Toxic Workplaces Are Bad for Mental and Physical Health, Surgeon General Says
A mentally healthy workplace includes growth opportunities, work-life balance and community, according to America’s doctor
A mentally healthy workplace includes growth opportunities, work-life balance and community, according to America’s doctor
The U.S. surgeon general is telling Americans for the first time that disrespectful or cutthroat workplaces could be hazardous to their health.
Surgeon General Vivek Murthy’s office—which is more often associated with warnings about nicotine, Zika and the Covid-19 pandemic—issued a guidance Thursday outlining how long hours, limited autonomy and low wages can affect workers’ health and organisational performance. Chronic stress disrupts sleep, increases vulnerability to infection and has been linked to conditions ranging from heart disease to depression, the document said, citing research from the American Psychological Association and a Stanford University psychologist.
“Toxic workplaces are harmful to workers—to their mental health, and it turns out, to their physical health as well,” Dr. Murthy said.
The surgeon general’s guidance on the role of the workplace in well-being comes as many workers report work stress and difficulty concentrating. Meanwhile, companies have stepped up spending on mental-health and well-being benefits in recent years.
Recommendations in the surgeon general’s release include asking workplace leaders to listen to workers about their needs, increasing pay and limiting communications outside of work hours. A mentally healthy workplace, according to the framework, includes growth opportunities, work-life balance, community, protection from harm and employee influence on workplace decisions.
“People are asking themselves what they want out of work,” Dr. Murthy said. “They’re also asking themselves what they’re willing to sacrifice for work, and the fundamental questions are reshaping people’s relationships with the workplace.”
The statement comes as several million people, many of whom are women, lacking a college degree and working in low-paying fields, are expected to remain out of the labor force indefinitely, researchers say. About 80% of the roughly 11,300 workers surveyed between 2020 and 2021 by Mental Health America said that work stress affects relationships with friends, family and co-workers. While 46% of respondents said in 2018 that they had trouble concentrating at work, 65% did in 2020 and 71% did in 2021. The survey cited the pandemic as one potential contributor to this shift.
Alexia Rowe, 25 years old, works at a box office in Cambridge, Mass. Earlier this year, when a show was rescheduled, she called ticket holders to share the news. A patron began screaming at her, Ms. Rowe said. The next morning, she felt a wave of anxiety.
A manager allowed her to take a break from making calls, she said.
“If I leave this position,” she said, “I’m not going to find a manager that’s like her.”
Of more than 2,000 workers surveyed by the American Psychological Association in April and May, 18% described their workplace as somewhat or very toxic, and 30% said they had experienced harassment, verbal abuse or physical violence at work, including from customers.
Companies have been channeling more resources toward employee mental health. The 372-employee software company Kajabi asks employees regularly whether they have energy for family time after work or if they feel their workload is in line with their level and skill set. Samantha Matthews, vice president of people operations, said between the last quarter of 2021 and the second quarter of this year, responses trended negative.
Kajabi, which is based in Irvine, Calif., hired about a dozen people to teams that were understaffed, Ms. Matthews said. The company also spent about $17,000 in one quarter on wellness benefits, including an expanded employee-assistance program offering three free therapy sessions and seven weeks of courses from an outside vendor related to mental wellness and burnout.
Managers also encourage employees to take paid time off after big projects launch, she said.
“People are adults,” she said. “They take the time that they need, and they’re here when they don’t need it.”
Forty percent of 563 companies with at least 100 employees and $1 million in annual revenue surveyed by the benefits-consulting firm NFP in February and March spent between $201 and $600 per employee on well-being, a category including programs such as mindfulness workshops and office fitness challenges, in 2021.
The surgeon general recommended that employers provide access to mental-health care as part of benefits packages, but the guidance goes beyond specific services and links broader aspects of work, such as pay and autonomy, to well being.
“When I talk to employers, they all acknowledge that mental health and well-being are top concerns of theirs,” said Ron Goetzel, director of the Institute for Health and Productivity Studies at the Johns Hopkins Bloomberg School of Public Health. “This has come up into the C-suite, more so than ever before.”
Dr. Goetzel said employers are motivated to pay attention to these issues if they can’t fill jobs, adding that the costs of prevention are small compared with treatment.
Paige Kerr, an office manager in Bensenville, Ill., juggled a heavy workload earlier this year. Her company was getting acquired while she was working through a custody dispute for her young son, and she called in sick several times. Feeling disengaged was unusual for Ms. Kerr, 27, who said she rarely took time off.
