EMPLOYMENT DRUG TESTING: NEW JOB-GROWTH GAUGE?

The Number Of Pre-Employment Drug Screenings Is On The Rise. It May Signal
Businesses Are Set To Do More Hiring. Or Maybe Not.

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.

Local drug-testing companies attribute their growth to companies
hiring temporary and, in some cases, permanent workers, in areas such
as retail, light industrial, IT, warehouse and safety-sensitive positions.

For example, at Trust In Us, pre-employment drug tests increased 527
percent over last year, said owner Machelle Pearson. Trust In Us has
four Minnesota locations, in Anoka, Willow River, St. Paul and Duluth.

"I do believe that the economy is improving. We definitely don't get a
break in the action," Pearson said. "In the last eight years that I've
been doing this, we've seen some of the highest volume tests go
through our company (in the last 10 months)."

Meanwhile, at Twin Cities Occupational Health and Rehabilitation, such
tests have steadily been increasing since January, reaching record
highs in June and July, in the five years the business has been
administering such tests. The number of drug tests rose to 9,293
year-to-date through Aug. 17, said Jim Sebesta, vice president for
business development. During the same period last year, there were
4,260 drug tests, he said.

Employer 'conveyor belt'

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.

St. Paul-based Medtox Scientific Inc., seen as one of the leaders in
the U.S. drug testing market, said revenue from drugs-of-abuse testing
rose 5.6 percent to $10.2 million in its second quarter. Medtox said
the increase was in part because of gaining new clients. Although its
existing clients had a 9 percent decrease in drugs-of-abuse testing
sales in the second quarter, it was an improvement from a drop of 26.7
percent during the same period a year ago, Medtox said.

"We're still seeing companies being very cautious about hiring, but
the environment is better now than it was a year ago," said Jim
Schoonover, chief marketing officer.

Under Minnesota law, drug tests cannot be requested of an applicant
until a contingent job offer is given, said Marshall Tanick, a Twin
Cities employment lawyer.

The collection of the specimen, testing and use of a medical review
officer can cost about $30 per applicant, Schoonover said.

"It's the last phase of the employer conveyer belt," Tanick
said.

Still, others remain skeptical about whether urine tests can pinpoint
the country's economic health.

"While it may be indicating a little strengthening of the economy, I
don't think it's a real solid indicator," said Tom Stinson, state economist.