Jey Austen, a brand designer at a fintech company, lost her job about two weeks ago. But the layoff came as no surprise, said Austen, 27, who is trans and uses the pronouns.
A market downturn in recent months has hammered the tech industry, prompting a wave of layoffs. Austen, whose lease on an apartment in Austin, Texas, ends in August, will receive three weeks of severance pay but is otherwise lacking in savings, they said.
“At worst, I’ll be sleeping in my car,” said Austen, who earned $80,000 a year. “It’s a draw situation all around.”
Compounding the stress, Austen will likely struggle to pay for her usual weekly therapy appointments, they said. To save money, they are considering reducing appointments to bi-weekly or monthly appointments. “The therapy was already expensive,” Austen said.
Austen is not alone. So far this year, more than 21,000 tech workers have been laid off, according to Crunchbase. While notable, the layoffs represent only a small fraction of the 8.9 million tech employees nationwide, according to a job count of the CompTIA industry trade group.
Across the economy, acute financial distress could deepen as the Federal Reserve pursues a series of rate hikes aimed at curbing sky-high inflation, but risks tipping the economy into a recession, experts told ABC News earlier this month.
Nearly 70% of economists believe a recession will start sometime next year, according to a survey of 49 macroeconomists conducted by the Financial Times and the University of Chicago Booth School of Business this month.
Research has linked economic recessions – a decrease in economic output that lasts for at least several months – and an increase in mental health problems, such as anxiety, depression and even suicide, experts have said. at ABC News. In difficult economic times, the prevalence of potentially catastrophic financial events – such as job loss or foreclosure – exacerbates pre-existing mental health issues and creates new ones, further compounding these issues if a financial downturn persists for several months. or years.
Additionally, because the U.S. health care system largely ties insurance to employment, losing a job often compromises access to mental health support when a person needs it most. said the experts. The prospect of increased mental health problems – combined with inadequate support – poses an additional concern in light of the pandemic, which has already taken a toll on the psyches of many people, the experts added.
“After COVID, there has been an unprecedented increase in mental health issues,” Ronald Kessler, professor of health policy at Harvard Medical School, told ABC News. “What comes as a result of this is a real double whammy.”
Typically, the economy loses millions of jobs during a recession. During the Great Recession, between 2007 and 2009, non-farm employment fell by 6.8 million jobs while the unemployment rate rose from 4.8% to 9.6%, according to the St. Louis Federal Reserve.
A solid body of research spanning decades links economic downturns to an increase in mental health problems, establishing the role played by an increase in major difficulties with employment, housing and other financial supports, experts said. experts at ABC News.
A study 2019 published in the Association for Psychological Science – which examined those affected by the Great Recession – found an increase in depression, anxiety and problematic drug use among those who suffered even a single major ordeal, such as job loss or foreclosure, not to mention multiple incidents.
Losing a job during the Great Recession increased the risk of a mood disorder in the United States by 22%, according to a study published last year by researchers at the University of Alberta who reviewed the available literature on the subject. The researchers also found 1.2 to 5.8 times more likely to have a major depressive episode associated with experiencing home foreclosure during the Great Recession.
“Pre-existing mental health conditions are worsening and mental health problems are emerging for some in economic difficulty,” Ralph Catalano, professor of public health at the University of California, Berkeley, told ABC News. “How would you feel if you lost your job? »
Chris Ruhm, a professor of economics and public policy at the University of Virginia who specializes in the health effects of economic downturns, put it bluntly: “When the economy gets worse, mental health gets worse,” said he declared.
An alarming finding shows a correlation between recessions and rising suicide rates, Ruhm said. Between 2008 and 2010, the first three years after the financial crisis, the suicide rate increased at a rate more than four times that of the eight years before the crisis, according to a 2012 study in The Lancet. “We have known for many years that the suicide rate increases reliably with the unemployment rate,” Ruhm said.
The adverse mental health effects of an economic downturn disproportionately affect low-income people and minorities, as they are less likely to have accumulated savings or other sources of wealth that could soften the blow, said the experts.
“People of lower socio-economic status are always more affected by things like this,” Catalano said. “They have a tougher time when recessions come.”
The magnitude of these mental health effects depends on the severity and duration of a recession, experts said. A long recession can prolong the time individuals go out of work, worsening mental health issues as a person grapples with financial stress and possible feelings of self-blame, experts have said. “When there’s a more severe recession, the effects are going to be more severe,” said Ruhm, an economics professor at the University of Virginia.
Certainly, the US economy could avoid a recession altogether. If a recession does occur, it could be short and mild, some economists predict. A mild slowdown would blunt many of the worst mental health effects, in part because people are better equipped to weather a brief financial challenge with savings or government support, experts said.
“With economic downturns that are short, that’s not a huge effect,” said Kessler, a professor at Harvard Medical School. “A lot of resources are there to cushion this stuff.”
Still, a potential recession brings stress, in part because the depth of financial hardship remains uncertain, even for members of the middle and upper class, Ruhm said. “In general, people live with some degree of anxiety and uncertainty,” he said.
A New York-based employee at cryptocurrency exchange Coinbase – who was fired this month and requested anonymity due to the terms of a severance agreement – said the prospect of a recession worried him because it could dry up job prospects after severance pay runs out.
“What if a recession hits and I get nothing? ” she says. “How am I going to pay the rent? »
If you’re struggling with suicidal thoughts or worried about a friend or loved one, help is available. Call the National Suicide Prevention Lifeline at 1-800-273-8255 [TALK] for free and confidential emotional support 24 hours a day, 7 days a week.