Refugees filling job gaps created by drugs
The opioid epidemic has crippled communities across the United States, spurred a public health crisis, and is responsible for nearly 100 overdose deaths each day.
Opioid abuse is also hurting America’s job market.
Use of opioids has become a key factor in why "prime age" workers, mostly men, are unable or unwilling to find work, according to a new report by Goldman Sachs (GS).
A declining share of adult Americans are working or looking for work, according to Labor Department data. The trend has been a persistent weak spot for American jobs. The latest government report on jobs is due on Friday.
A shrinking labor force — compared to the overall adult population — tends to hold back growth for the economy and wages, both of which have grown anemically in recent years.
The labor market participation rate for American men between the ages of 25 and 54 has fallen 10% since its peak in 1954. It currently stands at 88.4%, slightly higher than an all-time low of 87.9% in 2014.
In addition to opioid abuse, factors such as technology, an aging population and globalization, have also contributed to the declining participation of working age adults in the labor market.
But the ballooning use of opioids — whether as prescription drugs or heroin — is preventing many workers from coming back into the job market, economists argue.
"The opioid epidemic is intertwined with the story of declining prime-age participation, especially for men," says Goldman economist David Mericle. The crisis has created "significant costs both to employers and the public sector."
Goldman’s report, which was published Thursday, joins a growing body of research about the economic impact of the opioid crisis.
About 1.8 million workers were out of the labor force for "other" reasons at the beginning of this year, meaning they were not retired, in school, disabled or taking care of a loved one, according to Atlanta Federal Reserve data.
Of those people, nearly half — roughly 881,000 workers — said in a survey that they had taken an opioid the day before, according to a study published last year by former White House economist Alan Krueger.
The concern is that technology and globalization, which have led to the elimination of jobs for millions of low-skill workers, is creating a snowball effect of unemployment. Workers turn to drugs and then find themselves unemployable, or unable to maintain work, because of their substance abuse.
Rising deaths due to opioid overdoses among middle-age Americans may be a result of "a long-term process of decline … rooted in the steady deterioration in job opportunities for people with low education," Princeton economists Anne Case and Angus Deaton reported in a study published in March.
Even for unemployed Americans actively looking for a job, opioid use has become a barrier.
The Federal Reserve found in its survey of businesses in May that employers were having a tough time filling low-skill positions. One reason: The applicants didn’t have the minimum job skills.
The other: They couldn’t pass a drug test.