America’s opioid epidemic is exacting a massive human tool that also is impacting the economy, Federal Reserve Chairman Jerome Powell said Tuesday.
One of the Fed’s primary goals is achieving maximum employment, or making sure every potential worker who wants a job has one. Lost somewhere in that mix, though, is the portion of the working-age population that can’t work because of their addictions.
Speaking to the issue during an appearance before a Senate committee, Powell called the crisis “a terrible human tragedy” that is having a direct impact on how labor progress is measured.
“From an economic standpoint, some high percentage of prime-age people who are not in the labor force, particularly prime-age males who are not in the labor force, are taking painkillers of some kind,” he said.
Powell cited research from Princeton economist Alan Krueger, who conducted a survey and found that 44 percent of men reported that they had taken some form of pain medication the previous day.
“It’s a big number,” Powell said. “It’s having a terrible human toll on our communities and also it matters a lot for the labor force participation rate and economic activity in our country.”
The labor force participation rate plays a significant role in calculating the government’s headline unemployment rate. Those not considered in the workforce are not counted in the jobless rate, holding the number down and potentially presenting a skewed picture of the employment situation.
Over the past decade, the LFP rate has declined from 66.1 percent in June 2008 to 62.9 percent in June 2018. During the same period, those counted as not in the labor force swelled from 79.3 million to 95.5 million, a more than 20 percent increase.
Deaths over the decade also swelled, rising from about 6 million in 2006 to more than 13 million in 2016, the most recent year for which data were available, according to the Centers for Disease Control.