“I was putting more effort into not doing the work, versus just doing it,” she said.
In September, her manager told her he felt her performance had diminished, and that her negativity affected colleagues. He urged her to take a week of paid time off. Ms. Kerr turned off her Slack notifications and, after a few days, stopped checking email.
She registered her son for daycare and worked through court paperwork—things that, after a long day of work, had been last on her list.
After the vacation, she said, it no longer felt “like the world’s caving in.” She said she has felt more optimistic and engaged at the office.
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Equities are often seen as expensive after promising start to 2023
A new trading year kicked off just weeks ago. Already it bears little resemblance to the carnage of 2022.
After languishing throughout last year, growth stocks have zoomed higher. Tesla Inc. and Nvidia Corp., for example, have jumped more than 30%. The outlook for bonds is brightening after a historic rout. Even bitcoin has rallied, despite ongoing effects from the collapse of the crypto exchange FTX.
The rebound has been driven by renewed optimism about the global economic outlook. Investors have embraced signs that inflation has peaked in the U.S. and abroad. Many are hoping that next week the Federal Reserve will slow its pace of interest-rate increases yet again. China’s lifting of Covid-19 restrictions pleasantly surprised many traders who have welcomed the move as a sign that more growth is ahead.
Still, risks loom large. Many investors aren’t convinced that the rebound is sustainable. Some are worried about stretched stock valuations, or whether corporate earnings will face more pain down the road. Others are fretting that markets aren’t fully pricing in the possibility of a recession, or what might happen if the Fed continues to fight inflation longer than currently anticipated.
We asked five investors to share how they are positioning for that uncertainty and where they think markets could be headed next. Here is what they said:
Cliff Asness, founder of AQR Capital Management, acknowledges that he wasn’t expecting the run in speculative stocks and digital currencies that has swept markets to kick off 2023.
Bitcoin prices have jumped around 40%. Some of the stocks that are the most heavily bet against on Wall Street are sitting on double-digit gains. Carvana Co. has soared nearly 64%, while MicroStrategy Inc. has surged more than 80%. Cathie Wood‘s ARK Innovation ETF has gained about 29%.
If the past few years have taught Mr. Asness anything, it is to be prepared for such run-ups to last much longer than expected. His lesson from the euphoria regarding risky trades in 2020 and 2021? Don’t count out the chance that the frenzy will return again, he said.
“It could be that there are still these crazy animal spirits out there,” Mr. Asness said.
Still, he said that hasn’t changed his conviction that cheaper stocks in the market, known as value stocks, are bound to keep soaring past their peers. There might be short spurts of outperformance for more-expensive slices of the market, as seen in January. But over the long term, he is sticking to his bet that value stocks will beat growth stocks. He is expecting a volatile, but profitable, stretch for the trade.
“I love the value trade,” Mr. Asness said. “We sing about it to our clients.”
For Richard Benson, co-chief investment officer of Millennium Global Investments Ltd., no single trade was more important last year than the blistering rise of the U.S. dollar.
Once a relatively placid area of markets following the 2008 financial crisis, currencies have found renewed focus from Wall Street and Main Street. Last year the dollar’s unrelenting rise dented multinational companies’ profits, exacerbated inflation for countries that import American goods and repeatedly surprised some traders who believed the greenback couldn’t keep rallying so fast.
The factors that spurred the dollar’s rise are now contributing to its fall. Ebbing inflation and expectations of slower interest-rate increases from the Fed have sent the dollar down 1.7% this year, as measured by the WSJ Dollar Index.
Mr. Benson is betting more pain for the dollar is ahead and sees the greenback weakening between 3% and 5% over the next three to six months.
“When the biggest central bank in the world is on the move, look at everything through their lens and don’t get distracted,” said Mr. Benson of the London-based currency fund manager, regarding the Fed.
This year Mr. Benson expects the dollar’s fall to ripple similarly far and wide across global economies and markets.
“I don’t see many people complaining about a weaker dollar” over the next few months, he said. “If the dollar is falling, that economic setup should also mean that tech stocks should do quite well.”
Mr. Benson said he expects the dollar’s fall to brighten the outlook for some emerging- market assets, and he is betting on China’s offshore yuan as the country’s economy reopens. He sees the euro strengthening versus the dollar if the eurozone’s economy continues to fare better than expected.
Even after the S&P 500 fell 15% from its record high reached in January 2022, U.S. stocks still look expensive, said Rupal Bhansali, chief investment officer of Ariel Investments, who oversees $6.7 billion in assets.
