’t even know how to do the job yet, so they will have to be trained by whoever who hires them, and their inability to speak English means they can’t serve a customer without help.

In fact, their lack of English language skills severely limits the jobs they can do: Not only do they need to find a job where talking to English-speaking customers is not a requirement, they are also limited to seeking employment at businesses where the managers speak their language.

Another question to ask is What do these women get out of this?

The 20-year-old woman mentioned in the quote above, Jing Ren, starts out by paying $100 to get the nail salon job, and she works for almost three months for free, after which she earns $30/day for a 10-12 hour shift. Here’s the last report on how she’s doing:

She quit on March 8. Her boss said nothing; one colleague hugged her goodbye. After 10 months she had made about $10,000, she said.

Last month, she found a $65-a-day job at another nail salon.

Even if she only works an 8-hour day, that’s less than the New York minimum wage (but more than the minimum for tipped employees).

That doesn’t sound very good, but it does bring me to the next question. These workers certainly make less than regular American workers, but How do their wages compare to wages where they came from?

The Davos global wage calculator tells me that the average private sector wage in China is 32706 CNY, or about $5267. So Ms. Ren paid the equivalent of one week’s wages for the average Chinese worker to get her nail salon job, and worked for free for three months, and yet still managed to earn $10,000 that year. That means that at the age of 20 she is already earning the world average wage, or almost double the average wage in China. With her new $65-a-day job, she will be able to repeat that annual performance by working only three days a week. If she works a full five days a week, she will earn triple the average Chinese wage.

To put that in perspective, the equivalent for an American would be a 20-year-old without a college degree getting an offer to work overseas, paying an $800 fee to get into the program, working through a 3-month internship, and then going on to earn $80,000 the first year and $120,000 the next.

I’m not saying that all the nail salon owners are wonderful people — there’s way too much going on in that article (and its followup) to believe that. Nevertheless, that hasn’t stopped an ambitious, hard-working, risk-taking young immigrant like Ms. Ren from prospering. And as with most immigrants, if she has children, they will probably do even better.

(Obviously, I don’t know much about Ms. Ren’s specific circumstances, and I’m greatly simplifying things for purposes of this post, but I don’t think it invalidates the point that she seems to be doing pretty good compared to where she came from.)

The last question, and arguably the most important one, is What do these women want?

We can figure out what these women want by looking at the choices they make. Jing Ren chose to leave her home and cross the ocean to America to work as a nail technician in a string of seedy New York nail salons. And within a year, her mother came over to do the same. That tells us a lot.

Which brings me to my special bonus question: What happens next?

Well, the Governor has a (hastily pulled together) plan of sorts:

Gov. Andrew M. Cuomo ordered emergency measures on Sunday to combat the wage theft and health hazards faced by the thousands of people who work in New York State’s nail salon industry.

[…]

Nail salons that do not comply with orders to pay workers back wages, or are unlicensed, will be shut down.

In other words, if Cuomo’s task force finds workers who are being exploited, they will solve the problem by taking away their jobs? I understand that the goal here is to coerce nail salons into treating workers better by threatening to put them out of business, and it’s possible that this could have a net positive effect. But I guarantee that talk like this is scaring the crap out of all those workers Cuomo says he’s trying to protect. This could easily turn into a disaster that puts thousands of them out of a job. And if Cuomo thinks the nail salons are exploitative, he’s really going to hate some of the alternatives (NSFW).

“We will not stand idly by as workers are deprived of their hard-earned wages and robbed of their most basic rights.”

“Basic rights” like the right to work in a job they find acceptable for a wage they find acceptable?

Some of the proposed regulations seem like they might improve health and safety, but others show a real lack of understanding of the problem:

Salons will now be required to be bonded — which is intended to ensure, through a contract with a bonding agency, that workers can eventually be paid if salon owners are found to have underpaid the workers.

Yeah…salon owners employ illegal immigrants to do unlicensed work at illegal wages, but I’m sure they’ll get right on that bond thing…

The framework for the emergency measures began to take shape shortly after the first article was published on Thursday, according to Alphonso B. David, counsel for the governor. Staff members from several agencies reacted strongly, and began to call one another upon reading the findings, convening on Friday for hours of brainstorming sessions to hash out the plan. A decision was made to take emergency measures rather than go through the usual route by which policies are updated, which involve time-consuming steps like periods of public comment […]

I hear all the best government work begins that way. What could possibly go wrong?

Well, for one thing, the plan to force nail salons to pay their workers more might succeed. As Rich Lowry puts it in his wildly off-the-mark opinion piece,

Surely, one reason that salons can pay so poorly is that the supply of illegal workers is so plentiful.

And this supply of labor must, at least at the margins, crowd out workers already here who might consider working in salons if pay and conditions were better.

These immigrant women bring very little to the bargaining table except their willingness to work in unpleasant conditions for low pay. If you force the salon owners to spend more money on wages and equipment, they’re not going to stick with their unskilled labor force. They’re going to replace them with nail technicians who are already trained, who speak English, and who have the legal right to work here.

Apparently there’s also been a public backlash against low-cost nail salons in New York, with lots of middle class women saying they’ll stop using them. I think their hearts are in the right place, but a move like that that could put the cheap nail salons out of business, which would put immigrant workers like Ms. Ren out of a job.

I understand the desire to try to help, but it’s important to remember that these nail salon jobs (and other low-paying jobs like them all over the country) provide a path up out of poverty for thousands of people every year. The wrong response could shut that down and do a lot more harm than good.