Australia’s economic transition,unemployment,suicide and mental health needs

Abstract

Objective:

There have been substantial changes in workforce and employment patterns in Australia over the past 50 years as a result of economic globalisation. This has resulted in substantial reduction in employment in the manufacturing industry often with large-scale job losses in concentrated sectors and communities. Large-scale job loss events receive significant community attention. To what extent these mass unemployment events contribute to increased psychological distress, mental illness and suicide in affected individuals warrants further consideration.

Methods:

Here we undertake a narrative review of published job loss literature. We discuss the impact that large-scale job loss events in the manufacturing sector may have on population mental health, with particular reference to contemporary trends in the Australian economy. We also provide a commentary on the expected outcomes of future job loss events in this context and the implications for Australian public mental health care services.

Results and conclusion:

Job loss due to plant closure results in a doubling of psychological distress that peaks 9 months following the unemployment event. The link between job loss and increased rates of mental illness and suicide is less clear. The threat of impending job loss and the social context in which job loss occurs has a significant bearing on psychological outcomes. The implications for Australian public mental health services are discussed.

There is little doubt about the international and local benefits of a globalised economy. In the post-war era, living standards and longevity have increased dramatically in both lower and higher income economies. However, globalisation can have unwanted effects on employment and manufacturing, including in high-income countries, where free market outsourcing of labour from high- to low-cost regions has resulted in declining employment within traditional industries and stagnant wage growth for middle and lower income earners (Milanovic, 2012).

The Australian experience is typical. Most Australians employed in the immediate post-war era could expect tenured employment in a male dominated workforce − 25% employed in the archetypal ‘blue collar’ manufacturing sector (Australian Bureau of Statistics [ABS], 2012a). Since the mid-1960s, there have been dramatic increases in part time and casual work, the extension of work hours into evenings and weekends, an increase in the female participation rate and decreasing expectations of permanent employment. This has been associated with a gradual but persistent decline in the manufacturing sector, such that, by 2011, the manufacturing industry accounted for only 8% of total Australian employment (ABS, 2012a).

Mass unemployment events in the Australian manufacturing industry asa result of these broader economic trends engender significant anxiety and stress in affected communities. Prominent examples include concerns about the viability of the Whyalla steel industry, the recent wind up of car manufacturing and perennial threats to the Port Kembla steel works. These closures represent not only a threat to the livelihood of those individuals who lose their jobs but also an existential threat to the communities in which they occur. Mental disorders arise in the context of the social and economic environment, and such events would be expected to impact on the mental health of affected individuals.

In this viewpoint, we undertake a narrative review of recent literature that examines the links between unemployment, mental health and suicide with a focus on involuntary job loss due to plant closure. Specifically, we discuss the implications for mental health services at times of mass layoffs in reference to contemporary trends in the Australian economy.

Before proceeding, however, it is important to consider that unemployment is not a unitary definition and can variably include voluntary or involuntary job loss, under-employment or workers in the unpaid labour force. Similarly definitions of ‘psychological distress’ and ‘mental illness’ can be problematic. Mental illness may not be strictly defined as satisfying thresholds on validated diagnostic instruments and often relies on surrogate measures (such as healthcare registry data) in epidemiological research. Psychological distress can also be vaguely defined and represents a continuum of individual experience that may be a prelude to, symptom of, or completely unrelated to mental illness. For the purpose of this discussion, we consider unemployment as being involuntary job loss and attempt to distinguish psychological distress and mental illness as separate outcomes.

The impact of unemployment on mental health and suicide

An epidemiological association between unemployment and mental illness could be interpreted in three broad ways. First, unemployment may be directly causative of psychological distress; second, poor mental health may directly contribute to an individual’s job loss; or third, unemployment may have a non-causal association due to confounding by co-occurring factors.

A meta-analysis examining 315 published samples reporting the relationship between unemployment and mental health outcomes provides information on these differing perspectives (Paul and Moser, 2009). Analysis of cross-sectional studies found that unemployment was associated with anxiety or depression symptoms with a moderate (Cohen’s d) effect size of 0.51, indicating a doubling of considerable psychological distress from 16% in employed populations to 34% in unemployed populations. This effect was larger among blue-collar workers, in samples with a higher proportion of men and among studies conducted in countries with low levels of economic development and higher income inequality.

The same meta-analysis also examined longitudinal studies, where mean changes in employment were correlated with changes in psychological distress. Job loss in employed people was associated with a significant increase in psychological distress that resolved with subsequent re-employment. This effect peaked 9 months following unemployment and reduced but did not return to baseline in those who remained unemployed, indicating an acute peak in distress followed by a temporal adjustment to chronic unemployment.

Ultimately, the majority of job loss literature is not able to demonstrate causality due to the naturalistic nature of such research. While longitudinal data provide supportive evidence, randomised experiments of re-employment strategies provide perhaps the strongest possibility of demonstrating causality. One structured re-employment programme, evaluated in a prospective randomised trial (Price et al., 1992), was shown to be protective for reducing affective symptoms (both clinical and subclinical) in recently unemployed persons compared to controls who did not receive the intervention. While some of this effect may be explicable by provision of psychological support in such programmes, the strongest predictor for improvement in symptomatology was re-employment. Sub-analysis of the same study (Vinokur et al., 1997) indicated that the relationship between unemployment and psychological symptoms was mainly mediated by financial strain. This experimental evidence, while not conclusive, does go someway to drawing causative links between unemployment and psychological distress and underlying determinants of poor mental health within this context.

