How does it effect the people?
The one labeling some one a "freak" or "loser" does it for the affect of feeling bigger, better, and empowered over the other person. This person tends to see faults in themselves and puts down others faults to help mask their own. (Or so they think) They tend to do this in order to boost their own self esteem.
The one being labeled such things gets effected by feeling small, belittled, and worthless under the other person. This person tends to become sad and think that all others see in them is their faults, and that they are beneath everyone. (Or so they think) They tend to acquire a low self esteem. [ Brandi_S's advice column | Ask Brandi_S A Question ]
andalixsays answered Sunday February 11 2007, 7:12 pm: People feel restricted because they feel like they need to live up to their label.
Ex: (Okay I'm not a fan of HSMusical but we watched it in chorus anddd) Troy was labeled as a jock, and he wanted to go out for the play, but felt like he couldn't because it was one or the other. And also with some of the other characters. [ andalixsays's advice column | Ask andalixsays A Question ]
Cux answered Sunday February 11 2007, 7:01 pm: It could cause people to question their status in school (or where ever its happening).
It effects them mentally because they feel unwanted or unliked (especially if the label is something negative).
Some are even driven to suicide or self-mutilation.
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