Although the unemployment rate has reached a record low of 3.9%, it doesn’t tell you everything you need to know about the labor market. In a new working paper published by the National Bureau of Economic Research, University of Chicago social scientists examined the dramatic decline in manufacturing jobs throughout the 2000s, which had significant and ongoing negative effects on local employment rates, hours worked and wages.
And, according to the paper, as job losses in the manufacturing industry caused employment levels to plummet, opioid use increased.
Why Manufacturing Matters
The state of the manufacturing industry says a lot about the health of the economy. Researchers established four reasons why economists pay such close attention to the manufacturing sector:
- Size. Historically, manufacturing has accounted for a significant portion of employment in the United States. It accounted for approximately 20% of employment in 1980.
- Concentration. Manufacturing jobs are highly concentrated in specific pockets of the country, meaning that “negative employment shocks” can have catastrophic effects on local communities and widespread regions.
- Policy. Given its size and concentration in regions that are economically-dependent on industry, manufacturing is often a key player in policy decisions.
- Human capital. It’s an industry that provides jobs for low-skilled, less educated workers. For example, since 1980, more than one-third of employed men between 21 and 55 with a high school degree or less worked in manufacturing.
The Correlation Between Economic Losses & Opioid Addiction
Using Census data, researchers found that certain pockets of the United States that were particularly dependent on manufacturing in 2000 suffered excessive and enduring employment losses in the following years. These include parts of Georgia, Indiana, Kentucky, Michigan, Minnesota, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, West Virginia and Wisconsin. Many of these regions make up the Rust Belt, or parts of the United States that were once booming with industry, but are now characterized by a decline in industry and population.
Researchers then examined data from the Centers for Disease Control and Prevention and Quest Diagnostics, a drug-testing company, and found that opioid use and overdose rates increased in those same areas.
Theoretically, job losses in one industry should be replaced by job gains in others. But the paper suggests that manufacturing job losses are different. Low-skilled, less educated manufacturing workers aren’t able to quickly acquire the skills necessary to find a job in another industry, and they also tend to stay put instead of moving to a new city for more opportunities.
The permanent loss of jobs and reductions in wages didn’t just hurt workers financially–it also affected their overall health. The paper revealed that declines in manufacturing jobs was also correlated with an increase in failed drug tests. These negative social implications prevent a region’s ability to ever economically recover because employers may be apprehensive to locate where many potential workers are failing drug tests.
This paper serves as another testament of the devastating consequences the opioid epidemic has on the United States. Now more than ever, it’s so important for high quality, evidence-based, comprehensive opioid addiction treatment to be accessible. At Hemet Valley Recovery Center, we’re helping people heal from addiction and achieve lasting recovery. Contact us at 866-273-0868 for more information about our programs.