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Why is not working and having a job bad for your physical health?

It isn't. Some people who don't work also don't do anything else with themselves, and it's not doing anything at all that can cause one's health to deteriorate.

having a physically demanding job can be healthy physically, and exercise can make you feel better. but these do not often pay much, and the ones that do are often much less physically demanding, unless you're like, a professional athlete.

if you long to belong to something, then a secure job can be good for your mental health.

it isn't directly.

however, being jobless for an extended amount of time can be bad for your mental health (depression, oppressive boredom, that kind of things).
lowered mental health can reduce the effectiveness of your immune system, which in turn reduces your physical health.

note: this is a 'can', if you don't mind not working, the above is not true in your case, but it is a general risk for those with nothing to do during the day; volunteering in this case has the same effect as having a "real" job (for the mental health thing obviously, but i'm for convenience assuming you will get enough money to live by from social security if you don't work for money)