- A growing number of Americans are citing mental health issues for why they aren't working.
- One-fifth of adults not looking for jobs said it's because of mental health, according to a new McKinsey survey.
- Mental health pressures have emerged as another factor fueling the labor shortage and slowing the jobs recovery.
With the pandemic closing in on its third year and job openings aplenty, more Americans are putting their mental health over employment.
The labor shortage holding up the economic recovery has been powered by a handful of trends. The Delta wave in the summer revived virus fears and kept some Americans from taking jobs. Childcare costs forced many working parents to stay home. Job openings quickly soared to record highs, yet millions of workers either stayed on the sidelines or quit.
While virus fears and childcare costs remain, mental health is quickly emerging as another barrier to employment. Fifteen percent of unemployed adults cited mental health for their joblessness, according to McKinsey's American Opportunity Survey conducted in October. That's up from 13% in a March survey and the second-most cited reason after physical health.
The share is even larger for jobless Americans who aren't looking for work. One-fifth of respondents said they stayed out of the job hunt because of their mental health. Only physical health was mentioned more often, with 45% of adults mentioning that as a reason.
Mental health pressures are being felt by old and young workers alike. Fifteen percent of workers aged 25 to 34 mentioned mental health, while 14% of workers aged 55 to 64 did the same.
The survey sheds new light on how the pandemic and its fallout is powering the labor shortage. Nearly 7 million Americans remain unemployed, yet businesses are desperate to hire. Job openings rebounded to 11 million in October, according to JOLTS data published Wednesday. That was the second-highest count in history and signaled the labor shortage was alive and well heading into the fourth quarter.
The mental-health crisis and the labor shortage go hand-in-hand
The labor shortage emerged in spring 2021 as Americans reevaluated what they wanted out of work. Pandemic stimulus and an abundance of job openings left unemployed adults with plenty of time and options. Businesses' huge demand for labor also created what President Joe Biden described as a new "bargaining chip" for workers to win better conditions.
The growing importance of mental health echoes that broader reckoning. The shift to and from remote work has given way to widespread burnout. A November survey of US mayors found that mental health and trauma were public leaders' biggest concern, with 52% citing it as a major issue. Even the Pope chimed in on November 3, calling on his Twitter followers to pray "that people who suffer from depression or burn-out will find support."
For many workers, the solution is simply higher pay. Low-wage sectors like dining, hospitality, and transportation have seen historically strong wage growth throughout the pandemic as firms hike salaries to attract workers. Higher wages, workers argue, can make up for the poor conditions and long hours typically seen in those sectors, especially as historic inflation chips away at their buying power.
Other firms will have to overhaul how they operate entirely if they want to rehire successfully, Peter Cappelli, a professor of management at the Wharton School of the University of Pennsylvania, told Insider's Stephen Jones. Childcare support and flexible work setups can make businesses more attractive employers, he added.
In other words, addressing some of the pandemic's biggest mental health burdens might be what it takes to revive the pre-crisis labor market.