The cost of job loss (2023)

With the COVID-19 crisis creating economic turmoil unlike any seen since the Great Depression, public health officials and economists expect Americans to face continued job insecurity and stress, and psychological interventions will be critical to helping people cope the situation.

The mental health impacts of today's job losses are likely to be significant, given a wealth of research showing that unemployment is associated with negative outcomes such as anxiety, depression and loss of life satisfaction. Similarly, underemployment and job instability, two additional outcomes of the coronavirus pandemic, are creating distress for those not included in the unemployment numbers.

Many of these people will need psychological support. In fact, research suggests that a mental health-based approach is not only useful, but necessary: ​​job search programs that don't involve nurturing people's motivational and cognitive resources are simply not as effective as those that do, if they do. Psychologists can also inform politicians about the consequences of unemployment for physical and mental health.

"Losing a job and being unemployed for an extended period of time is psychological trauma and economic trauma, and the two are closely related," says Carl Van Horn, Ph.D., professor of public policy and expert on employment and unemployment policy. at Rutgers University. Psychological support can save lives, he says. Although psychologists can't solve the financial problem, "they can certainly help people see and deal with it."

Mental health risks

Unemployment research shows that losing a job, even without severe financial strain, is harmful to mental and often physical health. "Work gives us time structure, it gives us identity, it gives us purpose, and it also gives us social interactions with others," says Connie Wanberg, PhD, an industrial and organizational psychologist at the University of Minnesota. "When you lose all that, it creates a lot of difficulties for people."

Those most at risk of psychological problems after job loss are those for whom unemployment is an immediate threat to survival. People with fewer financial resources and those who experience greater financial pressure from unemployment are less satisfied with their lives, according to a meta-analysis led by Frances McKee-Ryan, PhD, professor of management at the University of Nevada, Reno (Journal of Applied Psychology, Flight. 90, No. 1, 2005).

"The bottom line is that people have to eat. They must have shelter. They need medical help,” says David Blustein, PhD, professor of counseling, educational, and developmental psychology at Boston College.

But job losses also have negative effects across the board. An influential meta-analysis conducted by Karsten Paul, PhD, and Klaus Moser, PhD, both in the Department of Organizational and Social Psychology at the Friedrich-Alexander University of Erlangen-Nuremberg in Germany, found that in 237 cross-sectional and 87 longitudinal studies , the unemployed they were more destitute; less satisfied with their lives, marriages, and families; and more likely to report mental health problems than employees (The magazine on professional conduct, Flight. 74, No. 3, 2009).

The analysis showed that the unemployment effect is likely causal: In longitudinal studies, unemployed people see improvements in mental health when they get a new job. Studies of factory closings where everyone loses their jobs at the same time also show that nearly all laid-off workers experience subsequent declines in mental health, proving that job losses are detrimental to mental health rather than people with poorer mental health being more affected . chances of becoming unemployed. The longer the period of unemployment, the worse off people are, with people out of work for six months or more experiencing the worst mental health outcomes. Countries with high wealth inequality and weak unemployment protection had worse mental health outcomes among the unemployed in the Paul and Moser meta-analysis, a factor that puts Americans at risk. Measured by the Gini coefficient, an economic measure of inequality, the United States has the highest income inequality of any G-7 country, and its unemployment protection is relatively weak. Many laid-off workers lose their job-based health insurance and have access to less generous unemployment benefits than workers in other OECD (Organization for Economic Co-operation and Development) countries.

Unfortunately for those who have lost their jobs during the COVID-19 crisis, there seems to be little solace in the solidarity. Wanberg, McKee-Ryan and their colleagues found no evidence that losing a job during a job crisis had fewer mental health consequences. Losing a job because of a massive social impact is a two-sided coin, says Wanberg. “Right now there is so much unemployment that there is little more camaraderie or support. But at the same time, mental health is further affected because people do not have an easy transition to finding a new job.'

