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Breakingviews

Breakingviews - The madness of crowds is bad for the economy

Andres Garcia, 29, embraces Argi, a trained therapeutic greyhound used to treat patients with mental health issues and learning difficulties, as he relaxes at Benito Menni health facility in Elizondo, northern Spain, February 13, 2017.

NEW YORK (Reuters Breakingviews) - In the early days of the Covid-19 lockdown, a video clip went viral in which a man quipped that he’d choose any other option over sitting at home with his wife and children. It’s no joke. Tight home-working quarters and monotonous days are adding to job and other worries as the pandemic drags on. With World Mental Health Day coming on Saturday, it’s worth noting that mental illness isn’t just a problem for therapists. It also takes a heavy toll on the global economy.

Health concerns, lockdowns and the rest have significantly raised mental health challenges, according to the Commonwealth Fund, which said that in the early days of the pandemic psychological distress among adults aged 55 and older was nearly doubled compared to pre-Covid levels. The mental health of over half of U.S. adults was negatively impacted by the coronavirus, according to a July poll by research group KFF.

At the same time, fewer people can get needed help. The coronavirus has disrupted or halted critical psychological healthcare in 93% of countries worldwide, the World Health Organization said earlier this week.

Even before the pandemic, mental, neurological and substance abuse disorders were costing the global economy $2.5 trillion to $8.5 trillion annually, according to research cited by the World Bank. That’s 3% to 10% of all countries’ GDP combined. Workplace problems of various kinds were contributing factors.

Working exposed to Covid or from home has caused additional stress for some people, alongside increased economic uncertainty. It’s worth employers’ while to address the risks. In the United States, for example, productivity is reduced by 35% in employees with unresolved depression alone, which overall contributes to losses of more than $200 billion a year to the U.S. economy, according to the American Psychiatric Association.

American companies pay for that through medical costs, absenteeism, and overall malaise at work. And if it’s getting worse with Covid and working from home, it puts at risk a decent chunk of this year’s estimated $1.1 trillion of profit at S&P 500 Index companies, per Refinitiv data. In the United States and worldwide, making light of the madness of crowds is bad for the economy.

Breakingviews

Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.


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