Unrealized Earnings of the Opioid Crisis

October 16, 2019

According to an Associated Press article, the opioid crisis cost the U.S. economy $631 billion from 2015 through 2018. The article states that the biggest cost is unrealized lifetime earnings of those who died.

Apart from my automatic reduction by 1/3 of any numbers floated by experts, I have some questions about the assertion. (These are real questions, by the way, not just me being snarky.)

The deaths cost their families the earnings; but wasn’t somebody else in the country earning those wages and putting them to work in the economy?

And even if employers pulled the trick of making fewer employees do more work for the same pay and keeping the unpaid wages and benefits, the executives or shareholders would benefit. (Would you call that Trickle-Up Economics?) So the money isn’t really lost, it’s just being spent by other people.

And would the fact that early deaths meant that people were consuming less food, fuel and other resources, or were creating less pollution through decreased transportation usage, reduce the negative impact on the environment somewhat? And if so, could that lessen the negative effects of the overall impact to the economy? (Everything in interconnected, after all.)

I didn’t want to reveal the depths of my economic ignorance to you all, so I consulted my friendly neighborhood Economics major, Mary DiLiberti.

Mary pointed out that, in addition to my wages assumption being correct, some people would likely have dropped out of the workforce before retirement age due to death from car accidents, health issues unrelated to addiction, or other problems. So the numbers were probably off-base for that reason, too.

If they had said that the hit came from addicts consuming less, and therefore slowing economic growth, I could understand it. But if that’s what the actuaries meant, they should have said so. The numbers would still be wrong, because they’d still be assuming that everyone would have lived until retirement age or beyond, and would have never gotten more thrifty through lifestyle changes. But it would make more sense (to me, anyway).

So, what’s the actual story?