News

As the Job Market Climbs, So Could Feelings of a Satisfying Life

man receiving employee of the month award

Jetta Productions / Getty Images

Key Takeaways

  • According to recent statistics, the unemployment rate continues to fall. This is crucial for mental health, as employment can serve as a protective factor.
  • However, the negative mental health effects of unemployment can be long-lasting, and joblessness is linked with lower levels of life satisfaction.
  • Unemployment increases the risk for encountering mental health concerns, but planning and support could lead to better outcomes.


Statistics on job growth show that 1 million jobs were added to the American economy in July. Only 235,000 jobs were added in August—about half of the monthly average for this year. Still, these new positions helped the unemployment rate continue to fall in August to 5.2%. Despite overall lower rates of unemployment, some people—especially those who have marginalized experiences—struggle with job insecurity and joblessness.

5.6 million people reportedly lost work because their employer closed or lost business due to the pandemic, 400,000 more than July. Black, Hispanic, and Asian people still had higher rates of unemployment than White counterparts, and data about additional experiences of marginalization such as queer identity were not reported.

A recent report published by the Mental Health Foundation, a UK-based non-profit, explains that joblessness is linked with negative mental health outcomes for adults and notes that many lack the practical help and mental health support they need to get through this tough time. Additionally, the negative impacts of unemployment can last for years after returning to work, and unemployment can lead to lower levels of satisfaction in life.

Job Instability Negatively Impacts Mental Health

For many in the United States, job loss results in a lapse in health insurance which impacts if and how they choose to seek medical attention and restricts access to mental health support. Unemployment is linked to an increased risk of suicide and various other psychological concerns. During the pandemic, isolation and uncertainty in the world has led to an increase in mental health issues, but many don't have the means to get help.

COVID-19 and the Delta variant have created unknowns about the future and confusion about health and safety, making various aspects of life feel unstable and job loss only adds to the stress. Samara Fritzsche, MSW, LSW, is a career counselor at JEVS Human Services, a non-profit dedicated to the helping people find meaningful work. She says, “Being unemployed effects every aspect of one’s life.”

Job loss can disrupt routines and decrease opportunities for socialization, leading to even more isolation during pandemic lockdowns and social distancing. Some associated unemployment with loneliness and noted that they relied on the workplace for social support.

Samara Fritzsche, MSW, LSW

The lack of daily structure and consistent interaction with other people that comes with being unemployed can lead anyone, regardless of their life situation, to feel isolated and depressed.

— Samara Fritzsche, MSW, LSW


Many reported that they lacked resources for daily living after job loss, noting housing insecurity as an impact of lost wages and explaining that loans or credit card debt was the only option for paying bills and rent. This was an even more difficult challenge for those attempting to care for family members and children.

In addition to these practical constraints, job loss can be an existential crisis. Many reported that unemployment results in feelings of a lack of purpose and described the experience as a “loss.” 25% referred to it as a “trauma.” Even just one experience of unemployment over a twenty year span can lead to lower levels of life satisfaction, and repeated bouts of unemployment will have continued impact.

Even job insecurity is linked to an increase in symptoms of depression and distress while negatively impacting self-esteem. Workers who encounter job insecurity (those who have jobs but feel that their positions are less stable or secure) are often marginalized people.

Coping With Job Loss

The ability to cope is impacted by the ability to rely on personal safeguards, access a support network, and plan for the future.

According to the Mental Health Foundation, 42% of people in the lowest income brackets said they lacked the support they needed during unemployment. Those who were previously self-employed encountered additional burdens as they often lacked access to the protections and aid that others sought. The gig economy is a core aspect of many people’s revenue streams, and some could only receive assistance related to part of their lost income.

Jobless people noted a need for help with tangible tasks—such as paperwork and job-hunting—as this can be difficult to navigate, time-consuming, and stressful. The Mental Health Foundation highlights the need to offer people better access to human contact throughout these processes, which are often online now, but noted that guides and resource lists (such as a comprehensive roadmap) would be useful for those who don't know where to begin. Helplines, where volunteers or professionals could offer specific services, could be useful.

