It’s no news that the world is descending into hard times. The Russian - Ukraine conflict and the increase in energy prices, coupled with the remnants of the economic disruption left behind by the pandemic, have driven up prices everywhere, including staples, life expenditures and miscellaneous spendings. Whether you belong to the wealthy or the poor, everyone is experiencing the pinch to a certain degree, some lesser than others. As living costs soar while our spending power dips, it can be unnerving for us to think about what tomorrow holds, let alone the future ahead. These are truly stressful times to live in, and darker days loom ahead of us as we edge closer to the end of the year.
The chain effect
To first understand how our livelihoods are impacted, we first must acknowledge the impact of geopolitical tensions in our lives. Historically, geopolitical tensions such as the Russia - Ukraine conflict have posed adverse effects to the whole world. The conflict produces a spillover effect that affects the neighboring countries, which inevitably drives up energy costs. Energy is a key resource used in production, and according to a study published by the Federal Reserve Government, rising energy costs affect automobile, FMCGs, energy & foods-producing industries/countries the most. This culminates in a rise in production costs, and the effect trickles down to the global supply chain, to all businesses, and finally to ourselves, the consumers. In the FED’s words,
“...elevated geopolitical risks have been associated with sizable negative effects on global economic activity.6 Wars destroy human and physical capital, shift resources to less efficient uses, divert international trade and capital flows, and disrupt global supply chains. Additionally, changing perceptions about the range of outcomes of adverse geopolitical events may further weigh on economic activity by delaying firms' investment and hiring, eroding consumer confidence, and tightening financial conditions.”
According to the FED, automobile, FMCGs, energy & goods are the most affected by geopolitical services, while services are affected to a slightly lesser, though nonetheless noticeable extent. Image and findings courtesy of the FED
Similarly, the COVID-19 pandemic that took place two years ago and has since lingered in our lives crippled many businesses, has crippled the global supply chain in a similar manner. There are still individuals and businesses out there that have yet to rebound safely from the ordeal, and the presence of the war only results in a double whammy for them.
In short, both notable events have economically displaced many businesses and individuals globally. Cost productions have increased tremendously, which elevates production cost substantially and forces suppliers to transfer these costs to the consumers, otherwise known as the eponymous inflation.
Affecting our mental health
The rise of living costs is a byproduct of two well-known phenomena - Inflation and Recession. Inflation, as we have discussed above, is when the prices of goods greatly overshadows consumers’ spending power and their ability to afford them. Meanwhile, recession is the prolonged dip in economic activity, resulting from a lack of trade and industrial activities including buying power, which causes the country to experience a downturn in GDP, a key indicator used to assess a country’s economic performance and wellbeing. The effect is cyclical and creates a chain effect that creeps to everyone.
A much less discussed effect that the waning economy has on us, is how it affects our mental health. According to the UK Charity Crisis, 69% of UK individuals suffer from depression as a result of rising living costs. Another study, conducted by PYMNTS showed that 58% of Americans are living paycheck-to-paycheck due to a rise in living costs, further reinforcing the idea that rising living costs negatively affects people. Meanwhile, an Australian survey conducted by Suicide Prevention Australia found that increased suicide rates, sitting approximately at 68 ~ 74% for Australians are largely attributed to personal debts and rise in living costs. Clearly, this demonstrates that rising living costs pose a serious effect to everyone globally.
Here are some other commonly known negative health effects that rising living costs bring to our lives.
Individuals who are financially troubled experience sleepless nights due to the constant worries of being able to pay their mounting bills. Others may resort to excessive sleeping as a way to “escape” their problems.
People who are financially struggling have reported feeling depressed and despairing, they also demonstrate the inability to focus and make informed decisions that aid their financial wellbeing. Reduced spending power strips people of the ability to afford themselves necessities and luxuries that contribute to their overall happiness. The need to scrutinize your spending and look at the price tag before making a purchase is a psychologically denting one.
Aside from the constant worry and fear of being able to foot their bills, financial insecurity can cause individuals to experience anxiety symptoms including palpitations, increased heart rate and most notably panic attacks.
Individuals who worry about their financial wellbeing may develop compulsive eating habits to curb their anxiety and depressive episodes, that is to overeat and undereat. This leads to weight gain or being underweight. The habit may eventually lead to worse problems such as GERD, bulimia/anorexia or malnutrition.
When it concerns money, money can be a contentious AND contemptuous subject between one’s spouse, family members and friends. Financial struggles can stir up frequent arguments in couples and families with a healthy relationship, leading people to cut ties or separate from their loved ones.
Physical health problems
People who experience financial difficulties may neglect or delay seeking treatment for physical health problems in fear of incurring additional expenses, this may result in more potentially life-threatening conditions if left unresolved.
In other individuals, financial struggles prevent them from seeking early interventions to otherwise minor conditions that could be corrected before it progresses into something worse.
People who experience financial difficulties are more likely to withdraw themselves from their social circle due to the stigma surrounding the topic. They may develop a sense of low self-esteem, are more likely to bottle their issues up and put up a front in the presence of their friends. To avoid being questioned or gossiped among their social circle, these individuals consciously remove themselves from social events. The lack of social interaction then causes depression and anxiety as we’ve discussed above.
Overall, the rise in living costs may result in other conditions not discussed above such as reduced quality of life, inability to adapt to current lifestyle, the development of other compulsive behaviors including but not limited to excessive wailing or crying, hair pulling, trembling of fingers and drinking issues to name a few. Evidently, the rise of living costs is stressful for many, and its effects are innumerable.
Helping people cope with mental health-related issues
Tackling rising living costs and alleviating the accompanying issues is no easy feat. The effort requires coordination and cooperation from all parties ranging from a macro to micro level to overcome the issue. The government, organizations and the community all have a part to play in tackling the issue. Here’s our surface-level take on things.
For starters, creating a more accessible Universal Credit system will enable people to obtain the financial aid they need to overcome the hurdle. Increasing the cap on tax incentives will also create leeway for financially-struggling individuals to cope with their expenditures whilst lowering the overall tax contribution they need to pay in these difficult times. Tax subsidies should be granted to businesses to help alleviate production costs. Lastly, tax levies can be extended to provide breathing room for struggling individuals and businesses to cope with the rising living costs.
Organizations need to aggressively push for mental health awareness to the public, and urge the government to create more easily accessible mental health care services for the public to utilize. Proving Employment Assistance Programs for struggling employees to seek help can also provide an avenue for them to tackle mental health challenges in life.
On a communal level, practicing kindness and empathy, learning to offer a helping hand to one another may help everyone get through these tough times. Banding together is key to coming out stronger with rising living costs. Even checking in with your neighbors and loved ones to assure them of your presence and continued support serve as a buffer to mental health-related issues.
You are never alone…
These are undeniably hard times and we are all entrapped in the ensuing episode. And while the coming days and months are looking to be bleaker than usual, there is camaraderie to be found in times of hardship. Perhaps with a little support and human resilience, people can find it in them to overcome these times, one way or the other.