Axios | Steve LeVine | July 30, 2017

Many Americans are too drugged-out to work

A slew of reports finds a fresh reason for the chronic inability of American companies to fill skilled jobs: not a lack of skills, and hence a training-and-education crisis, but a surfeit of drug abuse, per the NYT's Nelson Schwartz. Simply put, prime-working age Americans without a college diploma are often too drugged-out to get the best jobs. Opioids remain at high levels, but the surge in drug use is now heroin and the powerful contaminant fentanyl.

The reports suggest a circularity to the crisis in America's rust and manufacturing belts: the loss of jobs and wage stagnation has led to widespread disaffection, alienation and drug abuse; and drug abuse has led to joblessness, hopelessness and disaffection.

But the numbers are all over the map. Some employers and economists say up to half of job applicants do not clear drug tests; others say it is 25%. In the chart above, Indeed economist Jed Kolko, using data from the U.S. Current Population Survey, found that 5.6% to 5.7% of working-age adults didn't work last year because of illness or disability, an unknown percentage of which were because of drug use.

What was evident, Kolko told Axios: A "clear, steady upward trend in illness/disability as reason for not working among prime-age adults. And even more striking, the level and trend are very similar for men and women, even though most of the attention on this issue is going to men."

But the anecdotal and economic evidence is compelling.

• LinkedIn's Chip Cutter found a West Virginia company where "up to half of applicants either fail or refuse to take mandatory pre-employment drug screens." The executive of another company called the drugs epidemic "probably the biggest threat in manufacturing, period."
• "In Congressional testimony earlier this month," Cutter writes, "Federal Reserve chair Janet Yellen related opioid use to a decline in the labor participation rate. The past three Fed surveys on the economy, known as the Beige Book, explicitly mentioned employers' struggles in finding applicants to pass drug tests as a barrier to hiring."

One hopeful note: In a note to clients on July 5, Goldman Sachs's Jan Hatzius said a hard look does not show that the current unemployed are in fact permanently unemployed. "We see little basis for writing off the remaining pool of unemployed, whose rate of drug use has not risen nearly as much as one might think from the surge in drug deaths," the note said.