Communities should consider providing mental health support in a way that is more specific to unemployed people, as they might have differing concerns and needs than those dealing with other mental health concerns and often don't know how or where to turn to for help.

The report notes the importance of addressing the needs of those who encounter job insecurity, too, as the creation of jobs does not necessarily mean that positions are stable or that workers have access to the resources they need to protect their mental health. This highlights the need to create more resources and eliminate barriers holistically.

Seeking a New Position

The pandemic continues to prevent 1.5 million people from seeking work, and for statistical purposes, they are not counted as “unemployed” by federal standards. In August, only 13.4% of the labor force held pandemic-related telework positions, but more people seek these safer options. Fritzsche says that many people don’t feel that workplaces within their industries will be safe—especially those in customer-facing or hospitality roles.

Ariel Lopez is a career coach and the co-founder of Knac, a hiring platform that aims to humanize the recruiting and application process by making it more fair and transparent. She says that people are considering health risks as well as their values, reprioritizing their approach to job-searching. She notes that gigs or freelance can pay similar wages to traditional opportunities but might require fewer risks. For some, that sense of control matters more than the stability of a traditional role.

Ariel Lopez, CEO and Founder of Knac

COVID-19 caused a lot of people to rethink what work looks like for them.

— Ariel Lopez, CEO and Founder of Knac

Lopez says that job-seekers are more empowered to rethink priorities, and they’re more likely to consider work-life balance and mental health now. “We live in a capitalist society where so many people define their worth and identity by what they do or how productive they are,” she says, adding that the pandemic shifted the cultural mindset, creating space for people to advocate for their needs.

Lopez notes that applicants have the upper hand when negotiating salaries and packages, highlighting that they should not be afraid to ask for benefits that will support their mental health. She underlines that people with marginalized identities should seek pay that closes the wage gap and compare offers, but they should also consider how they’ll grow within a company and take roles where there’s true interest in diverse leadership.

Jobs that offer livable wages, welcome influence over and flexibility in the work environment, provide opportunities for development, and adequate work conditions are a protective factor for mental health. This kind of work can add meaning to life and contributes to a person’s sense of identity.

For some, reframing a job loss as a time to reflect and recenter before pursuing new opportunities can be helpful. Fritzsche says to consider the cost of new training and recommends thinking creatively about how current skills could transfer to a new industry.

Fritzsche says gaps on a resume can make applicants feel depressed and anxious and admits that employment lapses can lead to fewer offers. She recommends filling in these gaps with other relevant experiences, such as volunteering, community involvement, and caregiving roles, including household management and parenthood. She highlights that even responsibilities pertaining to the home are important and valuable skills.

Fritzsche adds that rejection can lead to mental health concerns for motivated people who aren’t receiving offers. She says that a career counselor will remind applicants of their strengths and encourage them throughout their journey. They’ll also assist with resume development, interview prep, networking, and negotiations, Those who double as social workers can help find resources to meet daily needs and protect mental health.

What This Means For You

During job loss, it’s important to establish tangible support by reaching out for practical help whenever needs arise. Don’t be afraid to seek assistance for tasks or for mental health care. Communities should attempt to address gaps in services for jobless people and reduce the impacts of additional isolation. With the right interventions, it’s possible to cope with job loss and even use the time to reassess needs or goals to find a more fulfilling path forward.

Was this page helpful?
Article Sources
Verywell Mind uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. U.S. Department of Labor. Employment situation summary. Published September 3, 2021.

  2. Richter EP, Brähler E, Stöbel-Richter Y, Zenger M, Berth H. The long-lasting impact of unemployment on life satisfaction: results of a longitudinal study over 20 years in East GermanyHealth Qual Life Outcomes. 2020;18(1):361. doi:10.1186/s12955-020-01608-5

  3. Mental Health Foundation. Upheaval, uncertainty, and change: themes of adulthood. Published February 19, 2021.