Employment Status Change and Its Impact on Mental Health, For

Racialized Groups
Introduction
When COVID-19 hit the Canadian economy, the country saw a rise in economic
hardship faced by individual citizens, accompanied by heightened concerns about the
public’s mental well-being. According to Ontario’s Labour Market Report, the
unemployment rate reached a high of 9.5% in 2020, as compared to 5.6% in 2019. The
number had gone down to 7.5% by the end of 2021 but was still under the
pre-COVID-19 level. In the midst of job losses, some pointed out that the unemployment
rate was higher for racialized groups. Derived from Statistics Canada’s Labour Force
Survey (LFS), data showed that from August to December 2020, among people aged
15 to 69 years, the unemployment rate was the highest (13%) for Black and Indigenous
Canadians, 11.3% for other racialized groups, and 7.4% for White Canadians that were
unemployed (Figure 1). In the meantime, the population faced a mental health crisis,
perhaps as a result of the economic downfall. The Centre for Addiction and Mental
Health (CAMH)’s survey found that on average, 25.1% of Canadians experienced
moderate to severe anxiety compared to 19% in the prior period; 22.3% of Canadians
experienced moderate to severely depressed feelings compared to 18.6% in the prior
period (Figure 2 and 3). Therefore, new questions arise as we consider the potential
racial factors behind the unemployment rate and the current situation on public mental
health. In this study, we aim to find if the rising unemployment dilemma is more severe
for racialized groups; furthermore, if there is an association between unemployment and
deteriorating mental health conditions. Depending on the results, we will comment on if
racialized groups are more prone to the mental damages caused by unemployment.
Finally, we will implement further economic and policy discussion on the issues relating
to racialized minority mental health conditions as an impact of labor inequality.
Figure 1

Figure 2
 Figure 3
Methods
The first dataset used in this study is from CAMH national survey on mental
health and employment status. To align with our unemployment by racialized groups
data, we will set the time period that covers August to December 2020. In the survey
that has a sample size of 1005 respondents, the question “On average, how has the
number of hours you are working for pay been affected by the COVID-19 pandemic?” is
used as a measure to assess the individual’s employment status, and we use the
answer “decreased somewhat” and “decreased a lot” as indicators for negative change
in employment status. The values of these answers are assigned as 4 and 5 to
represent increased instability in employment status, whereas those whose answers to
this question were “increased a lot / somewhat” or “unchanged” is assigned with lower
scores (1-3). In the same survey, individuals who answered that they felt depressed for
a moderate amount of time (3-4 days) and most or all the time in the past seven days
are selected as subjects who have high mental issue scores, 3 and 4. Those who
answered “rarely or none of the time” and “some or little time” would be labeled with a
lower scores of 1 and 2. We run a linear regression that takes the employment status
change as the independent variable and mental health status as the responding
variable and see if the result is significant to indicate a correlation between high
unemployment scores (increased employment instability) and high mental issue scores
(worsened mental condition).
On the other hand, we use the Labor Force Survey (LFS) dataset provided by
Statistics Canada to find out if there is a correlation between
race and the unemployment rate for those aged 15 to 69. For the briefness of this study,
we will only examine the Black population, which consists of Canada’s third most
populated racial minority (Census 2016). In the same time period, we run a two-sample
z-test to compare the unemployment rate of Black Canadians vs. Caucasian
Canadians. Our null hypothesis is that there is no difference in the unemployment rate
for Black and Caucasian groups. Our alternative hypothesis is that there is a difference
in the unemployment rate for the Black and Caucasian populations. For both analyses,
we set the alpha level to 0.05.

Results
The result from the linear regression is statistically significant with a p-value of
0.00087, which is small enough to indicate a significant result, and the slope value is
0.093 (Figure 4). We can interpret this as on average, one unit of increased
employment status score change (the answers that indicate decreased working hours)
would result in an increase of 0.093 in the mental issue score (feeling
more depressed/worsened mental condition). Our two sample t-test tests two samples
drawn from both Black and Caucasian respondents from the national Labor Force
Survey, with a sample size of 1400 and 2173 respectively. The unemployment rate for
the Caucasian group is 9.3% and 16.8% for the Black group. The test shows a
significant p-value of 0.00020 which is evident to reject the null hypothesis. In other
words, there is statistically enough evidence to show a difference in the unemployment
rate between Black and Caucasian Canadians. Figure 5 shows the unemployment rate
grouped by racialized groups from the Labor Force Survey data. The non-visible
minority group has the lowest unemployment rate, while the Black population suffers a
much higher unemployment rate, along with other visible minority groups.

Figure 4

Figure 5
 Incorporating the results, we can conclude that our data presents a positive
correlation between increased unemployment / negative changes in employment status
and increased psychological stress; also a gap in the unemployment rate that put
racialized groups into bigger danger of job loss.

Discussions and conclusion

We recognize several limitations in this study. First, although the two data
analyses both reflect significant results and trends, we cannot establish causality
between racial disadvantage in labor participation and deteriorated mental health
conditions. However, we may infer that there could be a huge possibility of such a
correlation based on our results. Studies have shown that when certain racial
populations are socially disadvantaged, including being discriminated against in
employment, they can suffer from adverse impacts on mental health (Williams 2018).
Based on these interpretations, policymakers could focus on reinforcing legal
institutions and frameworks that support equal labor standards. Evidence has proven
that racial inequalities are largely observed in fields related to innovation and invention
(Cook 2020). Misallocating talents is costly to productivity and the macroeconomy as a
whole. Also, a falling aggregate unemployment rate (often a result of a ‘hot’ labor
market and generally strong macroeconomic performance) is helpful in closing the gaps
in labor market outcomes between visible minority workers and white workers
(Aaronson et al. 2021). Thus, promoting policies that encourage minority groups in the
innovation industry will likely increase productivity and the whole macroeconomic
activities as well, and thereby reduce the socioeconomic inequalities faced by the
minority groups. For example, the government may pass laws that prevent companies
from making ‘race’ a mandatory part of the resume / basic information of the people
they are hiring. Increasing social awareness of racial equality in job training and
education is crucial as well. Moreover, during economic unstable periods like
COVID-19, the government should consider subsidizing businesses owned by people of
color, and make priorities for communities and areas with low-income means and a
significant population of visible minorities. In industries where a lot of racialized groups
and immigrants (who are largely persons of color) make up the workforce, for example,
the food service industry (Figure 6, Statistics Canada 2017), the government should aim
to improve job benefits and security through more strict legal surveillance on food
service companies. Last but not least, since we previously discussed the possibility for
racialized groups to experience more mental hardship, the government could relocate
more funds for mental help programs in the areas with a high visible minority population.

Figure 6
Other shortcomings in our study include using decreased working hours as an
indication of a negative change in employment status. Decreased working hours do not
necessarily have the same impact on an individual’s income and life security as
unemployment. The time frame we have selected is rather short to acquire a long-term
insight into racialized inequality of unemployment.
Although our study cannot establish the causality between worsened mental
health conditions and unemployment due to racial discrimination, however, we have
presented enough evidence to show how racialized minorities are at greater risk when
economic downfalls like the pandemic hit the labor market and a correlation between
decreased working hours and mental stress. Improving equality for all is an important
step towards a better performance of the macroeconomy. Racial disparities are often
implicit and persistent in many economic behaviors, and policymakers should act boldly
to bring more substantial structural changes to create an equal economy for all.
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