A U.S. economy steaming ahead and jobs, jobs, jobs. That was U.S. President Donald Trump’s campaign pledge to America’s “forgotten men and women.”
But many economists doubt the president’s recipe for economic growth will turn out as advertised. Even if it did, it probably wouldn’t be enough to change the fortunes of many of the disaffected Americans who voted for him, according to a new Goldman Sachs report.
Creating more jobs simply isn’t enough, researchers at the investment bank warned.
Blame opioids abuse, poor health and high incarceration rates, says Goldman Sachs
Many of America’s young men who have given up on looking for a job are grappling with addiction, sickness, and criminal records, Goldman Sachs economists noted. And on all three fronts, the U.S. stands out compared to most other rich countries.
“Higher rates of painkiller use and middle-age mortality suggest that more severe health and drug-related problems have contributed to lower U.S. participation,” according to the report.
The authors also noted “the U.S. incarcerates a much larger share of its population,” which may lead to high rates of Americans giving up on the job search due to the “challenges in finding employment faced by people with criminal records.”
Nearly half of prime-age American men who say they’re not looking for a job take painkillers on a daily basis, according to a recent study by Princeton University and the U.S.’s National Bureau of Economic Research. While Canada is struggling with its own domestic opioid crisis, Goldman Sachs pointed out opioid use in the U.S. is far higher than in Europe:
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The above-mentioned Princeton study also found that 20 per cent of American men outside the labour force say they suffer from bad health. While the mortality rate for middle-aged men continues to decline in most rich countries, in the U.S. it has flatlined since 2000. One study showed the U.S. mortality rate has actually increased slightly for middle-aged white men, even though it has declined for African-American and Hispanic men.
Of course, there may be a bit of a chicken-and-egg problem here, noted Goldman Sachs, as high rates of joblessness could lead to drug abuse, poor health and premature deaths, rather than the other way around. However, the data suggest that these factors are at least part of the explanation for why so many younger Americans say they don’t even want a job, the authors of the report argued.
It will take far more than a hot labour market and a fast-growing economy to help America’s most vulnerable workers, the report suggested. The U.S. needs “major policy interventions” in health and education, as well as better government support and retraining for workers displaced by technological change and international trade.