Australia has an economy that, in theory, works. And yet an article in The Age lays out an uncomfortable paradox: a relatively prosperous country growing steadily more pessimistic while options like One Nation gain ground right as the index combining unemployment and inflation climbs. I couldn't read the full piece behind the paywall, so I won't attribute specific data or positions to it. What matters is the question it leaves hanging, one that can actually be pursued with verifiable evidence: why does economic distress translate so directly into political discontent?
The usual explanation holds that people vote differently because their wallets hurt. It's intuitive and probably insufficient. A line of research led by Rafael Di Tella, Robert MacCulloch, and Andrew Oswald has spent years showing something counterintuitive: unemployment reduces subjective well-being with two to three times the force of inflation. The classic misery index adds them together as if they carried equal weight. The data suggests they shouldn't.
This changes the central question. If losing a job hurts several times more than watching the same income lose purchasing power, the damage isn't purely monetary. The subjective well-being literature consistently identifies the loss of status, purpose, and above all belonging. The finding holds across countries and decades. It hits even those who keep their jobs, because the mere fear of losing one already erodes morale even while the paycheck keeps arriving.
The study conducted in Marienthal during the 1930s offers a vivid picture. When the factory sustaining the Austrian community shut down, the first thing to collapse wasn't the household budget. It was the structure of the day. People stopped watching the clock. They lost reasons to leave the house at a set time, to run into others, to feel part of something ongoing. Unemployment emptied out calendars, and in emptying them, erased the place each person occupied in the lives of others.
Structures generate precarity as a byproduct of their own functioning. Nobody needs to wish harm on anyone's identity for that harm to occur: it simply hurts that way, and the design never accounts for the pain it produces. What Di Tella and his colleagues' findings add is that this identity fracture stays open. Any offer that delivers a new "us," sharp-edged and clearly bounded, finds a space ready to be occupied.
Two explanations for the rise of populism circulate in the strongest academic literature, and it treats them as complementary rather than competing. One highlights economic anxiety: those who lose stability seek simple answers to complex problems. The other, advanced by Pippa Norris and Ronald Inglehart, emphasizes cultural backlash: groups who sense their social position, values, and relative status eroding. These dynamics don't compete with each other, they activate each other. Material loss can intensify cultural sensitivities, and those sensitivities can shape exactly how that loss gets interpreted.
The psychological process linking both approaches to the well-being data is straightforward. When unemployment fractures belonging, any movement that restores a defined collective offers precisely what was lost. Not money. A place. This doesn't discredit anyone who chooses those options. It describes an ancient human need finding the most accessible answer available at that moment.
I've lost my job on several occasions. What stays clearest from those stretches isn't the financial anguish, though that was present too. It's the sudden feeling of being cut out of the conversation that used to be shared every day. Surviving without a paycheck is possible with savings, help, or time. Surviving without the "us" demands something else.
This dynamic confirms that structures can cause harm without any bad faith involved. Precarity opens an identity fracture. Then actors appear who, without having created it, find it available and capitalize on it. No conspiracy required. It's enough that the need to belong, which we've carried since forever, finds an offer the moment the previous one breaks.
One question remains that I still don't fully know how to answer: if the main cost of unemployment is one of identity, why do public policies remain almost exclusively monetary? Perhaps that vacuum of belonging is exactly the space populism occupies, because no one else has yet found an institutional way to fill it.
How might we rebuild that sense of collective place without manufacturing borders that exclude?