Of course, the market doesn’t appear as frothy as it did for much of 2020 and 2021, but she said she expects a steeper correction in prices ahead.
The broad stock-market gauge recently traded at 17.9 times its projected earnings over the next 12 months, according to FactSet. That is below the high of around 24 hit in late 2020, but above the historical average over the past 20 years of 15.7, FactSet data show.
“The old habit was buy the dip,” Ms. Bhansali said. “The new habit should be sell the rip.”
One reason Ms. Bhansali said the selloff might not be over yet? The market is still underestimating the Fed.
Investors repeatedly mispriced how fast the Fed would move in 2022, wrongly expecting the central bank to ease up on its rate increases. They were caught off guard by Fed Chair Jerome Powell‘s aggressive messages on interest rates. It stoked steep selloffs in the stock market, leading to the most turbulent year since the 2008 financial crisis. Now investors are making the same mistake again, Ms. Bhansali said.
Current stock valuations don’t reflect the big shift coming in central-bank policy, which she thinks will have to be more aggressive than many expect. Though broader measures of inflation have been falling, some slices, such as services inflation, have proved stickier. Ms. Bhansali is positioning for such areas as healthcare, which she thinks would be more insulated from a recession than the rest of the market, to outperform.
“The Fed is determined to win the war since they lost the battle,” Ms. Bhansali said.
Gone are the days when tumbling bond yields left investors with few alternatives to stocks. Finally, bonds are back, according to Niall O’Sullivan of Neuberger Berman, an investment manager overseeing about $427 billion in client assets at the end of 2022.
After a turbulent year for the fixed-income market in 2022, bonds have kicked off the new year on a more promising note. The Bloomberg U.S. Aggregate Bond Index—composed largely of U.S. Treasurys, highly rated corporate bonds and mortgage-backed securities—climbed 3% so far this year on a total return basis through Thursday’s close. That is the index’s best start to a year since it began in 1989, according to Dow Jones Market Data.
Mr. O’Sullivan, the chief investment officer of multi asset strategies for Europe, the Middle East and Africa at Neuberger Berman, said the single biggest conversation he is currently having with clients is how to increase fixed-income exposure.
“Strategically, the facts have changed. When you look at fixed income as an asset class…they’re now all providing yield, and possibly even more importantly, actual cash coupons of a meaningful size,” he said. “That is a very different world to the one we’ve been in for quite a long time.”
Mr. O’Sullivan said it is important to reconsider how much of an advantage stocks now hold over bonds, given what he believes are looming risks for the stock market. He predicts that inflation will be harder to wrangle than investors currently anticipate and that the Fed will hold its peak interest rate steady for longer than is currently expected. Even more worrying, he said, it will be harder for companies to continue passing on price increases to consumers, which means earnings could see bigger hits in the future.
“That is why we are wary on the equity side,” he said.
Among the products that Mr. O’Sullivan said he favours in the fixed-income space are higher-quality and shorter-term bonds. Still, he added, it is important for investors to find portfolio diversity outside bonds this year. For that, he said he views commodities as attractive, specifically metals such as copper, which could continue to benefit from China’s reopening.
Ramona Persaud, a portfolio manager at Fidelity Investments, said she can still identify bargains in a pricey market by looking in less-sanguine places. Find the fear, and find the value, she said.
“When fear really rises, you can buy some very well-run businesses,” she said.
Take Taiwan’s semiconductor companies. Concern over global trade and tensions with China have weighed on the shares of chip makers based on the island. But those fears have led many investors to overlook the competitive advantages those companies hold over rivals, she said.
“That is a good setup,” said Ms. Persaud, who considers herself a conservative value investor and manages more than $20 billion across several U.S. and Canadian funds.
The S&P 500 is trading above fair value, she said, which means “there just isn’t widespread opportunity,” and investors might be underestimating some of the risks that lie in waiting.
“That tells me the market is optimistic,” said Ms. Persaud. “That would be OK if the risks were not exogenous.”
Those challenges, whether rising interest rates and Fed policy or Russia’s war in Ukraine and concern over energy-security concerns in Europe, are complicated, and in many cases, interrelated.
It isn’t all bad news, she said. China ended its zero-Covid restrictions. A milder winter in Europe has blunted the effects of the war in Ukraine on energy prices and helped the continent sidestep recession, and inflation is slowing.
“These are reasons the market is so happy,” she said.
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