Addiction Steals From Your Personal Finances and the Economy - 10 Reasons Why

Even if you are clean and sober, you are being robbed by the toll substance abuse is taking on the American economy.

A new poll by KFF published last week reveals that of those surveyed, “Two-thirds say either they or a family member have been addicted to alcohol or drugs, experienced homelessness due to addiction, or experienced a drug overdose leading to an emergency room visit, hospitalization, or death.”

In addition, only 46 percent of those with an addiction or who have a family member with an addiction report seeking treatment. The result carries a hefty price for individuals and the economy. Here are just 10 reasons why it matters..

Lost Productivity and Employment Opportunities

One of the most immediate economic consequences of addiction is the loss of productivity in the workforce.

An estimated 70 percent of Americans who use illicit drugs are employed, according to a report by US Drug Test Centers. As a result, employers lose $25.5 billion in lost productivity. Another $25 billion is spent on related healthcare.

Healthcare Expenditures

Addicts often require medical treatment for various physical and mental health issues arising from their habits. The Centers for Disease Control and Prevention (CDC) reports that the costs of addiction-related healthcare, including emergency room visits, hospital stays, and rehabilitation, strain both personal budgets and government resources.

Legal Expenses

Addiction and legal problems often go hand-in-hand.

The American Bar Association reports that individuals with substance abuse issues are more likely to be involved in criminal activities. As a result, many addicts face ongoing legal expenditures.

Reduced Earnings Potential

Individuals grappling with addiction often find themselves unable to secure stable, well-paying jobs. Long-term substance abuse can diminish cognitive abilities, impair decision-making skills, and create a cycle of unemployment and underemployment. As a result, addicts can see their earnings decrease by as much as 40 percent, according to the Substance Abuse and Mental Health Services Administration (SAMHSA).

Strain on Social Services

In addition to physical healthcare, addiction can lead to increased mental health issues. Treatment for addiction is estimated at $600 billion.

In addition to treatment costs, there is an untold cost of funds diverted from other government programs. Those measures include unemployment benefits, housing assistance, and public healthcare.

Family Financial Instability

The KFF survey found that 51 percent of respondents worried that a family member might become an addict. SAMHSA reports that families that include an addict suffer greater financial stress and poverty as a result.

Many family members support their loved ones’ treatment or other costs, such as legal fees.

Impact on Education

The consequences of addiction can have long-lasting effects on education. Students struggling with substance abuse are more likely to drop out of school. As a result, they may limit their future earning potential.

Increased Crime Rates

Drug-related crimes contribute to the economic strain on both personal finances and the national economy. The costs associated with law enforcement, incarceration, and rehabilitation further drain public resources.

Addiction is a primary component of many crimes, according to the American Addiction Centers. An article on the ADC website reports that, “research indicates that up to 75% of individuals who begin treatment for a SUD report having engaged in physical assault, mugging, using a weapon to attack another person, and other violent crimes.”

Impact on Small Businesses

Addiction’s ripple effects extend to small businesses, which form the backbone of the U.S. economy. Employees struggling with addiction can lead to higher turnover rates, increased absenteeism, and reduced productivity for these businesses.

About nine percent of employees have an alcohol or drug use disorder, according to the National Safety Council. That amounts to 13.6 people. In addition, almost the same number, 13.4 million workers, are in recovery or have recovered from addiction.

Reduced Economic Output

The U. S. Department of Health and Human Services estimates that alcohol misuse costs the economy $249 billion. Further, illicit drug use adds another $193 billion to the tab.

Ultimately, the culmination of these factors results in a decreased economic output for the entire nation. Lost productivity, increased healthcare costs, strain on social services, and reduced consumer spending collectively contribute to an economic drag.

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Max Erkiletian

Max K. Erkiletian is a seasoned journalist and analytical reporter with nearly 40 years of experience. He has been nominated for several honors and was part of a team that won the Missouri Press Association’s Community Service Award.

His experience has included covering a wide range of topics, from crime reporting to politics and music. His interview subjects have included U.S. Senators, such as Tom Eagleton; economists, such as Arthur Laffer; former Fed Chair Paul Volcker; and musicians, such as Muddy Waters and B. B. King.

Today, he focuses on personal finance, consumer protection, economic shifts, and investment trends. His reporting aims to make complex issues understood and show how events impact consumers’ wallets.