The national price tag for substance abuse is about $500 billion. Between lost productivity, criminal…
The Financial Costs of Addiction
Addiction is notable for the toll it takes on an individual’s health and relationships. However, while these losses feature prominently in the costs of addiction, they only tell part of the story. Typically, addicts and their families also pay a heavy financial cost, both in terms of the money spent on the substance or activity in question and in terms of lost wages and job opportunities. Society also pays a significant cost due to factors such as lost productivity, health care expenses for indigent addicts, drug treatment programs, drug-related law enforcement efforts, and the housing of drug offenders in jails and prisons.
An alcoholic who drinks two cheap six-packs of beer each day spends about $9 to support his/her addiction. This same rate of consumption produces costs of roughly $36 per month and $432 per year. A nicotine addict who smokes only a pack a day can spend roughly $2,160 a year on cigarettes; people with heavy nicotine habits can bear costs that reach or exceed about $6,000 per year. While it’s more difficult to accurately estimate the cost of addiction to illegal drugs, conservative estimates indicate that a marijuana user can spend close to $1,000 a year, while a methamphetamine addict can spend $4,000 or more each year. People addicted to cocaine or heroin can easily spend $10,000 or more per year to support their habits. A person with a gambling addiction can easily financially ruin him/herself and any unfortunate family members.
Loss of Income and Productivity
People addicted to drugs or alcohol frequently experience problems at work that endanger their jobs or simply reduce their ability to act as valuable employees. Substance addicts and abusers also miss work relatively frequently and miss out on promotions that could improve their financial status. In addition, addicts and abusers typically have a lower educational standing than other members of the workforce from similar social backgrounds. Over a lifetime, the income lost from dropping out of school or failing to gain an advanced education can add up to literally tens or hundreds of thousands of dollars- sometimes even more in extreme cases.
Bills and Insurance Costs
Over time, long-term addicts inevitably develop health problems that can cost them significant amounts of money in the form of either direct expenditures or increased health insurance premiums. These same health problems also typically cause a significant loss of work-related income. On average, addicts and alcoholics are subject to 1.4 DUI stops over the course of their lifetimes and thus see increases in their car insurance premiums that can rise as high as 300 percent. Some people bear even heavier burdens when insurance companies cancel their policies.
Periodically, the National Institute on Drug Abuse (NIDA) and the Surgeon General’s office release reports that attempt to estimate the overall social costs of substance abuse and addiction. The latest of these reports, which dates back to 2004, estimates that illegal drug use costs society $181 billion each year in combined expenditures for health care, enforcement of drug laws, crimes committed by addicts and abusers, lost productivity, and jail and prison facilities for drug offenders. According to this same report, alcohol abuse and addiction have a social cost of roughly $185 billion each year, while tobacco addiction has a social cost of roughly $193 billion a year. When combined, the costs for these three categories of use equal about $559 billion per year.
Disproportionate Impact on the Poor
Addiction has a disproportionately heavy cost in low-income households, where budgets rarely allow for any form of lost income. At the poverty level, Forbes explains, even a one-pack-a-day cigarette habit can consume fully 10 percent of a family’s entire monthly budget. Users of hardcore drugs can easily spend more than half of their available income supporting their habits. Addiction can also help trap future generations of a family in a cycle of poverty. For instance, many children of substance abusers or addicts strive to emulate their parents’ behavior and either develop addictive relationships to the same substances or develop similar relationships to a different substance. In poor families, this adoption of parents’ behavior can also include emulation of inadequate money management skills, lack of an adequate education, and lack of access to the opportunities that typically come with higher income and a higher educational status.