Goldman Sachs Says Opioid Use Is Hurting The U.S. Economy
A new report from Goldman Sachs found that opioid use has become a major factor why prime-age workers, mostly male, have difficulty finding work. Last week, David Mericle, senior U.S. economist at Goldman Sachs said the opioid epidemic is hindering the U.S. economy, including the labor market.
David Mericle, Goldman Sachs:
“The opioid epidemic is intertwined with the story of declining prime-age participation, especially for men, and this reinforces our doubts about a rebound in the participation rate,”
According to Labor Department data, a declining number of American adults are employed or looking for work, and the trend has been ongoing. Compared to the adult population, the labor force has been decreasing, and this phenomenon tends to reduce growth for wages and economy.
In fact, participation in the labor market has decreased 10% for men aged 25-54 since it hit its peak in the mid-1950s and currently sits at 88.4%. But opioid use is not the only issue. Other factors include technology, a population of advancing age, and globalization (outsourcing labor to other countries.)
But economists say that its the increasing use of opioids, including both prescription painkillers and illicit drugs such as heroin that is hindering many people from re-entering the job market.
According to Atlanta Federal Reserve data, around 1.8 million people were outside of the labor market at the beginning of 2017 for reasons other than not retired, in school, disabled, or caring for a family member.
Of those potential workers, almost half (an estimated 881,000) reported in a survey that they had used an opioid the day before, according to a study published by economist Alan Krueger in 2016. A major concern is that globalization and technology have led to fewer jobs for lower-skilled workers, creating unemployment. Then those out-of-work turn to drugs to dull the pain of being unemployable, and are then unable to return or maintain work due to that drug use.
Furthermore, the Federal Reserve revealed in its survey of businesses last spring that employers were having a difficult time filling positions with low-skill requirements – the reason? Applicants either didn’t have the minimum job skills, or they straight up failed a drug test.
According to the Centers for Disease Control and Prevention, an estimated two million Americans are currently addiction to prescription drugs. Also, 4 in 5 new heroin users report first becoming addicted to prescription opioids – in fact, those who are already addicted to painkillers are 40x more likely to become addicted to heroin.
~ G. Nathalee Serrels, M.A., Psychology