Inflation is a complex economic phenomenon that affects the prices of goods and services over time. It is often discussed in terms of its impact on the economy and individual finances. However, there another consequence of inflation that deserves attention: its potential impact on mental health. So lets talk about how inflation can impact mental health.
Financial Stress and Anxiety
One of the primary ways inflation can affect mental health is through financial stress and anxiety. As the cost of living rises, individuals may struggle to maintain their standard of living or meet their basic needs. This financial strain can lead to increased worry, anxiety, and uncertainty about the future. According to a study published in the Journal of Consumer Research, economic stress resulting from inflationary pressures can significantly contribute to psychological distress.
Reduced Purchasing Power
Inflation erodes the purchasing power of individuals, meaning that their money buys less than it did before. As prices rise, people may find it challenging to afford essential items or engage in activities they once enjoyed. This loss of purchasing power can lead to a sense of frustration, helplessness, and decreased life satisfaction. A study conducted by the University of Southampton found a correlation between high inflation rates and decreased subjective well-being among individuals.
When our money does not go as far as it once did we begin to prioritize our basic needs. Often times what we see is a reduction in preventative care, such as mental health services and self care. On the surface this is very logical, however over time reduced mental health support and increased stress and anxiety can lead to even more negative impacts.
Social Inequality
Inflation can exacerbate existing social inequalities, which can have detrimental effects on mental health. Higher inflation rates often disproportionately affect low-income individuals and families who struggle to make ends meet. The resulting income disparities can create a sense of injustice and lead to feelings of anger, frustration, and hopelessness. A study published in the Journal of Applied Psychology found a positive association between inflation-related income inequality and poor mental health outcomes.
Interactions with Employment
Inflation can impact the labor market, leading to changes in employment dynamics. Rising prices may prompt employers to reduce hiring, freeze wages, or even implement layoffs. The uncertainty and instability caused by inflation-driven employment fluctuations can contribute to feelings of job insecurity, anxiety, and reduced self-esteem. A study published in the Journal of Organizational Behavior highlighted the adverse effects of inflation on job satisfaction and mental well-being among employees.
It is crucial to take steps to reduce the negative effects of inflation on mental health, such as improving access to mental health services, promoting financial literacy, and implementing equitable economic policies. Additionally, fostering social support networks and encouraging open discussions about financial and mental health challenges can help individuals navigate the psychological impact of inflation.
At a time of increase anxiety and financial concern we at the Therapeutic and Wellness Solution Center work to ensure that mental health services do not become a stressors in themselves. Due to this we offer aggressive sliding scale fees that can reduce session costs by up to 75% for those that qualify. We also provide information on how to find other affordable mental health services. If you would like more information on affordable mental health services please click here.
References:
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Nelson, T. F., & Howard, M. O. (2019). Financial stress, substance use, and mental health among college students. Journal of Financial Counseling and Planning, 30(1), 82-96.
Stephens, N. M., Markus, H. R., & Fryberg, S. A. (2012). Social class disparities in health and education: Reducing inequality by applying a sociocultural self-model of behavior. Psychological Review, 119(4), 723-744.
Popp, J., & Worrell, D. L. (2017). Unemployment, underemployment, and mental health: Conceptualizing employment status as a continuum. Journal of Career Assessment, 25(4), 634-650.
Kessler, R. C., Mickelson, K. D., & Williams, D. R. (1999). The prevalence, distribution, and mental health correlates of perceived discrimination in the United States. Journal of Health and Social Behavior, 40(3), 208-230.