Is Pre-Employment Drug Testing the New Barometer for Job Growth?

I’m always fascinated when people come up with innovative (some might say odd) indicators of a change in economic activity.

I can almost hear many of you out there — saying “Huh? What the hell is he talking about?” — but hang on for a moment and I’ll explain.

What I’m talking about, and what catches my eye, are simple, mundane activities that someone else takes a look at and says, “hey, this indicates future job growth and a positive economic change.”

Still don’t know what I’m talking about? Well, it’s got to do with the drug testing you make your serious job candidates go through. Who knew that now it wasn’t just a drug test but some huge barometer of job growth and an upswing in the economy?

Take a look at what I am talking about, from the Minneapolis Star-Tribune:

Searching for signs of an improving economy, analysts have scratched their heads over statistics and surveyed the hearts of consumers. Now comes another hopeful indicator — the bladders of potential hires.

Pre-employment drug tests are rising significantly. Drug test companies in the Minneapolis area say numbers of such exams for new hires have doubled, or in one case, increased more than 500 percent, in the last year.

Some experts believe this could mean more companies in the Twin Cities area are hiring workers, at least temporarily. “I think it’s a good sign,” Scott Anderson, a senior economist at Wells Fargo Securities, said this week. “Certainly the direction is what we would like to see at this stage of recovery.”

So far, the theory seems to be holding true. Although the state’s unemployment remained flat at 6.8 percent, the private sector gained nearly 19,000 jobs in July — the most since April 2005.

And lest you think this is just some economic quirk that’s happening in the Twin Cities, the newspaper goes on to say that, “The trend is not just limited to Minnesota. The Drug and Alcohol Testing Industry Association said its members have noted improvements in the numbers of pre-employment drug test screenings.”

Plus, it seems that drug tests are a sign of job growth, at least in Minnesota, because state law “drug tests cannot be requested of an applicant until a contingent job offer is given, said Marshall Tanick, a Twin Cities employment lawyer.”

I asked Nick Fishman, Executive Vice President and Chief Marketing Officer for EmployeeScreenIQ (and a guy who knows a lot about pre-employment testing) what he thought of this new barometer of job growth.

His response? “I don’t know how much you should really read into this,” he said. We’ve been screening a lot of candidates, but unemployment is where unemployment is…maybe it’s just a sign that we’re all using a lot more screening tools than we ever have before.”

Nick added that there does seem to be a big increase right now in people being hired for contract positions (instead of as regular employees), and perhaps that might be a contributing factor for the rise in pre-employment drug tests.

So after all of that said, is this a barometer of the economy and new job growth, or, just a sign of times that we shouldn’t read too much into?

Myself, I hope for the former but I’m also resigned to the fact that it is probably the latter. As much as I wish that pre-employment drug tests were some new and exciting way to forecast economic trends, I have to side with Minnesota state economist Tom Stinson who told the Star-Tribune, “While it may be indicating a little strengthening of the economy, I don’t think it’s a real solid indicator.”

Yes, sometimes a cigar is just a cigar, as Sigmund Freud so famously noted, and sometimes, a drug test is just a drug test, too.