Economic Impact of Alcohol Abuse in the US

How Alcoholism and Binge Drinking Hits All of Our Wallets

Man Counting Cash in Wallet
Tetra Images/Getty Images

Alcohol abuse and dependence claim an estimated 100,000 lives each year in the United States, but the cost to society doesn't stop there. Heavy drinking takes its toll on society as a whole, costing industry, the government, and the U.S. taxpayer an estimated at $249 billion each year, according to a report from the Atlanta-based Centers for Disease Control and Prevention (CDC).

All told the societal costs of alcohol misuse averages to around $807 per citizen or roughly $2.05 per drink.

Government and Taxpayers Bear the Burden

The CDC report, published in 2016, concluded that two of every five dollars of these costs (or an estimated $100.7 billion) were picked up federal and state governments. Three-quarters (or $191 billion) were directly attributed to with binge drinking.

Underage drinking further represented $24.3 billion of these costs while drinking during pregnancy accounted for an additional $5.5 billion.

According to the researchers, the costs were mainly associated with losses in workplace productivity followed by direct and indirect costs to the healthcare system. The numbers broke down as follows:

  • 72 percent of the costs were attributed to workplace absenteeism, worker's compensation, Social Security disability, and unemployment expenses.
  • 11 percent were related to healthcare expenses such as emergency care, hospitalization, alcohol treatment, alcohol-associated pediatric care, and the treatment of cirrhosis and liver cancer.
  • 10 percent were attributed to criminal justice expenses.
  • Five percent were directly related to motor vehicle crashes, including insurance costs.

Alcohol Costs by State

Breaking down the regional impact of alcohol abuse, the median cost per state was roughly $3.5 billion. Binge drinking was responsible for more than 70 percent of these costs, 40 percent of which was covered by the federal government.

The costs to states ranged from a low of $488 million in North Dakota to a high of $35 billion in California. Washington, D.C. had the highest per capita costs overall at $1,526, nearly twice the national average.

In terms of per-drink costs, the highest numbers were seen in New Mexico at $2.77, a figure that was 35 percent higher than the national average.

Amounts Are Believed Underestimated

The CDC believes that the $249 billion in annual costs is largely underestimated, in part because many injuries and alcohol-related health problems remain either reported or undiagnosed. Moreover, many of the workplace losses—such as those related to absenteeism—cannot be measured directly, making it difficult to place a dollar value on such losses.

To complicate matters even further, the $249 billion in alcohol-related expenses do not include $193 billion lost to illicit drug use, a figure described in the Surgeon General's 2016 Report on Alcohol, Drugs, and Health.

Strategies for Reducing Binge Drinking

The quickest way to reduce these costs, says the CDC, would be to reduce binge drinking (defined as four or more drink per occasion for women or five or more for men).

To this end, the researchers suggested using several evidence-based strategies to reduce the impact of drinking on society:

  • Increasing the price of alcohol to discourage use, particularly among the young
  • Regulating the number and location of sites where alcohol is sold
  • Reducing the days and hours of alcohol sales
  • Holding alcohol retailers liable for injuries or damages caused by intoxicated or underage customers
  • Avoiding the commercialization of state-controlled alcohol sales

While many of the suggestions would meet stiff opposition from government and industry, they do highlight that cost and access remain major drivers of the alcohol epidemic in the U.S. Unless measures are taken to actively discourage drinking, says the CDC, it will be society at large that will end up paying.

View Article Sources
  • Centers for Disease Control and Prevention. "Excessive Drinking Is Draining the U.S. Economy." Atlanta, Georgia; January 2016.
  • Sacks, J.; Gonzales, K.; Bouchery, E. et al. "2010 National and State Costs of Excessive Alcohol Consumption." Amer J Prevent Med. 2015; 49(5):e73-e79. DOI: 10.1016/j.amepre.2015.05.031.
  • Office of the Surgeon General: Department of Health and Human Services. (2016) "Facing Addiction in America: The Surgeon General's Report on Alcohol, Drugs, and Health, Executive Summary." Washington, DC: HHS.