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The Psychological Impact of Unemployment and Underemployment


by SIOP Administrative Office

SIOP Engages with Congressional Policy Makers

As part of SIOP’s ongoing advocacy work with consulting firm Lewis-Burke, the Society hosted a congressional roundtable discussion May 5 on the psychological impact of unemployment and underemployment.

Most Americans spend most of their waking hours working, but millions are currently either out of work or are working fewer hours than they need or want. Youth today are suffering particularly high rates of unemployment (19.1% in April 2014, as compared to roughly 6% of men and women over 20). While the economic impact of having either no work or not enough work is relatively clear, the emotional and psychological impacts have received somewhat less attention.

SIOP members Doug Maynard and Mike “Dr. Woody” Woodward participated in the recent roundtable discussion to explain how I-O psychology explores the psychological side of work and employment with the expressed goal of improving employment experiences for workers and organizations. As such, I-O psychology can inform the discussion on the psychological and social impacts of unemployment and underemployment in the United States.

The purpose of the roundtable was to offer SIOP members’ expertise on issues such as:

  • The difference between how economists  and psychologists define unemployment and underemployment and why this difference is important
  • The importance of decent work and the impact of job loss and underemployment on worker well-being and motivation
  • The significance of youth unemployment and the potential impact on the future of America
  • The difference between those who are looking for employment and those who are not

The roundtable participants discussed critical areas of focus within the field of industrial and organizational psychology, which include:

  • The pessimistic spiral of self-perpetuating long-term unemployment
  • The impact of underemployment upon work motivation and psychological well-being
  • Youth unemployment and the Millennial perspective on building a future
  • Discouraged Americans and decreasing labor participation in America
  • The psychology of reintegrating veterans into the workforce
  • The mental health effects of having to start over and change careers

While the economic impacts of these situations are relatively well-known, research findings have also demonstrated significant psychological and work-related issues associated with these situations, such as the fact that unemployment and underemployment are linked to increases in anxiety, stress, and depression; some workers experience psychological trauma as a result of being laid off; the underemployed experience reduced job satisfaction and commitment, and greater cynicism and likelihood of leaving; and the underemployed also are less likely to go above and beyond for their organization and co-workers, and more likely to engage in counterproductive behaviors on the job.

The primary hurdle for many struggling with unemployment or underemployment may be access to resources, including training and education, and reliable access to technology (e.g., Internet, computers) which can facilitate personal development and networking. Geographical immobility is also an issue.

Based on existing data in I-O psychology, the roundtable participants explained that the following initiatives would help us better understand and address the problems that stem from job loss and underemployment:

  • Develop career training which focuses on both ‘hard’ and ‘soft’ transferable job skills
  • Explore ways to encourage interest in the trades (e.g., revive the apprenticeship model)
  • Integrating mental health management into offices associated with unemployment services
  • Engaging market innovators
  • Incorporate measures of job quality into government data initiatives such as the BLS
  • Assist workers in exploring the potential of virtual employment

Lewis-Burke Associates LLC is a full-service government relations firm located in Washington, DC that specializes in providing comprehensive federal representation for scientific associations and institutions of higher education. Lewis-Burke, working with SIOP, is working to develop a strategic advocacy agenda, build support and coalition activities, expand federal agency requests for and utilization of I-O research results and practice capabilities, enhance the membership’s understanding of the federal political process as it relates to science policy and funding, and build relationships with members of Congress and federal agencies.
Through SIOP’s work with Lewis-Burke, the society also hopes to better leverage coalition activities with partner organizations such as FABBS, APS, APA, and SHRM.

For more information about our partnership with Lewis-Burke, read a full story here. Read about similar roundtable discussions here.