Mental health crisis costing Northern Virginia over $8 billion a year

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The mental health crisis is costing the Northern Virginia region $8 billion a year in unrealized economic output, according to a  new report from the Community Foundation for Northern Virginia.

The report from the foundation’s research arm, Insight Region, found that the economic loss caused by mental health has quadrupled since 2019, exacerbated by the COVID-19 pandemic that began in early 2020.

In 2019, worker mental health issues cost the region about 1% in productivity – the equivalent of $2.1 billion – in potential gross regional product (GRP). About 11% of working adults were experiencing mild anxiety or depression in that timeframe.

However, during the pandemic, more than half of all workers reported levels of anxiety or depression. As of May 2023, that statistic held with 53% of the workforce struggling.

The elevated levels of mental health needs caused productivity losses to increase by 2.1 percentage points – or over $8 billion in potential GRP each year, according to the report.

Millions of Americans exited the workforce over the last three years, and one in four blamed their departure on mental health, the report says. That lost employment negatively impacts more than just the worker and their family.

“It also affects team members who must compensate for the lost output; employers who bear the cost of recruiting, hiring, and onboarding new staff; and the local economy in unrealized gross regional product.”

Most workers with anxiety and depression stay on the job, meaning some of the lost productivity can be attributed to absenteeism and presenteeism – or an employee who is technically on the job but not engaged. This lack of engagement can often result in procrastination and missed deadlines.

Overall, for every worker with a mental health need, their team can expect total productivity to decline by 5% to 13%, or two to five lost hours in a 40-hour work week, according to the report. “These behaviors can lead to a precipitous decline in productivity, at rates far higher than other conditions.”

The Community Foundation collaborated on the research with George Mason University. Keith Waters, assistant director at the university’s Center for Regional Analysis, presented the findings last week during an event at the foundation’s headquarters in Fairfax.

Waters said the research showed that as mental health issues become more severe, so do productivity losses.

“As you go from sort of no mental health issues to more severe mental health issues, your productivity losses become more severe, you miss work more and then your presenteeism issues become more severe,” he added.

Waters noted that measuring productivity loss is difficult, especially in the professional and business services industries, which saw the greatest economic losses. Almost half of those workers reported struggling with mental health, with that industry recording a $2.3 billion loss in 2022.

The report noted that sectors with the highest level of need – including education and health services, trade, transportation and utilities – had rates of anxiety and depression in excess of 60% and also saw heavy losses in productivity.

Waters said if workers were more productive, the state would collect more taxes and be better equipped to support mental health needs.

“It would improve quality of life generally because you could provide other support,” he said.

To address the increase in anxiety and depression, the report says understanding the causes is imperative.

The report lists burnout at work and home and income insecurity as examples of stressors that contribute to anxiety and depression. And inadequate social support and self-support can contribute to a diminished ability to cope with those stresses.

“An individual’s ability to cope with stressors plays a crucial role in their mental health and is influenced in part by the strength and quality of their relationships (including those individuals’ ability to talk about and respond to a mental health challenge) and the individual’s ability to care for their own wellbeing,” the report reads.

Suggestions in addressing the mental health needs of workers include employers tackling mental health challenges through employee support programs and changes to workplace culture and policies.

“Helping workers minimize and manage stress – not just from occupational burnout, but from the strain of also being a parent, provider, student and caregiver – could be key to enhancing the region’s economic competitiveness,” the report states.

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