About 30% of American homeowners are underwater on their mortgages, collectively owing over $1 trillion above their property values. In many of the hardest hit areas, values have fallen by about 60%; with some homeowners owing more than twice the worth of their home. The downward spiral continues to this day, with a new report from real estate information provider Zillow, Inc. claiming these negative equity figures threaten hopes for economic recovery.
Unemployment Concerns Persist
The Bureau of Labor Statistics reports that the national unemployment rate has dropped significantly since 2009 to about 8%. But that decline is no indication of improvement. In reality, it shows quite the opposite: many people have simply stopped looking for work, so the Bureau no longer recognizes them as unemployed. In fact, there were actually 169,000 fewer people employed across the country this past April 2012.
Gas and food prices have skyrocketed, and many young Americans are graduating from college facing hefty student loans with few employment prospects. While the nation crawls towards a fragile recovery, many are still jobless, in debt, filing for bankruptcy and struggling to pay bills.
It comes as no surprise, then, that about 40 million Americans or 18% of the US population, are suffering from an anxiety disorder, and 10% are taking an antidepressant medication.
Could There be an Association?
Researchers Arthur Goldsmith, Ph.D. and Timothy Diette, Ph.D. of the Department of Economics at Washington & Lee University, believe there is a correlation; especially among those who have been unemployed for a long time.
In a recent study examining the impact of unemployment on mental health, the pair analyzed three groups of individuals, none of whom had experienced any mental health issues during the previous 52 weeks. Observing only people who had not suffered from any psychological condition in over four years, the researchers were able to reduce the chances that poor mental health caused their subjects' unemployment, versus the other way around.
The three groups included: those who had been employed the entire test time, those unemployed for less than 26 weeks and those without work for more than 26 weeks. The goal was to distinguish the impact of short-term versus long-term unemployment on mental health.
Their findings led them to suggest that being unemployed for long periods negatively impacts mental health, revealing that African-American, Latinos and individuals with higher education levels were heavily impacted.
Short-term unemployment, however, did not result in significant emotional decline; the only factor proven to buffer an individual from the negative effects of joblessness was having a living father. Other factors, such as having a supportive family members and friends, did not appear to mitigate negative psychological outcomes.
In light of past research along with their new findings, the pair concluded that public policy makers should be aware of the mental health consequences of long-term unemployment. A rise in mental health costs triggered by long-term unemployment woes should not be overlooked.
The results also underscore the need to establish policies to improve the labor market, which in turn will help alleviate the emotional distress of millions of Americans.
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Date of original publication: April 02, 2013