The roller coaster ride—seemingly jammed in a downward-plunge trajectory—shows few signs of leveling, little hope of slowing. The volatility and uncertainty that have come to characterize 2009 maintain a whiteknuckled grip on psyches across demographic divisions. Numbers tell the story, often more succinctly and more concretely than words can.

Yet, it is not only the Dow—spewing daily evidence of infrequent rallies and steady declines—that reflects what is happening in America, and abroad, these days. Another, newer measure, the Gallup-Healthways Well-Being Index, tells the story of a global economic crisis in the language of psychologists: the human toll, the effect that the financial downturn is having on people.

“We’re in a happiness recession,” says economist Justin Wolfers, associate professor of business and public policy at the University of Pennsylvania’s Wharton School. “We have found the most robust determinant of happiness to be the current state of the economic cycle.”

Dr. Wolfers and colleague Betsey Stevenson have studied three decades of data produced by the Gallup-Healthways Index and several earlier polls that measured subjective well-being (the Gallup World Poll, the World Values Survey, and the U.S. General Social Survey) and identified strong parallels between general well-being and the ups and downs of the economy. Low points plotted on their “happiness charts” occurred in 1973, 1982, 1992, and 2001, each a year at the center of an economic recession.

Many psychologists, however, are quick to distinguish the current economic crisis from previous recessions. Dr. Nancy Molitor, a psychologist in private practice in Wilmette, Ill., and a public education coordinator for the American Psychological Association (APA), says that the levels of stress she is seeing in “virtually all” of her clients exceed anything she has seen in 22 years of practice.

“It’s hit everyone—CEOs, teachers, small-business owners, whether they’re 25 or 65,” she says. “It’s far worse than after 9/11. Then, there was a bad guy to blame and it gave everyone a common purpose. And after a while, anxiety began to fade because what had happened was in the past. But now, there’s no end in sight, and no clear fix that people can pin their hopes on.”

As it has become increasingly apparent that the recession is a reality that cannot be ignored, Dr. Molitor says that she has watched the condition of her clients steadily deteriorate.

“In the fall, I saw a lot of anxiety as the economy worsened. But now what I see is depression, and often absolute despair. People are terrified—terrified of losing their jobs or their houses, terrified of needing help and not being able to afford it. People aren’t interested in the deep psychotherapy they used to come for—today it’s just about crisis management.”

Dr. Rosalind Dorlen, a psychologist in Summit, N.J., agrees. Summit’s location—directly across the Hudson River from Wall Street—places her practice at “the epicenter of the financial downturn” and accounts for the large number of investment professionals among her clients.

“I’ve had many clients who have lost their jobs, and at least one whom I had to hospitalize because he let his drinking get so out of control after losing his job. Hitting bottom has sparked such intense reactions in so many. I have no patients who are not affected.”

Clients who are turning to psychology professionals for help in navigating the emotional consequences of the recession run the gamut: out-of-work executives brought in by their spouses because they were unable to pull themselves together enough to make the appointment; workers who still have jobs but live in fear of being included in the next round of company layoffs; sixty-somethings who have saved diligently for retirement only to find their 401(k)s worth a fraction of what they had anticipated.

For many on the brink of retirement, it’s about more than their withered stock portfolios though, Dr. Molitor says. Often they find themselves stuck with a big house that they can’t sell, adult children who are losing their jobs and moving back home and—because they have lost their nest eggs and can no longer afford to retire—fear of losing their own jobs.

The stress that psychologists are seeing was documented in a recent APA report, “Stress in America,” published in October 2008. While data for the study was collected before the brunt of the financial meltdown, it demonstrates Americans’ growing concern about the economy and their ability to provide for their families. Nearly half of those surveyed reported that their stress level had “increased significantly” over the past year, with as many as 30 percent rating their average stress levels as “extreme.” Money and the economy topped the list of stressors for eight out of 10 people surveyed, and those concerns increased steadily during the six-month datacollection period. Stress about the economy jumped from 66 percent in April to 80 percent in September, while concern over housing costs increased from 56 percent to 62 percent, and job stability fears rose from 48 percent to 56 percent.

