Mental Health & The Economy

 

We all know that COVID-19 has significantly affected both the domestic and global economies through widespread contagion, the closure of businesses, job losses, scaled-back operations and lost revenues. Also, whenever a new variant is identified, the investment markets tend to react negatively.¹ Therefore, it’s easy to connect the dots between the physical health of the nation’s population and the health of the economy.

 

But what about mental health? In recent years, there has been a much greater focus on the breadth and depth of mental illness in America, including anxiety, depression, burnout and substance abuse. The pandemic has exacerbated these issues as people suffer from fear of job instability, isolation and worry about their physical health.²

 

On top of that, we are experiencing what economists are referring to as “The Great Resignation.” New insights and observations reveal that people aren’t just tired of their jobs due to poor wages, but they also suffer from long-term mental fatigue related to working a job that provides no joy and adds stress.³

 

Insurance companies previously classified mental illness as a pre-existing condition and would charge higher premiums or even deny health coverage for a patient with such a diagnosis. However, the Patient Protection and Affordable Care Act (ACA) of 2010 was the first substantial legislation that recognized mental illness as a physical ailment and mandated that health insurance companies cover it under their policies. Millions of Americans have benefitted from the diagnosis and treatment of conditions that have traditionally been treated as taboo. Through therapy, medication, behavior and lifestyle modifications, many Americans are able to recover or manage their mental health, which improves their quality of life and engagement in jobs and allows them to contribute to a stronger economy.⁴

 

Worry is a big contributor to mental health issues, and we know that people spend a lot of time worrying about their finances. What if this happens, or what if that happens? A good way to provide some sense of relief is to be properly insured against large financial losses. We can help you prepare for retirement by setting up an insurance-backed source for a stream of income. Please give us a call if you’d like to learn more.

 

Unfortunately, the pandemic changed the working landscape and thus uncovered many of the ongoing flaws in both the health care industry and labor force that either contribute to or at least fail to mitigate factors that contribute to mental illness. This, in turn, continues to hurt the health of our economy as much as our personal health. For example, since the beginning of the pandemic, 60% to 75% of health care workers have reported symptoms of exhaustion, depression, sleep disorders and PTSD. One in five have quit their jobs. Even before COVID-19, burnout cost the U.S. health care system about $4.6 billion a year.⁵

 

A recent survey by The Economist Intelligence Unit revealed that company executives view fatigue, burnout and stress as the top barriers to business growth. It also found that eight in 10 workers feel emotionally drained by their jobs. As for coping with the added stress of the pandemic, today’s workers are having to deal with isolation, disconnection and the blurred line between work and home life.⁶

 

Content prepared by Kara Stefan Communications.

 

¹ Reuters. Nov. 26, 2021. “What investors are saying about the new virus variant.” https://www.reuters.com/markets/europe/what-investors-are-saying-about-new-virus-variant-2021-11-26/. Accessed Dec. 6, 2021.

² Marius Brülhart, Valentin Klotzbücher, Rafael Lalive and Stephanie K. Reich. Nature. Nov. 17, 2021. “Mental health concerns during the COVID-19 pandemic as revealed by helpline calls.” https://www.nature.com/articles/s41586-021-04099-6. Accessed Dec. 6, 2021.

³ Yasmin Gagne. FastCompany. Dec. 6, 2021. “Prince Harry says quitting can be good for your mental health.” https://www.fastcompany.com/90702784/prince-harry-says-quitting-can-be-good-for-your-mental-health. Accessed Dec. 6, 2021.

⁴ Steve Pitman. Cal Matters. Aug. 26, 2021. “Pandemic brings extra need for mental health care resources.” https://calmatters.org/commentary/2021/08/pandemic-brings-extra-need-for-mental-health-care-resources/. Accessed Dec. 6, 2021.

⁵ David Levine. U.S. News & World Report. Nov. 15, 2021. “U.S. Faces Crisis of Burned-Out Health Care Workers.” https://www.usnews.com/news/health-news/articles/2021-11-15/us-faces-crisis-of-burned-out-health-care-workers. Accessed Dec. 6, 2021.

⁶ Charlotte Business Journal. Dec. 6, 2021. “Workforce health: A business imperative to achieve economic prosperity.” https://www.bizjournals.com/charlotte/news/2021/12/06/workforce-health-a-business-imperative-to-achieve.html. Accessed Dec. 6, 2021.

 

 

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

 

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.

