Long-Term Unemployment Can Tax Mental Health

Image by Getty Images via @daylifeEven in resilient people, six months' unemployment has psychological impact, research shows

October 19, 2011

WEDNESDAY, Oct. 19 (HealthDay News) -- Americans who were jobless for longer than 25 weeks in the past year were three times more likely than those who were continuously employed to suffer mental health issues for the first time, a new study finds.

Being jobless also has a greater psychological impact on people with more than a high school education than on those with less education, the researchers found.

The study involved people who had never had clinically defined emotional health issues in their life or who had their first bout of problems in the most recent year.

"In looking at this group of resilient individuals, we compared the psychological health of those who were fully employed with those who were exposed to short-term unemployment or less than 25 weeks of involuntary joblessness, and with people who were exposed to long-term unemployment over the past year," Arthur Goldsmith, an economics professor at Washington and Lee University, said in a university news release.

The findings were scheduled for presentation Wednesday at a Congressional briefing on the emotional impact of unemployment sponsored by the American Psychological Association.

"The reason we focus on this group is that if you're 55 years old, and you've never had a bout of poor emotional well-being that would be described clinically in that way, and have your first bout in the past year when you are exposed to unemployment, it's very unlikely that your poor mental health led to the unemployment rather than your unemployment leading to the poor mental health. Thus, we are able to address the issue of causality that has plagued prior studies of the link between unemployment and mental health," Goldsmith explained.

He and his colleagues found that the risk of first-time mental health issues was about the same for people who were fully employed and those who experienced short-term unemployment.

"On the other hand, we found that people exposed to long-term unemployment were three times as likely as employed people over the past year to be exposed to their first bout of psychological distress in a clinically defined way," Goldsmith said.

Depression and general anxiety are the two primary causes of poor mental health related to long-term unemployment, the study found.

"When people are exposed to long-term unemployment, they obviously feel that they've lost control of their capacity to earn a living and take care of their families," Goldsmith said. "They worry about their futures."

The study also found that the psychological impact of unemployment tends to be greater among people in minority groups and those with higher levels of education.

For a person in a minority group, unemployment likely heightens their concerns about their ability to do well due to a history of job discrimination because of race and ethnicity.

"People with a lot of education tend to believe that they have control of events in their lives and are self-blamers. That is really damaging to emotional well-being," Goldsmith explained.

The research should be considered preliminary because it has not yet been published in a peer-reviewed medical journal.

More information
The Canadian Mental Health Association offers tips for coping with unemployment.
Copyright © 2011 HealthDay. All rights reserved.


Taken from USNews.com, Health News; source article is below:
Long-Term Unemployment Can Tax Mental Health

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Japan manufacturers to slow production on weak demand

Japan's manufacturers plan to limit production increases this month and in July, signalling that the economy may be slow to recover from its worst post-war slump.

Gains in output will slow to 3.1 per cent in June from May and 0.9 per cent next month, a Trade Ministry survey released yesterday showed.

Production climbed 5.9 per cent in April and May, the fastest pace in 56 years, the report said.

Industrial production is showing signs of "upward movement", said the ministry. Strong gains among companies making transport equipment, electronic parts and steel products contributed to the improvement in output.

However, the Nikkei 225 Stock Average fell 1 per cent yesterday, due to concerns that demand for Japanese cars and electronics would be too weak to sustain a recovery amid swelling unemployment at home and abroad. Even after boosting output to rebuild depleted inventories, Japanese manufacturers are making 30 per cent fewer goods than they were one year ago.

"The slowdown in the outlook numbers definitely casts doubt on just how sustainable this recovery is," said Mr Tetsuro Sugiura, chief economist at Mizuho Securities Research Institute.

"Companies have been rebuilding stock based on the idea that demand would recover, but however you look at it, it's hard to see that happening." BLOOMBERG

From TODAY, Business – Tuesday, 30-Jun-2009

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Is this what recovery looks like?

Image via Wikipedia

Bullish DBS says Asia is rebounding in a 'V-shape'

by Esther Fung, updated 10:34 AM Jun 09, 2009

SOUNDING a bullish note that some of its peers did not completely agree with, DBS Group Research yesterday issued a report suggesting Asia is on its way to an economic recovery because the region's production is rebounding in a V-shaped fashion.

"Asia is perched on a recovery path at the moment," said DBS chief economist David Carbon. "Industrial production (in Asia) is 70- to 85-per-cent back to pre-crisis levels and exports have recovered about a third of their lost territory."

A key development is strong month-on-month industrial production data for April in Taiwan, Singapore, Korea and Thailand, he said.

"We believe that the drop in both industrial production and exports was due more to "one-off" and other temporary factors than to fundamental imbalances in Asia, and that the upturn is mainly a result of those factors fading from the picture," Mr Carbon said.

"As such, we do not expect a W-shaped path (another down leg) in the near term."