The Gallup-Healthways Index confirms the stress levels documented by APA, stating its findings in terms of the percentage of Americans who are “thriving,” “struggling,” and “suffering.” In early November—just weeks after the Lehman Brothers collapse that many point to as the pivotal point in the crumbling economy—the poll showed that 60 percent of Americans were struggling, up a full 14 percentage points from January. At the same time, the weekly average of thriving Americans hit a new low of 36 percent. Meanwhile, the percentage of people suffering—unable to afford the bare necessities—has inched up from 4 to 5 percent.

The Gallup data is particularly significant because of its magnitude. Since January 2008—when the index was launched—1,000 individuals have been surveyed every day. With 350,000 annual interviews to work with, researchers have access to exceptionally rich data that can be “sliced and diced” in numerous ways. The questions asked provide information for six separate indexes, including two—a mood scale and a life evaluation scale—that feed into the happiness numbers.

“Both are pretty sensitive to the economy,” says Jim Harter, chief scientist for workplace management and well-being at Gallup. “Life evaluation is intended as a more long-term measure—meant to gauge how people feel about how their lives will be five years out. Mood, on the other hand, reflects the daily ups and downs that we all experience.”

November and December represented the lowest points for life evaluation, he said.

“But while mood bounced up and down and hit all-time lows in early February, we saw the life evaluation numbers gradually climb as we approached—and then passed—the presidential inauguration. The numbers coincided with Obama’s approval rating and, I think, reflected the hope people were beginning to have for the future.”

In Dr. Harter’s view, the most significant finding has been the “sheer amount of fluctuation” that occurs in the mood of the country—plummeting from a high of 67 percent reporting “a lot of happiness without a lot of stress” on Thanksgiving to 35 percent on the days when the most troubling economic announcements were made.

A Burden on Psychologists
The implications for the psychology profession are enormous, Dr. Harter says. Because many people identify their workplaces as major sources of stress, he suggests using that knowledge to design more positive workplaces—places where people can connect and satisfy their basic human needs for socialization.

“If we know what makes a good day for people, interventions can be designed that make more of those good days come about. We know that the best predictor of daily mood is the amount of social interaction time a person spends, and that it takes six to seven hours of social time to optimize a day. If the person works in a negative environment, it takes even more.”

Evidence of the correlation between the financial crisis and wellbeing goes beyond the numbers produced by surveys, with requests for therapists’ services continuing to increase as the economy has faltered. At the end of 2008, ComPsych—the world’s largest provider of employee assistance programs—reported that requests for psychological assistance had risen by almost 20 percent in the last three months. The company’s CEO, Richard Chaifetz, attributed the increase to mounting concerns about the financial situation.

APA has responded to increased stress levels with a public education campaign, through which information on coping with the economic crisis and its impact is disseminated. Professional psychologists report that they are networking more than ever in an effort to share strategies for helping their most distressed clients and dealing with the dramatic increased demand for psychological services.

“We’re working to get the message out that there are ways to manage stress, both for clients and therapists,” says Dr. Dorlen, who, in addition to her private practice, coordinates regional public education activities for APA.

“Psychology is not a bullet-proof profession,” she says. “Those of us in the trenches practicing psychology have been affected as well. Even those who haven’t yet been directly impacted by declining reimbursements and patients’ inability to pay for services are experiencing anxiety about their practices.” To address the challenges that her colleagues are facing, she has compiled a list of strategies for practicing psychology in an economic crisis, published in the January/February issue of The National Psychologist.

The increasing demand for mental health services has hit nonprofit organizations as well as private practitioners. At Pillars, a Chicago-based social service agency that provides a wide variety of integrated behavioral health and educational services, the requests for crisis intervention services resulting from financial stress have tripled in recent months.

“We’re seeing more requests from people who are homeless, in need of food, and suffering from depression or anxiety due to job loss, financial stress, and foreclosure,” says John Shustitzky, president and CEO of Pillars. “We currently have a waiting list of more than 100 people, a situation that is made even worse by the fact that funding cuts have forced us to eliminate 30 staff positions. This means fewer available clinical hours, and increased caseloads—and stress levels—for the staff who remain.”

Connecting Psychology and Health

A long-term consequence of recession-fueled stress that many psychologists fear is the impact on the population’s overall health. Some turn to alcohol and drugs as coping mechanisms, while others allow healthy eating and exercise habits to fall victim to deflated moods and decreased motivation.

