Elon Musk might not be a fan of marijuana, but its legalization is helping some US workers find jobs and earn higher wages.
That's according to a new working paper published by the National Bureau of Economic Research, which claims to be the first study to explore the impact of recreational marijuana legalization on the employment and wages of American workers.
While 68% of the public supports legalization, the authors noted that there is disagreement about the impact it could have on workers' productivity and well being. The paper begins with two quotes, which serve to illustrate — perhaps somewhat in jest — the two sides of the argument.
Elon Musk in 2018: "I'm not a regular smoker of weed...I don't
find that it is very good for productivity."
Seth Rogen in 2011: "I smoke a lot of weed when I write."
The analysis, which was written by four economics professors
from San Diego State University and Bentley University, found "little
support" for the idea that legalization has reduced "employment or wages of
working-age individuals."
Instead, the authors found some
evidence of "modest increases in employment or wages" for individuals over
age 30, younger racial and ethnic minorities, and those working in the
agriculture industry.
The authors speculated the boost in the agriculture sector is
tied to the introduction of the cannabis industry. Some older workers and
minorities, meanwhile, they said, may have substituted opioids — which can
"generate more harm to employment" — for marijuana, and experienced better
outcomes in part due to this shift.
"These results are
consistent with the opening of a new licit industry for marijuana and —
especially for older individuals — a substitution away from harder
substances such as opioids," they said.
Over 158 million
Americans in 21 states and D.C. live in a state where marijuana has been
legalized. The state-licensed cannabis industry generated over 100,000 US
jobs in 2021, employed nearly half a million workers as of 2022, and appears
poised for growth in the years to come. US cannabis sales are projected to
grow from $25 billion in 2021 to $40 billion in 2026, according to a report
last year from the cannabis data company BDSA.
Legalization has allowed some people with prior marijuana
convictions to have their records wiped clean, making it easier for them to
find employment. And in New York, for instance, where licenses to open
cannabis dispensaries are still being doled out, the goal is for half of
them to go to social equity applicants, which include minorities, women, and
those from communities impacted by the drug war.
While the
industry is still in its early stages, the NBER study suggests it's produced
some positive outcomes so far for American workers. In the past, the authors
said, critics have argued marijuana use could lead to diminished cognition,
de-motivation, lethargy, poorer physical and psychological health, the use
of harder drugs, and lower educational attainment.
Proponents, however, have argued that along with creating jobs,
the cannabis industry could help some people reduce opioid use, drink less
alcohol, ease physical ailments, manage stress, and improve psychological
health, all of which could help workers find better outcomes. The paper also
notes that young Black and Hispanic men in particular have found it harder
to find jobs due to criminal records for marijuana possession, a challenge
legalization has helped alleviate to some degree.
Given marijuana legalization is a relatively new development,
the authors said it will take time to decipher any long-run impacts on labor
market performance, despite the positive early indicators from their
research.