He said some of the temporary factors include the exports fall after the Olympics, the weakness in commodity prices and the shock from the financial meltdown in the fourth quarter of last year.

"Exports have come back, but in the past month or two, the rebound in production has been even sharper," he said. "Normally, producers wait before they produce until they are sure the demand is for real, and they draw down their inventories. In this case, production has come back very strongly.

"My sense is that it's probably meant to remain that way, to have a nice big surge there. They never walk hand-in-hand anyway."

While other analysts agree that the worst is over, they differ on whether the recovery is V-shaped.

The recent pick-up in production could be due to restocking depleted inventories instead of the result of actual demand, said Standard Chartered economist Alvin Liew, adding that the plunge in production in late 2008 and early 2009 was so sharp that slightly better data would make the profile a V-shape.

"Can the trajectory persist in that manner? I doubt it," said Mr Liew.

Mr David Cohen of Action Economics, too, said the sustainability of the recent pick-up was not conclusive yet.

A lot still depends on how robust the recovery in Europe and the United States. Analysts noted that the US unemployment rate rose to 9.4 per cent in May from 8.9 per cent in April, suggesting that even if the US economy recovers later this year, any growth could remain weak.

"There is some indication that demand has stabilised, but I'd be careful to say that we're on a V-shaped recovery as there is no compelling reason to say that demand from the advanced economies has picked up," said Forecast Singapore economist Vishnu Varathan.

"A lot depends on whether the US consumer will continue spending."

From TODAY, Business – Tuesday, 09-Jun-2009

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The paradox of cutting wages

BUSINESS COMMENT

Less pay equals more debt, leading to lower spending and a depressed economy

PAUL KRUGMAN

Falling wages are a symptom of a sick economy. And they're a symptom that can make the economy even more sick.

It's true that many workers are still getting pay increases. But there are enough pay cuts out there that, according to the United States Bureau of Labour Statistics, the average cost of employing workers in the private sector rose only 0.2 per cent in the first quarter of this year — the lowest increase on record. Since the American job market is still getting worse, it wouldn't be at all surprising if overall wages started falling later this year.

But why is that a bad thing? After all, many workers are accepting pay cuts in order to save jobs. What's wrong with that?

The answer lies in one of those paradoxes that plague our economy right now.

We're suffering from the paradox of thrift: Saving is a virtue, but when everyone tries to sharply increase saving at the same time, the effect is a depressed economy. We're suffering from the paradox of deleveraging: Reducing debt and cleaning up balance sheets is good, but when everyone tries to sell off assets and pay down debt at the same time, the result is a financial crisis.

And soon we may be facing the paradox of wages: Workers at any one company can help save their jobs by accepting lower wages, but when employers across the economy cut wages at the same time, the result is higher unemployment.

Here's how the paradox works. Suppose that workers at the XYZ Corporation accept a pay cut. That lets XYZ management cut prices, making its products more competitive. Sales rise, and more workers can keep their jobs. So you might think that wage cuts raise employment — which they do at the level of the individual employer.

But if everyone takes a pay cut, nobody gains a competitive advantage. So there's no benefit to the economy from lower wages. Meanwhile, the fall in wages can worsen the economy's problems on other fronts.

In particular, falling wages, and hence falling incomes, worsen the problem of excessive debt: Your monthly mortgage payments don't go down with your paycheque. America came into this crisis with household debt as a percentage of income at its highest level since the 1930s. Families are trying to work that debt down by saving more than they have in a decade — but as wages fall, they're chasing a moving target. And the rising burden of debt will put downward pressure on consumer spending, keeping the economy depressed.

Things get even worse if businesses and consumers expect wages to fall further in the future. John Maynard Keynes put it clearly, more than 70 years ago: "The effect of an expectation that wages are going to sag by, say, 2 per cent in the coming year, will be roughly equivalent to the effect of a rise of 2 per cent in the amount of interest payable for the same period."

And a rise in the effective interest rate is the last thing the US economy needs.

Concern about falling wages isn't just theory. Japan — where private-sector wages fell an average of more than 1 per cent a year from 1997 to 2003 — is an object lesson in how wage deflation can contribute to economic stagnation.

So what should we conclude from the growing evidence of sagging wages in America? Mainly that stabilising the economy is not enough — we need a real recovery.

The unemployment rate is almost certainly still rising. And all signs point to a terrible job market for many months if not years to come — which is a recipe for continuing wage cuts, which will in turn keep the economy weak.

To break that vicious circle, we basically need more: More stimulus, more decisive action on the banks, more job creation.

Credit where credit is due: President Obama and his economic advisers seem to have steered the economy away from the abyss. But the risk that America will turn into Japan — that we'll face years of deflation and stagnation — seems, if anything, to be rising. THE NEW YORK TIMES

From TODAY, World – Tuesday, 05-May-2009