“Gallup’s next big well-being project is an in-depth analysis of the relationship between psychology and health,” Gallup’s Dr. Harter says. “We know that psychological outlook is a leading indicator of healthy behavior, but we want to understand more about how our good or bad moods might impact our physical health.”

The Well-Being Thermometer: What it Measures
The Gallup-Healthways Well-Being Index™ is a daily report that functions much like the Dow-Jones industrial average. At least 1,000 individual interviews are collected every day, 350 days a year, and the data is used to provide a comprehensive, real-time view of the public’s well-being in the United States and abroad. Gallup terms it “the most ambitious effort ever undertaken to measure what people believe constitutes a good life.”

In APA’s “Stress in America” survey, 77 percent of respondents reported stress-related physical symptoms, including fatigue, headaches, and upset stomachs. And while a majority reported knowing that exercise is valuable in reducing stress and maintaining health, many cited more sedentary activities—such as listening to music, watching television, or reading—as the activities they chose to manage stress.

The gap between knowing what to do and actually doing it is not confined to eating habits and fitness regimens though. Despite widespread (69 percent of those surveyed in the APA poll) recognition of the benefits of mental health support, only 7 percent sought professional help to manage the stress of the past year.

“It’s often difficult for someone—especially someone used to a position of authority at work or in the family—to seek help,” says Dr. Michael Komie, affiliate professor of clinical psychology at The Chicago School. “They’re used to being in control and so much of their identity is tied to that role; sometimes they just can’t get beyond it. If they do reach out for support, they’re often more comfortable with what they regard as a natural support system—a church, synagogue, or mosque. When I do get calls to meet with them, they’re likely to come from a family member.”

During his years in private practice and as a vocational consultant to the St. James Cathedral Counseling Center in Chicago, Dr. Komie has worked often with the casualties of corporate downsizing, factory layoffs, and small business failures. He has witnessed the varying impact the economic hardship has had across demographics—blue-collar workers and white-collar professionals; men and women; Gen Xers, Boomers, and seniors; Caucasians, Asians, Latinos, African-Americans, and immigrants.

A white-collar Baby Boomer who has never seriously contemplated unemployment can face a more complicated coping challenge than a blue-collar worker who is paid by the hour and accustomed to more cyclical employment.

While the response to job loss doesn’t vary greatly, Dr. Komie says, different demographic groups rely on different coping mechanisms.

“A white-collar Baby Boomer who has never seriously contemplated unemployment can face a more complicated coping challenge than a blue-collar worker who is paid by the hour and accustomed to more cyclical employment,” he says, adding that the task of finding new employment isn’t as daunting for someone who has been through it before and expects to do it again. This is particularly concerning, he says, because—as the nation has moved from a manufacturing economy to a service-based economy—layoffs are more than twice as likely to affect white-collar jobs as they were several decades ago.

While the APA survey reported that women are bearing the psychological brunt of the economic crisis—reporting higher levels of stress than men—Dr. Komie finds them to be more resilient in cases of job loss.

“Women tend to be more flexible about their work identities, largely because they’re used to balancing multiple social roles,” he says. “Men, especially the older men, see themselves as the breadwinner, and are much more likely to respond with a sense of guilt and shame that they’re not able to support their family.”

Psychologists and economists alike agree that the current economic crisis has wielded a larger—and less class-conscious —blow on national well-being than earlier recessions. No longer a predicament of the working class alone, the recession of 2008-2009 has proved itself an equal-opportunity enemy.

“This is the first recession where the middle class has been as affected as the people working low-skill jobs,” Dr. Wolfers says, adding that the ramifications are being felt across age and cultural groups and documented in terms of both fiscal and emotional well-being.

The “happiness recession,” which he proclaimed when discussing his analysis of Gallup-Healthways data, is likely to be with us for a while, Dr. Wolfers says. Moods and life satisfaction measures are likely to continue mimicking the contours of more dollar-centric indexes, but as things start to improve, life evaluation may show itself to be a step ahead of the Dow.

“Well-being tends to be forward-looking,” he says. “A lot of it is rooted in expectation.”