How Society Pays

Impact on the economy

The Neurochemistry of Addiction
Addiction: A Genetic Disease
Female Issues
Treatment for Addiction
Relapse: Sex, Love, and Relationships
Addiction and the Family

Impact on Society

The economy is greatly impacted by the drug and alcohol epidemic:

  • Alcohol and drugs account for 52 percent of all traffic fatalities, according to the Hazleden Foundation.
  • Due to the rise in insurance premiums and lower productivity, drug and alcohol abuse costs corporations 93 billion dollars a year.
  • Addictions also significantly impact on the tax burden, due to costs for treatment incarceration and social welfare to care for addicted individuals and their families.

Our educational and school system is also heavily impacted by the problem of drug and alcohol abuse:

  • One in four high school students has a drinking problem.
  • One third of all school children in the United States have used an illicit drug.
  • The majority of the over half a million violent crimes occurring in American schools in the past decade were alcohol and drug related.

The abuse of alcohol and drugs in the workplace and the effects of chemical addiction on the workplace have emerged as the major health concern, eclipsing AIDS as the primary workplace concern of the decade.

  • The cost in industry is estimated at over one hundred billion dollars a year. Three quarters of this cost is due to lost employment and reduced productivity and about 25 percent is due to medical costs and the cost of treatment for addiction.
  • According to the National Institute of Drug Abuse, more than two thirds of individuals who report using or abusing drugs and alcohol are employed...50 percent full time and about half of them part time.
  • More than 23 million adults in America have reported using illicit drugs within the past year.
  • Experts believe that between 10 and 23 percent of all workers use drugs on the job and that these regular drug abusers frequently come to work impaired.
  • One survey done by the cocaine hotline reported that 75 percent of the callers to the hotline had used drugs on the job. Nearly 70 percent of those who called for help stated they worked regularly under the influence of cocaine.

The table below shows expenditures per year due to drug and alcohol abuse alone.

Source of Expenditure

Total Expense per year ($ Billions)

% Due to Drugs & Alcohol

Expense Due to Drugs & Alcohol ($ Billions)











Loss of 1% of workforce due to imprisonment




Treatment Cost



Auto Insurance
Losses Paid






Source: Extrapolated from 1987 figures for The National Underwriter Co., Cincinnati. Found in Statistical Abstract.
* This number includes the effects of smoking on health. It is estimated that drug and alcohol abuse costs the nation $562 billion per year or almost 10 percent of the gross domestic product.

In the early 1990's, the national health bill exceeded $900 billion.

A survey by the U.S. Department of Health and Human Services in 1990 found that a small portion of the population, which for the most part consisted of users of tobacco and drugs and alcohol abusers, accounts for 40 to 70 percent of all premature deaths, a third of all cases of acute disability and two thirds of all cases of chronic disability. The same study showed that by simply removing smoking and drinking, health utilization could be reduced by 25 percent.

Other studies have shown that 10 percent of the population accounts for 75 percent of the nation's health care costs and the high cost people tend to be smokers and alcohol abusers.

On the basis of these studies, it is conservatively estimated that smoking, alcohol and drug use account for 33 percent of the medical care expenditures or $300 billion per year.

The cost of crime in the United States in the early 1990's was between $200 billion and $800 billion in federal, state and local government expenditures for the criminal justice system, police and corrections.

Another $120 billion was reported for victim expenses for medical and lost property. Drug and alcohol abuse accounts for half of all crimes and induces a financial burden to society of over a $100 billion per year for their effects on crime alone.

An additional expenditure for drug and alcohol related crimes is for lost productivity of those who are in prison. One study shows that 1.2 million inmates are in prison, which is 1 percent of the work force. With half of crime attributed to drug and alcohol abuse, then .5 percent of the workforce translates into a 1.25 percent loss in the gross domestic product, which is $70 billion.

With 15 percent of the population suffering from drug and alcohol addiction, assuming a mean treatment expense of $10,000 per person, this accounts for another $38 billion.

Alcohol and drugs account for about 50 percent of motor vehicle accidents, accounting for another $54 billion.

The cost of drug and alcohol abuse/dependence is indeed staggering. Investing in treatment is "good business." The potential economic savings (in addition to all the human benefits) is also staggering.

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