What Lies Behind Soaring U.S. Unemployment Claims Is the Mental and Emotional Cost

Business School Professor Stephan Meier’s research shows that financial strains only scratch the surface for Americans facing job loss.

Stephan Meier
April 03, 2020

Some 10 million Americans, the highest jobless claims number recorded in U.S. history, applied for unemployment during the last two weeks. The financial consequences of unemployment are extensive for these workers and for a nation under crisis. But it’s worth pointing out that the effects of job losses are not solely monetary.

My research shows that jobs provide purpose, a feeling of competence, the sense of being useful and the connection to other people that cultivates a sense of belonging and community. Whether someone works behind a bar, as an actress or as a building maintenance person, a job gives—beyond a paycheck—mastery of a craft or skill and structure in the day. Thus, when someone loses a job, they lose much more than crucial income and benefits like health insurance. They lose a source of fulfillment, meaning that these newly unemployed workers will be suffering much worse than just financial strain.

While policymakers can help with loss of income, they are not well equipped to help compensate for loss in meaning. Nonprofit organizations and volunteer opportunities, on the other hand, might be able to provide short-term meaningful tasks for those facing unemployment. Writing letters to lonely and isolated elderly, or other tasks that can be done at home but have a purpose, might provide some compensation for the loss of meaning at work.

The toll of unemployment during this pandemic-fueled recession will be “mental and emotional,” in addition to financial, and it’s worth considering the scars that will remain when the economy is up and running again.

The pandemic is also reshaping the structure of work, transitioning jobs from communal offices to days spent at home behind a computer. A non-trivial aspect of the American economy is having in-person interactions with others. Even with the security of a steady paycheck, those working remotely may be feeling a lack of motivation and incentivization as well. Unfortunately, video conferencing or house-party social work events cannot replace real-life interaction with coworkers. Companies and policymakers will have to address how productivity might suffer during this phase, recognizing the mental toll on employees.

The longer the coronavirus lockdown lasts, the higher the psychic cost will be for millions who are missing the meaning that they gain from work. But all is not lost.

The coronavirus shutdown could help workers gain a new appreciation for personal interaction in the workplace, potentially increasing productivity and fulfillment upon their return to offices. What’s more, firms are likely learning how to optimize their workflow using technology, while employees are gaining a sense of autonomy over the structure of their days, perhaps resulting in healthy new habits when they’re back in the office.

So the coronavirus pandemic may increase meaning at work in the long term. But until then, companies and employers strategizing how to preserve mission and revenue, and policymakers looking to provide critical relief to millions of newly unemployed Americans, must be mindful to incorporate compassion and acceptance as they plan for the future of their workforce. 


A man with closely cropped brown hair, smiling, and wearing a white buttoned-down shirt and dark suit jacket

Stephan Meier is a professor at the Columbia Business School. His research focuses on the impact of psychology and economics on human decision-making and its implications for public policy and firms' strategy. This column is editorially independent of Columbia News.