A qualitative study by Blustein and colleagues found further evidence of workers' complex emotions when they lose their jobs. People who blamed their own shortcomings for their job loss felt worse about themselves but remained optimistic about learning new skills and finding a new, better job. Those who saw the fingerprints of systemic problems, such as discrimination or macroeconomic forces, in their job losses saw themselves less negatively but also felt more frustrated about their ability to change their circumstances (The magazine on professional conduct, Flight. 82, No. 3, 2013).

In both therapy and advocacy settings, psychologists can help destigmatize unemployment and counter self-blame. A survey of white-collar workers in the United States and Tel Aviv found that unemployed professionals in the United States tended to blame themselves for losing their jobs, while those in Israel blamed the system in general (Sharone, O.,social forces, Flight. 91, No. 4, 2013).

A tendency toward less generous self-evaluations after unemployment is associated with poorer mental health. Psychologists also study the effects of underemployment on mental health. Evidence so far suggests that job insecurity and instability also promote poor mental health, especially if a person's wages are low or they are forced into temporary positions, says Blake Allan, PhD, associate professor of counseling psychology at the University of Houston. New research on long-term job insecurity using data collected in Australia shows that when insecurity persists for four years or more, people become less emotionally stable, less likeable and less self-aware (Journal of Applied Psychology, first online publication, 2020). These personality traits are important for both job performance and well-being, says Chia-Huei Wu, PhD, chair of organizational psychology at the University of Leeds Business School in England, who co-authored the research.

"We argue that chronic job insecurity can have such effects on personality change because it reinforces a negative loop that reinforces itself over time," says Wu. For example, he says, anxiety related to job insecurity can lead people to pay more attention to the uncertain aspects of their work and life, which in turn often distracts them from tasks that could help reduce anxiety, job insecurity, so that anxiety persists .

The way a person copes with job loss can be determined by the protective factors in their life. In their 2005 review, McKee-Ryan, Wanberg, and colleagues found that unemployed workers who had social support, the ability to maintain a daily routine, who saw work as less central to their identity, and who had high hopes for reemployment responded better. loss of job. Reframing job losses also appears to benefit people: Those who labeled themselves "retired" rather than "unemployed" had higher life satisfaction, according to a study by economist Clemens Hetschko, PhD, and colleagues (The Economic Journal, Flight. 124, No. 575, 2014).

"The interpretation is that the jump in life satisfaction is almost entirely due to stigma, identity and changing the way people treat you," Allan explains.

Populations at risk now

The COVID-19 crisis is hitting some categories of workers more than others, researchers say. "You start to see who is unemployed, and it's people in the service industry, and it's disproportionately women and people of color," says Nadya Fouad, PhD, a counseling psychologist and professor of educational psychology at the University of Wisconsin-Milwaukee. . .

Women's careers may also suffer if schools and childcare centers do not return full-time, she says, as housework and childcare fall disproportionately on women. In addition, many poor and rural Americans lack reliable broadband Internet access, Van Horn says, effectively eliminating their chances of securing telecommuting.

Research on unemployment suggests that job loss can be particularly damaging to the health and well-being of older workers. Workers in their 50s and 60s who lose their jobs during a recession show increases in their mortality, possibly because the loss of health insurance is more dangerous for them than for younger workers; however, losing a job after becoming eligible for Medicare benefits does not affect mortality(Coile, CC, et al.,American Economic Journal: Economic Policy, Flight. 6, No. 3, 2014).

The virus could also hurt the careers of younger workers, says Saba Rasheed Ali, PhD, an occupational psychologist at the University of Iowa who does research with many young people whose families work in the meatpacking industry. These young people often work in the service industry, and many of those jobs have disappeared.

"These jobs may not be available to teenagers and may certainly be quite dangerous for them right now. So how does that affect their professional development and CV? asks Ali. Meanwhile, schools may not be able to provide their usual levels of counseling and professional development, he says.

And without more job training, teenagers and others may not get the skills they need to get new jobs. A meta-analytic review of job search interventions found that the most successful programs taught job seekers how to network, find suitable openings, and apply for them. The best programs also taught job seekers how to psychologically handle rejection and how to stay motivated day after day (Psychological Newsletter, Flight. 140, No. 4, 2014).

