Experts warn of mental health fallout from mass US unemployment

The US faces a catastrophic rise in unemployment following the forced shutdown of businesses across the country to stop the spread of Covid-19 – and experts are warning it could trigger a severe mental health crisis.

In just two weeks, more than 9.95 million Americans have applied for unemployment – smashing all records. Economists are predicting the unemployment rate could rise as high as 30% as the pandemic sweeps across the country.

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Those hardest hit are likely to be the poorest, including many people of color, and those who benefited least from the last economic boom.

“With a 30% national unemployment rate, the impact will be devastating for everyone. But it will be particularly crushing for black Americans,” said William Darity, a professor of economics at Duke University and co-author of a study that found black Americans with no history of mental health diagnoses were more likely to have depression, anxiety or post-traumatic stress disorder during the 2007-09 Great Recession.

To mitigate the effects of the massive wave of unemployment, Congress has passed a $2.2tn stimulus package to help everyday Americans. The bill includes a payment of up to $1,200 to most taxpayers and $250bn to buffer unemployment insurance – an additional $600 to those who qualify for unemployment for up to 12 weeks.

But beyond the dollar signs, economists are worried about the long-term effects that being unemployed will have on Americans’ mental health – a problem that will further highlight the cracks in the country’s safety net and healthcare system.

It may seem cliche but work is not all about the money, and research proves it. “People want to work. They want to do meaningful things,” said Art Goldsmith, a professor of economics at Washington and Lee University who has researched the psychological effects of unemployment.

Although Goldsmith noted there is evidence that people experience a brief period of optimism when they are first let go from their jobs – they find they have more time to do other tasks, like cleaning out a garage – dangerous feelings of pessimism can set in after four to five weeks of unemployment.

“As the weeks go on, and we see the economy struggling, I think there will be more pessimism. I worry the emotional footprint of this experience can be quite large,” Goldsmith said.

A $1,200 check from the government and stronger unemployment insurance benefits will help Americans in the short term to pay their bills and other essentials but it cannot replace the value of having a job.

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“People who have meaning and purpose in their work have much, much higher levels of wellbeing than other people,” said Carol Graham, a senior fellow at the Brookings Institution and a professor at the University of Maryland. “People will trade off money for doing work they care about and doing work where they have respect and autonomy.”

The effects of unemployment on mental health are long-lasting. An Association for Psychological Science study published in September 2019 found that those who experienced financial, housing or job-related hardship during the Great Recession were more likely to have depression, anxiety or substance abuse as many as three years after the recession. A poll from Gallup conducted in 2014 found that unemployed Americans were more than twice as likely to self-report being treated for depression.

Economists are particularly concerned about people who were disenfranchised before the crisis started.

Black Americans historically have an unemployment rate that is twice as high as the overall rate, even in a healthy economy.

The overall median wealth for a black family is 10 times less than the median wealth of a white family. Discriminatory job processes have kept black Americans in low-paying jobs, many of which have seen layoffs with Covid-19. “From the standpoint of providing for oneself and one’s family, the situation is already significantly less secure for black Americans.”

While the mental health toll from unemployment is shared across the globe, America’s weak safety net and lack of affordable healthcare exacerbates the consequences for unemployed Americans.

Economists have shown that unemployment and low wages have literally fatal consequences for Americans. In 2015 Princeton economists Anne Case and Angus Deaton, winner of the 2015 Nobel prize for economics, found middle-aged white Americans were more likely to die in mid-life than their parents – reversing decades of steadily increasing life expectancy.

They coined the term “deaths of despair” and blamed the rise on suicide, drug overdose or alcohol-related liver disease.

Their research found geographic and class-related underpinnings to the rise: places that have a smaller fraction of working-age people in jobs are more likely to have higher rates of deaths of despair.

The people dying were overwhelmingly white working-age Americans without college degrees. That group of people were finding that their jobs were being valued less than previous generations by the American economy – they were working for lower wages, inflexible hours and fewer benefits. Many lost jobs to changing technology.

Exacerbating the problem has been easy access to addictive opioids and firearms (more than half of suicides in America are committed with a firearm). “We all but load the weapons of self-destruction for people in misery,” noted surgeon Atul Gawande in the New Yorker.

This economic and mental health crisis will only be deepened by the sudden rise in unemployment. And, in the meantime, many Americans face barriers to getting mental healthcare. While health insurance can offset the cost of therapy and access to a psychiatrist, Americans typically rely on an employer for health insurance and lose access if they are laid off. About 28 million Americans do not have health insurance at all.

Cities typically do not rely on a single firm to keep people employed. If a major company shuts down, people can typically find employment elsewhere. But with huge sectors of the service industry – restaurants, hair salons, hotels – shutting down amid the pandemic, the mental health toll of this recession is likely to cast a wide net.

“What’s going to happen to low-skilled, support sectors in the cities if this lasts really long? We’d have whole different population cohorts we haven’t seen before that may also suffer some severe mental health crises,” Graham said.

“I’m not saying we shouldn’t social-distance – we have no choice. But we really need to think about the mental health part of this crisis as much as the economic one.”

In the US, the National Suicide Prevention Lifeline is 1-800-273-8255. In the UK the Samaritans can be contacted on 116 123. In Australia, the crisis support service Lifeline is on 13 11 14. Other international suicide helplines can be found at

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