Back in September, the Federal Reserve Bank of Cleveland released a report on the opioid epidemic and the labor market.
The bank looked at trends in overdose deaths and drug use to document how the opioid epidemic has spread across the United States. Officials found that rising overdose death rates are getting worse and “could be large enough to have an impact on the labor force.”
In 2016, more than 64,000 overdose deaths were reported. It’s a grim trend that outpaced traffic deaths and suicides, with most of the increase after 2010, which can be attributed to opioids.
Latest figures from the Bureau of Labor Statistics indicate, the number of fatal overdoses from drugs or alcohol in the workplace increased 32 percent to 217 in 2016 from 165 in 2015. While that number may seem small, it’s growing evidence the opioid crisis has now invaded the workplace.
Overdoses from the non-medical use of drugs or alcohol while on the job increased from 165 in 2015 to 217 in 2016, a 32-percent increase. Overdose fatalities have increased by at least 25 percent annually since 2012.
Data on the overdose deaths paints a grim reality of how the opioid crisis is fracturing the American empire from within. The Atlantic provides an explanation of how the labor market is shifting in accordance with the crisis:
Over the past few years, economists have struggled to explain why so many people appear to be dropping out of the workforce. The most telling measure of that is the labor-force participation rate—which measures the percentage of the population that is employed or actively looking for work—which now sits around 62.7 percent. That’s low by historical standards. For example, between 1986 and 2001, labor-force participation grew fairly steadily, to between 65 and 67 percent.
There are many theories about why this figure has been declining in the past decade or so: Automation, a lack of quality jobs, and an aging workforce are all thought to play a role. Still, the shortage of 25-to-54-year old workers—a group economists call “prime age” workers—particularly male ones, remains a big problem for the future of the labor market.
Furthermore, The Atlantic references Alan Krueger’s work of the relationship between missing workers and the opioid crisis:
The economist Alan Krueger’s work has shown that there’s a striking relationship between these missing workers and increasing opioid addiction. According to an analysis done by Krueger, over the past 15 years, labor-force participation among prime-age workers has declined the most in U.S. counties where opioids prescriptions are the most plentiful. He is sure to mention that cause and effect aren’t clear: It’s hard to say whether addiction breeds joblessness, or vice versa. “Regardless of the direction of causality, the opioid crisis and depressed labor force participation are now intertwined in many parts of the U.S.,” Krueger writes.
The increasing number of on-the-job deaths due to addiction is evidence of this. While the opioid crisis is often cast as a problem that predominantly plagues the jobless, some studies show that around two-thirds of those who report abusing painkillers are still employed. On top of the devastating aftermath of injuries and deaths, this can also lead to a lot of workers not performing to their potential.
The concentration of opioid deaths stretches across the United States. The bulk of deaths are concentrated on both coasts and the rust belt.
Four states where the opioid crisis is out of control…
Demographics of opioid use in Ohio demonstrates males age 25-54 have the highest rates of addiction.
Bottomline: While the slowdown in productivity and a deteriorating labor market remains a mystery to most economist. There is a clear sign that the opioid epidemic could be contributing to the problem.