There is also a well-recognized association between unemployment and suicide. A recent meta-analysis of 13 samples derived from published cohort studies (Milner et al., 2014) found an association between unemployment and suicide (relative risk [RR] 1.58, 95% confidence interval [CI] = [1.33, 1.83]). The effect was less strong when prior psychiatric illness was controlled for (RR 1.15, 95% CI = [1.00, 1.30]). When men and women were considered separately, there was no significant association between unemployment and suicide in women. Taken together with the findings of Paul and Moser (2009), it seems that unemployment is likely to be causative of increased psychological distress, but eventual suicide is better explained by pre-existing mental illness.

Unemployment itself may also be a modifier of the relationship between mental illness and suicide. A large nested cohort study in Denmark (Agerbo, 2005) examining subjects admitted for a psychiatric illness reported lower odds of suicide at follow-up in unemployed persons compared to employed persons. In comparison, unemployment in a non-clinical population was associated with increased odds of suicide. This suggests that unemployment is associated with suicide in the general population, but might be protective of suicide among those with a psychiatric illness. Explanations for this include a greater level of stigma associated with a psychiatric diagnosis among employed persons or the psychiatric admission itself being precipitated by the threat of impending jobs loss or poor occupational performance. Certainly the loss of professional, social and financial standing that a psychiatric diagnosis implies may be more acutely felt by a person whose ongoing employment is at risk.

This also ties in with the fact that in many circumstances, the threat or anticipation of redundancy is more or at least as distressing as the experience of unemployment itself (De Witte, 1999). Cohort studies in workplaces undertaking redundancies report higher rates of psychosomatic symptoms and depression in people who considered their job insecure (Ferrie et al., 1995), while another study found an improvement in well-being of employees being considered for redundancy once they had actually become unemployed (Dekker and Schaufeli, 1995). Workers who remain employed also exhibit poorer concentration and higher levels of anxiety following mass redundancies in their workplace (Brockner, 1992). This may result from guilt regarding avoidance of retrenchment, recognition of reduced prospects of career change in a saturated industry or disaffection due to reduced workplace morale. At an epidemiological level, one large Danish record linkage study (Martikainen and Valkonen, 1996) indicated higher RR of suicide in employed persons compared to unemployed persons in times of high general population unemployment providing additional evidence of the stress invoked by the perceived threat of job loss and a possible social norm effect in ameliorating the distress associated with unemployment.

There is also evidence that higher aggregate unemployment rates may ameliorate the distress experienced by unemployed persons. A longitudinal cohort study (Clark, 2003) examined the impact of others unemployment on both the employed and unemployed at the regional-, household- and couple-level. This study demonstrated that surrounding unemployment negatively impacted employed individual’s well-being but improved unemployed men’s well-being at all levels, indicating a social norm effect. Broader population data also indicate a lower rate of suicide in unemployed persons in regions with high unemployment compared to those in regions with lower unemployment (Platt et al., 1992).

Unemployment also seems to correlate with increased emergency mental health service utilisation. One study (Bidargaddi et al., 2015) performed in Australia at a time of trend economic growth and low baseline unemployment indicated that small shifts in the unemployment rate were correlated with mental health emergency presentations based on International Classification of Diseases, 10th Edition (ICD-10) discharge codes including substance use disorders and intentional self-harm. This effect was stronger for women than men, more strongly associated with baseline male unemployment and demonstrated a time lagged effect of about 2 months behind unemployment data.

Unemployment specific to factory closure

The main limitation of naturalistic studies that have examined the link between unemployment, mental illness and suicide is that they cannot reliably demonstrate causality. Plant and factory closures provide quasi-experimental evidence of the relationship between unemployment and mental health outcomes. Job loss during factory closure avoids the selection bias inherent to population-based studies because job loss in this context often affects the entire staff and is not dependent on factors such as mental illness or the socio-economic status of retrenched individuals. They also provide a model to study the effect of mass layoffs in the manufacturing industry, which is becoming a more frequent occurrence due to current shifts in the Australian economy.

The largest study using this methodology (Browning and Heinesen, 2012) examined all persons in Denmark between 1980 and 2006 using linked healthcare and employment administrative data. Totally, 44,807 individuals retrenched due to plant closure were identified and matched to approximately 2.5 million control individuals with follow-up data between 5 and 20 years. This study demonstrated a doubling of suicide at 1 year following plant closure (hazard ratio [HR] 2.07 95% CI = [1.06, 4.06]) that remained significant until 4 years of follow-up and a 30% excess of suicide attempts that remained significant to 20 years of follow-up (HR 1.29, 95% CI = [1.06, 1.56]). Another study using a similar record linkage methodology in Sweden (Eliason and Storrie, 2005) also demonstrated a doubling of suicide in individuals unemployed due to plant closure, that persisted until 4 years of follow-up (HR 2.15 95% CI = [1.28, 3.59]). This association was only significant for men.