 

Investment Advisory Services are offered by Imber Financial Group, LLC., a Registered Investment Adviser firm. Insurance services are offered through Imber Wealth Advisors, Inc. Imber Financial Group, LLC. and Imber Wealth Advisors, Inc. are affiliated companies

The U.S. is in the emergent stages of the omicron variant of the coronavirus. However, we now have some experience in what this could mean moving forward, both for the health and economic impact of the U.S. and our global neighbors.

 

To continue fighting COVID-19 without shutting down schools and businesses, the Biden Administration recently announced new guidelines to help contain the virus. The initiatives include free booster shots for all adults, new quarantine and testing policies in schools, vaccination or weekly testing requirements by businesses, free at-home COVID test kits, more resources allocated to areas with hotspot flare-ups, and greater global distribution of vaccines to help stop the spread.¹

 

Regardless of where individuals stand on the debate of mandated vaccines, it is important to recognize the long-term effects of the continued spread of the virus. The stock market had a strong negative reaction after the omicron variant was identified in the U.S. If the virus continues to spread, we will continue suffering these setbacks. For many, the pandemic is less a health issue than a financial one. If you are looking for ways to shore up your investment portfolio to weather the ongoing volatility presented by COVID-19, please give us a call.

 

The following are key economic questions associated with omicron — or any new variant that develops in the future: 1) What is our capacity to prevent and contain its spread;² 2) How susceptible is it to various demographics; and 3) How will it affect our current vaccination levels and waning immunity?³

 

A recent study of the phenomenon presents a variety of possible scenarios. One positive outcome of omicron is that it motivates more people — and countries — to higher vaccination levels. If the new variant proves more easily transmitted than the delta variant, we may need to step up masking and social distancing measures; even sending workers back to working from home. If the strain proves to be vaccine-resistant, more resources will need to be dedicated to modifying messenger RNA vaccines and getting them out to the public as quickly as possible.

 

What about rising inflation? Some economists believe higher prices are directly linked to global shortages and higher demand — which would abate if omicron constrained the economy again. However, if inflation is due to monetary and fiscal stimulus policies, prices could further increase regardless of the direction of the pandemic.⁴

 

Finally, since vaccine hesitancy appears to be emanating from a lack of trust in the government, the U.S. may be jeopardized by the threat of growing civil instability. This has the potential to land us in the same high-risk category of countries that experience ongoing civil unrest and attempts to overthrow the government.⁵

 

For America’s health, safety, economic prospects and our own financial portfolios, let’s hope the issues surrounding COVID-19 do not manifest in these ways.

 

Content prepared by Kara Stefan Communications.

 

¹ The White House. Dec. 2, 2021. “President Biden Announces New Actions to Protect Americans Against the Delta and Omicron Variants as We Battle COVID-⁠19 this Winter.” https://www.whitehouse.gov/briefing-room/statements-releases/2021/12/02/fact-sheet-president-biden-announces-new-actions-to-protect-americans-against-the-delta-and-omicron-variants-as-we-battle-covid-19-this-winter/. Accessed Dec. 3, 2021.

² Andrew Sheets and Matthew Harrison. Morgan Stanley. Nov. 30, 2021. “Omicron Variant Causes Concern.” https://www.youtube.com/watch?v=8iJNYWeslf8. Accessed Dec. 3, 2021.

³ Mick Costigan. World Economic Forum. Nov. 30, 2021. “The Omicron variant is here – what comes next? Here are 5 possibilities.” https://www.weforum.org/agenda/2021/11/omicron-whats-next-5-scenarios-to-help-business-leaders-make-the-right-decisions/. Accessed Dec. 3, 2021.

⁴ Jeff Cox. CNBC. Nov. 27, 2021. “The current inflation run is similar to other episodes in history, but with important differences.” https://www.cnbc.com/2021/11/27/the-current-inflation-run-is-similar-to-other-episodes-in-us-history-but-with-important-differences.html. Accessed Dec. 3, 2021.

⁵ Maneet Ahuja. Forbes. Nov. 29, 2021. “Ray Dalio Says America’s Decline Will Upend Lives, Not Just Portfolios.” https://www.forbes.com/sites/maneetahuja/2021/11/29/ray-dalio-says-americas-decline-will-upend-lives-not-just-portfolios-the-billionaire-investor-paints-a-dire-scenario-in-his-new-book/?sh=4961c9b3c4f0. Accessed Dec. 3, 2021.

 

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial or investment advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

 

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.

 Investment Advisory Services are offered by Imber Financial Group, LLC., a Registered Investment Adviser firm. Insurance services are offered through Imber Wealth Advisors, Inc. Imber Financial Group, LLC. and Imber Wealth Advisors, Inc. are affiliated companies