The Economic Impact of the Opioid Crisis
President Donald Trump signed a bill yesterday to help combat the opioid crisis. The legislative package directs funding to federal agencies and states so they can make increasing access to addiction treatment a priority, and sets in place interventions to help mitigate the crisis, like preventing overprescription and training law enforcement to intercept shipments, including the deadly and highly addictive drug fentanyl, at U.S. borders.
It comes as overdose deaths from the drugs have continued to surge. Roughly, 70,000 people died from overdoses last year, according to the Centers of Disease Control and Prevention, a 10 percent jump from 2016–that’s more than the total number of U.S. military deaths in all 15 years of the Vietnam War.
In some cities, concerns about drugs rate as the highest concern. 20% of Americans living in rural areas say drug addiction or drug abuse in their city is a top issue.
And while the human tragedy of the opioid crisis has no number, the economic impact on the U.S. definitely does and has been estimated. In 2017, opioid addiction cost $115 billion, according to an analysis done earlier this year by Altarum, a health care research nonprofit.
These costs represent only a fraction of the total however. The $115 billion only includes treating overdoses in the ER, long term treatment for drug addiction, caring for children whose parents are addicted and are unable to work, and counting the value of wages lost, or in many cases, death.
Since 2001, the opioid crisis’ direct costs are over $1 trillion. And they are saying that is a conservative estimate.
Opioid Epidemic in the Work Force
A look at how opioid addiction is affecting the labor force underscores its impact on the economy as a whole. Despite unemployment rates dropping and economic growth, many Americans have left the workforce. People between the ages of 25 to 54, known as the prime age workers, are employed or looking for work at much lower rates than their peers in other developed countries. Except for people 55 and over, Americans of all age groups are less active in the labor market than they were in 2001.
And the opioid epidemic helps answer the question as to why. Why has the strong job market and its need for more people working failed to pull Americans off the sidelines and into jobs?
The estimate is that without the opioid crisis, the nation’s unemployment rate today would be 5 percent vs 5.5 percent instead of its current rate of 3.7 percent. How? Because more workers currently out of the labor force all together due to an addiction, would be looking for work and people looking for work without jobs would be officially counted as unemployed.
Government officials have said that the opioid epidemic is leveling off though while the CDC recently released numbers however, stating that the death rate has stayed the same for the past three months.
Opioid Abuse Dropping By Employed Americans
Quest Diagnostics, the largest workforce drug testing lab in the country, indicated that the rate of tests coming back positive for opioids peaked in 2011. That year, 1.1 percent of all urine tests among the general workforce were positive. Last year, the rate had fallen by almost half. This could mean fewer people are using or that fewer people who are using are looking for work. It could also mean that businesses that hire large numbers of drug users have simply stopped testing for them.
OxyContin, the drug that set the epidemic in motion, has garnered nearly $35 billion in sales since Purdue Pharma launched the drug more than two decades ago. But they might not be able to keep all of it. Hundreds of lawsuits across the country have been filed against the pharmaceutical company, other pharma firms, drug retailers and medical providers in an effort to hold them accountable for the crisis which started with the idea that these drugs are safe and non-addictive.
With Trumps new bill signed hopefully we can see a decline in the death rates and eventually a turn towards a more thriving workforce in the United States. Those who are suffering from addiction can recover, and when they do, it may create an uptick in the economy as well.