Opioid Drug Epidemic Takes Toll on America’s Economy
In a note to clients last Wednesday, Goldman Sachs Group Inc. economists say America’s opioid epidemic is sidelining people in their prime working years and contributing to the low rate of men and women who are either employed or looking for jobs.
“Use of both legal prescription pain relievers and illegal drugs is part of the story of declining prime-age participation, especially for men,” Goldman economists wrote in the study released last Wednesday.
Rx drug use has increased dramatically since the late 1990’s, while widespread abuse of prescription painkillers has transitioned into illegal use of heroin and fentanyl in recent years as pills become expensive and hard to access.
The crisis has driven up drug deaths while limiting the number of people capable of getting and keeping a job.
Goldman says the epidemic reinforces its doubts about a rebound in America’s lackluster labor participation rate.
The participation rate, or share of working-age people in the labor force, increased to 62.8 from 62.7%, near the lowest marks in more than 30 years, the US Bureau of Labor Statistics said Friday.
The U-6 or underemployment rate rose to 8.6 from 8.4%, the 1st increase since January; the number includes part-time workers who prefer a full-time positions and people who want a job but are not actively looking.
At the same time, the Goldman economists say it’s unlikely that the drug epidemic has rendered working-age people sitting on the labor market’s sidelines totally unemployable.
“We see little basis for writing off the remaining unemployed, whose rate of drug use has not risen nearly as much as one might think from the surge in drug deaths,” economist David Mericle wrote in the Note.
Mr. Mericle also noted that the economic impact of the opioid epidemic extends beyond the labor market, noting that a recent estimate put the cost in terms of healthcare, criminal justice and productivity at $78.5-B for Y 2013.
“The crisis has grown significantly since then, implying substantial costs to both employers and the public sector,” he wrote.
Have a terrific weekend.