Making Sense: Are Drug Tests A Labor Market Problem?Author: Thomas ByrneLast Updated: August 3, 2017 Today’s ADP Employment Change report indicates that not much has changed within the job market. According to ADP data, the U.S. private sector added 178,000 net new jobs in July. This was lower than the Street consensus estimate of 190,000 and it was below the revised print of 191,000. However, the June read was revised higher from, an initial print of 158,000 to bring it closer to the June Nonfarm Payrolls print of 222,000.Details of the report were:Natural Resources and Mining: +3,000.Construction: +6,000Manufacturing: -4,000Trade Transport: +24,000Information: +8,000Financial Activities: +13,000Professional and Business Services: +65,000Education and Health: +43,000Leisure and Hospitality: +15,000Other Services: +5,000According to ADP, Medium-sized businesses led the way in hiring:Small businesses: 50,000Medium businesses: 83,000Large businesses: 45,000It appears as though the U.S. economy is entrenched in a high-100,000 jobs per month paradigm. Whether this is “good” or not depends on with whom you speak. I have read opinions, regarding how many jobs are necessary to keep up with U.S. population growth, which range from nearly 200,000 jobs per month to fewer than 100,000 jobs per month. The true figure is anyone’s guess. However, job growth does not appear to be such that it has tightened the labor market to the point that wage growth is surging. This may be due to technology which allows businesses to get by if they cannot find qualifiedworkers. “Qualified” can mean different things in different industries and for different occupations. For white-collar professionals, “qualified” can mean at least a bachelor’s degree. For manufacturing and low-wage service jobs, “qualified” can mean being able to pass a drug test. Bloomberg News reports that many businesses are having difficulty finding applicants who can pass a drug test.My wife is a health educator. She is aware of salaries in the health industry. What she has found is that health industry jobs which require four-year degrees and several years of experience are paying between $30,000 and $40,000 a year, on average, in our corner of Eastern Pennsylvania. Have a graduate degree and you might make $50,000 to $60,000, on average. This is not much higher than what these health industry jobs paid a decade ago, in nominal dollars. In real dollars, wages have barely risen. That businesses are reluctant to pay-up for “qualified” applicants tells me that the filling of many job openings is more of a want than a need. Technology and the reduced bargaining power of workers allows many businesses to do more with less.The other day, I set off on a day trip on one of my motorcycles. What jumped out at me was the number of “We’re Hiring” signs I saw. It seems that nearly every fast food restaurant is desperate for workers. Auto parts chains, such as Auto Zone and Advance Auto are also hiring. I suspect they are having difficulty finding workers who will work for minimum wage and can pass a drug test.