Has COVID-19 exposed America’s happiness inequality?
The pandemic has disrupted not only people's financial stability—but also their peace of mind. We begin an exploration on the connection between money and happiness.
Editor’s note: Wealth and economic stability are key indicators of an individual’s—and a community’s—well-being. Wealth disparity, which has been growing for the past several decades, is becoming even more intensified due to the pandemic. Over the next several weeks, we will explore the connections between wealth and well-being, and we’ll hear from experts who will help us explain what it means for a community to be a place where residents can build their own version of the “American Dream.”
While the old adage is true that money can’t buy happiness—or guarantee mental well-being—there is a connection between a lack of resources and unhappiness. It’s one that’s becoming more pronounced due to income inequality and America’s widening wealth gap. A devastating global pandemic only further exposes these disparities.
Let’s take a look at some numbers. A recent poll from NPR reveals that a majority of households across major cities report serious financial problems. It is especially pronounced in households of color. In the city of Houston, for example, NPR found that 77 percent of Latino households and 81 percent of Black households reported financial trouble, compared to 34 percent of white respondents.
This financial divide is mirrored in people’s emotional well-being. A recent study from the Centers for Disease Control found that more than 40 percent of Americans are dealing with deteriorating mental health or substance use, with symptoms of anxiety and depression appearing in a quarter of the American population. Once again, this is worse for Black and Latino populations. The CDC researchers found that of those surveyed, 18 percent of Hispanic and 15 percent of Black respondents reported instances of suicidal thoughts, compared with 8 percent for white respondents.
At a time with so much uncertainty, it’s easy to understand how a healthy, stable income is a necessary ingredient to a person’s overall well-being. A happiness study conducted in 2018 found that globally, the average income for achieving emotional well-being was around $60,000 to $75,000, and $95,000 for reaching “life evaluation.” It’s the amount that researchers call “income satiation,” at which point any increase would not produce any meaningful benefits to happiness. In contrast, people who make far below that often struggle to achieve high levels of happiness.
“This helps individuals focus on the priorities in their lives—working hard enough to rise out of poverty can help, but after that the gains won’t be so large,” said study co-author Ed Diener, in an interview with the University of Utah about reaching the optimal happiness salary. “People might at that point start focusing a bit more on relationships and leisure and other rewarding activities besides earning more.”
The connection between money and happiness isn’t just on the individual level. Income inequality can have an effect on communities, too. Harvard Business Review reported in 2016 that higher rates of income inequality, or wealth concentrated among fewer people in society, the more likely citizens are to report increased negative emotional experiences and lower levels of life satisfaction. That same year, The World Happiness Report, found that the U.S. ranked 85th in Happiness Inequality, one of the highest levels of inequality among industrial countries, confirming that emotional well-being is spread unevenly throughout American society.
This is also seen on a smaller scale at the workplace. Studies have shown that unhappy workers are less productive and more likely to take longer sick leaves. Like everything else, unhappiness with work is exacerbated by the pandemic. In an interview with Vox in March, Stanford economist Nicholas Bloom predicted mass mental health issues and drops in productivity due to the pandemic.
Today, roughly 31 million Americans are claiming unemployment benefits, and the unemployment rate for August is 8.4 percent, but for Black people is 13 percent and 10 percent for Latinos.
As the pandemic wears on, it is likely that, in tandem with growing economic disparity, this happiness inequality gap will widen. We will continue to explore this topic in the coming weeks and bring in voices to help put some of these figures and larger themes of financial stability and well-being into context.