A study from New Zealand reported outcomes of people (90% male) who were made redundant at one factory and compared them to a control group in a nearby factory that continued operating (Keefe et al., 2002). Analysis of records determining the cause (based on International Classification of Diseases, Ninth Revision [ICD-9] codes) of hospital admissions up to 8 years post-closure demonstrated no difference in the number of admissions for mental health–related illness, but found an approximate tripling of admissions for self-inflicted injury both fatal and non-fatal (RR 3.16 95% CI = [1.04, 9.62]). Admissions for self-inflicted injury are likely to be a surrogate of increased prevalence of mental illness given the strong relationship between self-harm and diagnosable psychiatric disease at baseline and follow-up (Haw et al., 2001). This study had insufficient power to detect a difference in suicide rates between groups.

The largest analysis of plant closure literature in relation to mental health outcomes is reported in a recent meta-analysis (Paul and Moser, 2009). The effect size of the pooling of smaller studies was smaller than that reported in larger population studies but was still statistically and clinically significant with an approximate 70% increase in clinically relevant psychological distress in those people unemployed due to plant closure.

Conclusions from previous research

In summary, existing literature suggests that unemployment results in an approximate doubling of psychological distress and an increase in mental illness that is less quantifiable. This appears to be strongest in the first 9 months following job loss and diminishes over time. The association is particularly strong in male, blue-collar workers. The link between unemployment and suicide is weaker than the link between unemployment and mental distress, and might be limited to workers in previously secure employment or better explained by pre-existing mental illness. Moreover, the threat of job loss or insecure employment appears to be at least as psychologically distressing as job loss itself.

There is good evidence that the social and economic context in which an individual becomes unemployed is significant. The psychological ill effects of unemployment are felt most acutely when background unemployment is higher, potentially reflecting the perception of poor prospects for re-employment. Results in studies conducted after plant closure also support an association between job loss and psychological distress. In contrast to the general unemployment literature, research into plant closures reports a doubling of suicide rates at 4 years.

How does this evidence inform us about the likely effects of current shifts in the Australian economy?

As the Australian economy progressively shifts away from manufacturing towards services and technology, large and concentrated layoffs in legacy industries will inevitably occur. Affected workplaces are likely to be in areas of pre-existing socio-economic disadvantage – the remnants of the car manufacturing and steel industries being prominent examples. The implication is that baseline rates of mental illness and suicide may be higher in such regions, and the impact of job loss will be greater in terms of health service utilisation. Relative growth and prosperity in other sectors of the economy are potential drivers of inequality that may worsen the psychological impact of job loss in these communities.

The existing literature suggests a doubling of significant psychological distress, which can be expected to occur in populations that undergo job loss, and that this may be felt more acutely by male blue-collar workers in high-tenure workplaces, typical of plant and factory workers. The plant closure literature would also suggest a doubling of suicide mortality in the year following a mass layoff event. This risk is likely to recede after this point and return to baseline levels at 4 years of follow-up. While suicide is devastating, it is important to realise that suicide is a rare occurrence in Australia with a yearly incidence of 10.5 per 100,000 (ABS, 2012b). From the data we have reviewed, one excess death from suicide per 10,000 people laid off could be expected. However, because males account for 75% of all suicides (with a yearly incidence rate of 16.4 per 100,000) (ABS, 2012b), male predominant industries could expect two excess deaths from suicide per 10,000 people retrenched.

These findings should drive us to acknowledge the increased support required for affected communities where mass layoffs occur. For example, a doubling of hospital presentations for self-harm and suicide attempts within unemployed groups should be anticipated and increased emergency care and preventative measures be implemented proactively. It is also important to recognise that the impendingthreat of unemployment within failing workplaces may provoke a peak indistress and suicide prior to actual plant closure. Public health strategies should be implemented prior to an anticipated mass unemployment event. Longitudinal data also indicate that unemployed peoples’ well-being improves partially once re-employment occurs, and that psychological distress and the risk for mental health problems rises continually after unemployment peaking at 9 months (Paul and Moser, 2009). Therefore, from a public health perspective, government and community strategies should focus on creating new employment opportunities within this time frame.

Individuals displaced due to the closure of plants and factories are likely to experience significant existential trauma resulting in psychological distress that both predates retrenchment and is measurable at up to 4 years post–job loss. Large-scale closures of such workplaces are an inevitable consequence of Australia’s ongoing transition to a service-led economy. An appraisal of the literature indicates the direct effects of plant closure are measureable and significant. Proactive public health strategies to address these predictable outcomes are required. Social and medical services, including mental health services, need the capacity to deal with the predictable increase in demand when a large number of people in one community lose their jobs. Unlike natural disasters, the dates and locations of these events are often known well in advance enabling the orderly planning and provision of appropriate services. Australia is fortunate that strong welfare systems and income equality are protective for the psychological health of retrenched workers. This should be recognised as our economy transitions, such that economic progress is not made at the expense of those most vulnerable to the change.