Poverty in America and Happiness Talking Points

This article from the Christian Science Monitor explores new census data that shows that the poor in America own computers, dishwashers, and other appliances of convenience and amusement at historic rates. Naturally, the happiness question arises, and shows how journalists have been effectively propagandized into repeating a misleading, ideological happpiness talking point whenever good economic news arrives…

. . . by almost all measures, the data show rising well-being for all of society. And while the wealth gap may not be narrowing, the rich-poor gap in lifestyles has narrowed substantially since 1992 when measured in many of these tangible items.

“In terms of the items people have … it amazes me the number of people who are at or near the poverty line that have color TVs, cable, washer, dryer, microwave,” says Michael Cosgrove, an economist at the University of Dallas in Irving, Texas. That's not to ignore the hardships of poverty, he adds, “but the conveniences they have are in fact pretty good.”

Poor, but more comfortable
The study doesn't explore the happiness factor — whether the growing material prosperity is actually making people feel more satisfied with their lives. While economists tend to focus on things that can be measured in dollars and cents, the spiritual side of the economy has begun to garner more attention. That's partly because some research has found that once people gain a modest sufficiency in goods, further increases in income don't result in rising happiness.

This happiness talking point is extremely misleading. First, “don't result in rising happiness” obscures the fact that a large majority of poor Americans already report themselves as being pretty or very happy. I think many readers would interpet this as “doesn't do anything to pull people up from misery or unhappiness.” It would be less misleading to say “further increases in income don't result in happy people becoming even happier.”

Second, the talking point makes it sound as if there is some general finding that implies that a doubling of my salary would have no effect on my happiness. Which, of course, is total rubbish. We're talking about wealth within the United States, here. So, while the correlation between average income and average happiness is weak (though positive) over time or between countries–meaning that the average happiness at any given point in the distribution over the critical absolute threshold is likely to hold pretty steady over generations or between societies–the correlation within a given country at a given time is strong, and that's the relevant measure. Since everyone lives in a particular country at a particular time, what the research has found is that if your income increases, you are likely to get an increase in self-reported happiness. At any time and place, wealthier individuals will tend to be happier than less wealthy individuals.

Now, a rise in income sufficient only to maintain your position in the distribution will be unlikely make you much happier than you already are (unless your aspirations were low). However, through their prime working years, individual's incomes generally rise much faster than the economy grows (my income, to take a very typical example, has increased well more than 200% since I first entered the labor market). And so you can expect your rising income to have a very positive effect on your happiness through your working years, and throughout your life, if you have invested well. And this is just what the life-cycle happiness breakdown shows. It's our growing wealth that keeps our total satisfaction with life more or less steady as our satisfaction with health and family starts to declines in our our middle age.

Journalists need to understand that the “more money won't make you happier” talking point is, in fact, a piece of propaganda designed to weaken public support for wealth-enhancing policies. Once the data is framed correctly, there is really no reason to use the talking points. It does nothing to “balance” the story. Even if it is true that the microwaves and dishwashers of those beneath the poverty line aren't making them happier than they already were, they are freeing up time that would otherwise be spent on cooking and doing dishes. And that's just good.

[Cross-posted from Happiness and Public Policy. Please leave your comments there.]