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By Professor David Fryer

Have you, one of your family or one of your close friends ever been unemployed? Have you recently counselled an unemployed person? If so, what do you know about was it like? On the other hand, have you recently read about ‘the unemployed’ in a newspaper or listened to politicians talking about ‘the unemployed’ on the television? If so, how did that compare?

Recently Employment Minister, Bill Shorten, was reported in The Australian (http://bit.ly/On2Qg0) as having “backed a controversial argument being put by his senior mandarins that the dole should be kept low to encourage the unemployed to take badly paid jobs.” Mr. Shorten’s backing followed a submission from four Federal departments to an inquiry into the adequacy of the Newstart Allowance that the base rate of Newstart should not be raised from $245 per week as that would have the “distinct disadvantage of reducing employment incentives, especially for those who can only obtain low-paying employment.” To put the Newstart allowance into context, according to the National Welfare Rights Network President, “While the minimum wage is $606.40 a week, Newstart at $245 is 41 per cent of minimum wage. After income tax, a single unemployed person would double their disposable income if they got a job at the minimum wage.” (http://bit.ly/OZokKf)

What has all this got to do with psychology or counselling as opposed to politics? Well, this is an instance where well over half a century of high quality psychological and related research, which has shown that unemployment causes incalculable misery and mental ill-health, is relevant to policy.

When I talk about ‘mental ill-health’ I am not talking loosely. Researchers have looked specifically at: anxiety; depression; positive and negative affect; social isolation; demoralisation; resignation; lowered self-esteem; cognitive difficulties; para-suicide; and suicide and done painstaking research into their relationship with unemployment.

I am not just talking about research with a few hundred individual people who have lost their jobs. Systematic research has been carried out not only with many thousands of unemployed individuals but also with whole workforces made redundant when workplaces closed down and with all the school leavers from schools at the end of a year, and also with whole families, with organisations who ‘let people go’, with whole communities – sometimes whole towns – hit by mass unemployment and also with the entire populations of states or countries.

I am not just talking about research in post-industrial Britain. Research has been done in a wide variety of countries as well as the UK including: Australia; Austria; Finland; Germany; Ireland; Italy; Netherlands; New Zealand; Norway; Poland; Sweden; and the USA. I am not just talking about research in the Great Depression of the 1930s. Relevant research findings have also been reported from: the 1800s; early 1910s; the 1970s; the 1980s; the 1990s and right up to the present day.

I am not just talking about research done by leftist social scientists with an ideological axe to grind. Whilst some of the classic research in the 1930s was done in Central Europe by Austro-Marxists, the majority of research has been funded by: “apolitical” Research Councils (e.g. the Medical Research Council, the Economic and Social Research Council, the Australian Research Council); Charitable Foundations; “Independent” Think Tanks; Government Departments; and carried out by individual academics; freelance researchers and unemployed people themselves.

I am not just talking about research using one research method, where findings might be argued to be artefactual, i.e. an artificial result of the method used. Different studies have used all the most robust methods favoured by psychological, medical and social scientists including: psychiatric assessment; physiological analysis; epidemiology; community case studies; action research; document analysis; observation (both participant and non-participant); depth interviews; semi-structured interviews; investigative interviews; focus / group interviews and surveys.

I am not just talking about cross sectional research, where the association between unemployment and poor mental health might be a result of individual drift (those with poorer mental health becoming and remaining unemployed) rather than social causation (unemployment causing mental ill-health). Well-designed, longitudinal studies, using scales with proven reliability and validity to measure mental health, have tracked large, carefully matched, samples of people in and out of paid jobs, from school or employment to unemployment, etc. and demonstrated that groups that become unemployed during the course of the research exhibited deterioration in mean mental health compared with continuously employed groups.

Finally here, meta-analyses carrying out sophisticated statistical techniques on huge corpuses of data pooled from different studies have established beyond reasonable doubt that unemployment causes psychological deterioration. Amongst researchers in the field there is near unanimity that unemployment ‘causes’ mental ill health.

Moreover, the psychological impact of unemployment on the unemployed is only a small part of its negative psychological impact. Unemployment has been shown to affect the well-being not only unemployed people themselves but also: their spouses; their children; other people who are not unemployed themselves but living in communities where there is mass unemployment; those who worry about being made unemployed even if it never happens to them; and those who have been unemployed and are re-employed but still scarred by their unemployment.

According to the Australian Bureau of Statistics, the rate of unemployment in Australia is 5.2% (http://bit.ly/Q4kX5Q). Although this translates into risk of misery and ill-health for over 600,000 families in Australia, compared to other OECD countries this is relatively ‘good’ compared with countries with much bigger populations: the rate of unemployment in the USA is over 10% and in the UK it is over 8%, let alone compared with countries like Greece (24.4%) and Spain (24.6%) (http://bit.ly/NO6DSf) the Australian rate looks excellent.

However, in 2011, the unemployment rate for Indigenous people in Australia was 13% in Major Cities, 19% in Regional areas and 15% in remote areas (http://bit.ly/RTgoAP) and youth unemployment (15–19 year olds looking for full-time work as a proportion of full-time youth labour force) in Australia increased 2.5 percentage points to 24.1 per cent in July 2012 – http://bit.ly/On2Z30).

If we refocus from Australia to the global situation, the Executive Summary of the International Labour Office document, Global Trends 2012 (http://bit.ly/VAZcOZ) estimates global unemployment to be standing at 200 million and it estimates that “more than 400 million new jobs will be needed over the next decade to avoid a further increase in unemployment.” It continues: “to generate sustainable growth while maintaining social cohesion, the world must rise to the urgent challenge of creating 600 million productive jobs over the next decade, which would still leave 900 million workers living with their families below the US$2 a day poverty line, largely in developing countries.”

Shocking though these figures are, the above figures actually severely underestimate the number of unemployed people because to count above as unemployed a person needs to be not only without a job and wanting one but to have actively sought work in the last four weeks. Given the psychological consequences of unemployment include depression, lowered self-esteem, demoralisation many unemployed people stop actively seeking employment and when they do they stop being counted as unemployed.

To return, finally, to Bill Shorten and the argument that the dole should be kept low to encourage the unemployed to take badly paid jobs. High quality research shows beyond doubt that unemployed people are overwhelmingly desperate to become employed, that the more desperate they are to become employed the more their mental health is at risk and that financial stress and insecurity exacerbates the negative psychological consequences on unemployment. We are facing a global unemployment problem with almost incalculable psychological, social and public health costs but even so our policy makers are quite capable of finding ways to make a bad situation, psychologically speaking, even worse.

Author Information:

Professor David Fryer, Head of Research at the Australian Institute of Psychology, gave an Invited Address on the psychological consequences of unemployment at the International Congress of Psychology 2012 in Cape Town. A recent relevant publication of David’s is:

Fryer, D. (2012). Critical differences: the development of a community critical psychological perspective on the psychological costs of unemployment. In Kieselbach, T. & Mannila, S. (Ed.). Unemployment, Precarious Work and Health. Research and Policy Issues. Wiesbaden: VS – Verlag für Sozialwissenschaften, 473-489.

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