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Persons with mental illness, because we have a legitimate disability, should not feel bad about ourselves if unemployed.

Our society puts a great deal of value on employment. This is changing to an extent, since unemployment has become rampant. To many people's surprise, unemployment has become somewhat of an acceptable occupation. Furthermore, employment at a "good" volunteer job is often seen as more valuable than paid unskilled employment.

When seeking some type of employment or volunteer work, you might ask yourself if you are doing so in order to receive appreciation or to survive. These are two very different motivations. If you are trying to survive, go ahead and work at a carwash. If you're after respect from others, or from oneself, you should seek something more meaningful. (If things were ideal, a person would work at something mostly because they are interested in what they're doing. However that's off the subject of self-esteem.)

As a good starting point, why not learn to accept yourself, or even respect yourself, regardless of what you're doing or not doing? 

If the issue is self-acceptance, this can be accomplished through changing one's mind. If you just decide that you are unconditionally worthy, it will eliminate a lot of unnecessary work; or it can make a work attempt more likely to be successful. A job attempt (whether paid or unpaid) is more likely to succeed if not clouded by a deficiency in valuing oneself. If not trying to prove something to yourself or others, it is easier to just focus on the work.  

Most people find it easier to like and appreciate themselves when they are getting external recognition. Yet, regardless of being recognized or not, self-acceptance boils down to the content of the thoughts about oneself. 

Again, as persons with mental illness or with other disabilities we should not feel guilty or otherwise bad about ourselves if not employed. Most people with mental disabilities have some level of difficulty with work. And this includes many persons with mental illness who are extremely smart. 

There are numerous causes of low self esteem other than unemployment or underemployment. Someone could be upset with their self due to an issue of body image. The mass media promotes obsession with how we look. Having or not having a relationship is a common source of self-esteem problems. Either of these issues makes it more likely that people will unnecessarily punish themselves in trying to live up to some unattainable standard. 

Unconditional self-acceptance and self-appreciation can improve quality of life with no physical changes necessary. But let's not forget the five thousand pound elephant in the room--having a mental illness can be quite a blow to self esteem. 

Being mentally ill can entail having a negative perception of the self. This perception is a separate but collateral issue from the physical existence of the brain condition. And yet, if mentally ill, it is still possible to like and appreciate the self, and this does not require denying the fact of having the illness. 

An important step toward liking oneself is to stop identifying with the condition of your brain, and to instead identify with the person who owns and operates your brain--you. You are far more than just a diagnosis. 

The belief is widespread and false that you can't like yourself if your brain hypothetically has a defect. This is one out of several motives for noncompliance with treatment, often having tragic results. 

People should realize that having a mental illness should not preclude liking and respecting oneself. Society's standards that people are supposed to be "perfect," have no "defects" should be of "good stock," or should be able to survive if put on a deserted island, are false and cause a lot of unnecessary self-persecution. 

Self appreciation doesn't cost anything, and is achieved partly by deciding that you are worthy. If this seems difficult, you are probably in good company. Acceptance of the self can require internal work--this is best accomplished by consulting books on the subject or a psychologist.