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Housing stands in an area of the South Bronx experiencing an epidemic in drug use, especially heroin and other opioid based drugs. Photo: Spencer Platt/Getty Images

The opioid crisis tearing through communities across America has kept working-age men and women out of the labor force at a rate that is hurting the national economy, according to Federal Reserve Chairman Jerome Powell.

Why it matters: Labor force participation is used to calculate the unemployment rate released by the federal government each month, with people not considered to be in the workforce — including those incapacitated by addiction — left out of the overall percentage. Per CNBC, this could present "a potentially skewed picture of the employment situation."

By the numbers: Appearing in front of the Senate Banking Committee Tuesday, Chairman Powell cited a 2017 study by Princeton economist Alan Krueger, which suggested the increase in opioid prescriptions from 1999 to 2015 could partially account for the observable decline in labor participation during that same period.

  • Between early 2000 and 2015, the LFP rate dropped from 67.3% to a 40-year low of 62.4%.
  • 40% of prime age men (25 to 54 years old) not in the labor force report taking pain medication on a daily basis. Two-thirds of that group report taking prescription pain medication on a daily basis.
  • Krueger attributes about half of the decline in LFP to shifting demographics, meaning the population of working age Americans is simply getting older.
  • But his analysis also suggests that the increase in opioid prescriptions could account for 20% of the observed decline in LFP for men and 25% for women.

The bottom line: In the last 15 years, the LFP rate fell more in counties where more opioids were prescribed.

Go deeper

Trump grants flurry of last-minute pardons

Photo: Jabin Botsford/The Washington Post via Getty

President Trump issued 73 pardons and commuted the sentences of 70 individuals early Wednesday, 11 hours from leaving office.

Why it matters: It's a last-minute gift to some of the president's loyalists and an evident use of executive power with only hours left of his presidency. Axios reported in December that Trump planned to grant pardons to "every person who ever talked to me."

2 hours ago - Politics & Policy

Trump revokes ethics order barring former aides from lobbying

Photo: Spencer Platt via Getty

Shortly after pardoning members of Congress and lobbyists convicted on corruption charges, President Trump revoked an executive order barring former officials from lobbying for five years after leaving his administration.

Why it matters: The order, which was signed eight days after he took office, was an attempt to fulfill his campaign promise to "drain the swamp."

  • But with less than 12 hours left in office, Trump has now removed those limitations on his own aides.

Trump pardons former GOP fundraiser Elliott Broidy

President Trump has pardoned Elliott Broidy, a former top Republican fundraiser who pleaded guilty late last year to conspiring to violate foreign lobbying laws as part of a campaign to sway the administration on behalf of Chinese and Malaysian interests.

Why it matters: Broidy was a deputy finance chair for the Republican National Committee early in Trump’s presidency, and attempted to leverage his influence in the Trump administration on behalf of his clients. The president's decision to pardon Broidy represents one last favor for a prominent political ally.