"Job search interventions promoted employment effectively only when both skill development and motivation enhancement were emphasized in the training program," says Songqi Liu, PhD, an industrial and organizational psychologist at Georgia State University, co-author of the review.

Unfortunately, few programs do this well, says Liu. One that works is the JOBS program, developed by University of Michigan psychologists Richard Price, PhD, and Amiram Vinokur, PhD, which is delivered to small groups of job seekers by trained facilitators. The program focuses on building participants' confidence and uses discussion, role play and positive feedback to train job search skills. The program has proven to be effective internationally with repeated studies in China, Finland and Ireland, among other nations (“The JOBS programme: impact on jobseeker motivation, re-employment and mental health”, Oxford Handbooks Online, 2014).

The program has also been shown to particularly improve reemployment and mental health in participants at high risk for mental health problems (Vinokur, A.D., & Price, R.H., in Vuori, J., et al. (eds.), “Sustainable working life: coordinating perspectives on health, safety and well-being”, Springer, Dordrecht, 2015).

In the current pandemic, job hunting is challenging for two reasons. One is that the general economic downturn has reduced the number of new job openings, which means that candidates face stiff competition for the job. A psychologically-informed approach cannot help with this problem, but an understanding of mental health, motivation and human behavior can solve the second challenge: tailoring professional interventions in a socially distanced way.

Although there are many online job search interventions, few are well-researched, Liu says. An exception is the University of MinnesotaIntervention Building Relations and Improving Opportunities (BRIO), which teaches networking skills through a series of videos and online modules. In a field experiment with 491 unemployed people who participated in the program, Wanberg, Liu, and colleagues found that the intervention improved participants' ability to network and their sense of self-efficacy around networking compared to a control group that did not receive the intervention (Personnel psychology, first online publication, 2020). BRIO also helped participants translate their networking efforts into tangible benefits, leading to higher job quality as measured by improvements in position and income.

Psychologists working to understand unemployment are also mobilizing to respond to the unique aspects of the pandemic. Blustein and his colleagues are conducting a qualitative study of work and insecurity to learn more about people's experiences as the pandemic progresses, while collaborating with a network of psychologists, economists and employment counselors to develop interventions to protect against the effects of work on mental health. losses during this crisis. These would include traditional mental health interventions as well as career-focused interventions, Blustein says. It also encourages psychologists to recognize the uncertainty surrounding the pandemic and resulting economic crisis as an existential experience of loss (Journal for Humanistic Psychology, first online publication, 2020). Psychologists can help by advocating for policies that have been shown to protect the mental health of the unemployed, including basic income guarantees and policies to provide safe housing and access to health care, he says.

"We don't know what's going to happen in this COVID crisis, whereas in a recession you tend to know that we're going to get out of it eventually," Blustein says. "It is a place where psychologists must be involved in clinical work and in public policy."

It is also important to see the current economic crisis in the context of working life before the pandemic, says Allan. Even before the coronavirus, work in the U.S. was still more precarious, he says, with more workers working in contract or gig positions, often with few protections or benefits. These workers are often the ones who now face the most dangerous and unsafe working conditions or risk losing their jobs altogether.

"Psychologists must be at the table when we make political decisions, because we have a lot to contribute to those discussions," says Allan. “We have the data and understanding of the systemic issues, but we also have the connection to the voices of the people who experience this through our clinical work and qualitative studies. We know how to change attitudes and promote more accurate narratives, and we need to do more of that."

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APA Division 17 (Society for Counseling Psychology), 2020

The importance of work in a time of uncertainty: the eroding work experience in the United States
Blustein, D.L., Oxford Scholarship Online, 2019

Interdisciplinary research priorities for the COVID-19 pandemic: a call to action for mental health science
Holmes, E.A., et al.,Lancet Psychiatry, 2020

Interventions to reduce the impact of unemployment and economic hardship on the mental health of the general population: a systematic review
Moore, TH, et al.,Psychological medicine, 2017