Awesome! But what is happiness?
Happiness, according to the New Oxford American Dictionary is, “the state of feeling or showing pleasure or contentment.” Whether it was the first time we learned how to ride a bike, or receiving an “A,” on that ridiculously tough midterm, all of us at one point or another have experienced some form of happiness.
Many of us have heard the term, “Money can’t buy happiness.” However, this statement is not entirely true in the United States. In fact, Daniel Kahneman and Angus Deaton of Princeton University found that when household incomes in America increase, the level of happiness also increases.
So the more money we have, the happier we will be, right?
Not necessarily. Studies have shown that the amount of happiness individuals experience typically plateaus around $75,000. Essentially what the data is saying is that individuals who have incomes below $75,000 will see a significant increase in happiness because of the ability to fulfill basic needs; compared to individuals who have significantly higher incomes, it will be more difficult for them to “buy” more happiness.
America as a whole is one of the wealthiest nations in the world and therefore is one of the happiest nations in the world. Wrong. America is the fourteenth happiest nation in the world. Yes, while these results are not terrible, many believe that the US should be higher because the United States has the highest GDP in the world.
So what is the problem? Why are Americans not as happy as they should be?
Despite having the greatest GDP in the world, as of 2016 US GDP per capita was approximately $57,000, making America eighteenth in the world for per capita GDP. This statistic highlights one of the many current social issues that America is attempting to tackle – income inequality. While it takes $75,000 for an individual to obtain happiness, roughly 86% of Americans fall short of this benchmark, making it almost impossible for most Americans to sustain a lifestyle where they can obtain happiness. This would explain why Americans rank fourteenth in happiness.
There are many factors that contribute to income inequality in America. The income gap has been increasing in America due to globalization, the outsourcing of jobs, and technological advancements.
So what can we do to decrease the income inequality in order to increase happiness in America?
Well, that’s where it gets a little complicated. Since individuals have different core values and beliefs, solutions typically vary depending on the person being asked. When Bill Gates was asked how to solve income inequality, he responded by saying, “Shift the American tax code from one that taxes labor to one that taxes consumption.” His argument is that by taxing individuals based on their rate of consumption for goods and services, this will decrease poverty because typically wealthier individuals consume more, increasing the amount of taxes that they have to pay, which is different than our current system that taxes individuals based on their income. Others argue for raising the minimum wage or more accessible opportunities for higher education. On a global scale, countries such as China, Brazil, and India are increasing the skill level of their work force, causing wealth to shift from the US to these countries.
Blackman, Andrew. “Can Money Buy You Happiness?” The Wall Street Journal. April 10, 2014. Accessed March 22, 2017. https://www.wsj.com/articles/can-money-buy-happiness-heres-what-science-has-to-say-1415569538
John Helliwell, Richard Layard, and Jeffery Sachs. “World Happiness Report 2017.” World Happiness Report 2017. 2017. Accessed March 22, 2017. https://s3.amazonaws.com/sdsn-whr2017/HR17_3-20-17.pdf
King, James. “If $75K Is Key To Happiness, How Many Americans Are Happy?” Vocativ. April 14, 2015. Accessed March 22, 2017. http://www.vocativ.com/money/the1/if-a-75k-salary-is-key-to-happiness-how-many-americans-are-happy/
Matthews, Chris. “Bill Gates’ solution to income inequality.” Fortune | Finance. October 15, 2014. Accessed March 22, 2017. http://fortune.com/2014/10/15/bill-gates-income-inequality/
“Money Can’t Buy Happiness Meme.” Meme Center. January 21, 2014. Accessed March 22, 2017. http://www.memecenter.com/search/money%20can%27t%20buy%20happiness%20because%20money%20is%20happiness
This is a very interesting blog post and it only made me more confused on why income inequality is at the point it is now. If money stops making you happy after $75,000 why do the rich continue to get richer if it doesn't make them happy or benefit society in any way? I agree with Bill Gates's proposal of taxing by consumption because it is sensible and would balance out the inequality.
ReplyDeleteThanks Zeke. Well, I would argue that the reason why the rich continue to get richer is because when individuals hit that $75,000 benchmark, he or she realizes that they aren't as happy as they thought they would be. That, paired with the American dream (getting rich) and the idea that material object bring lasting happiness is part of the reason why individuals are driven to make insane amounts of money.
DeleteThis is a great blog post. I think happiness depends on the individuals beliefs, values and its background. Someone who was brought up in tougher would appreciate 75,000 more than someone who was raised in the upper class household. As far as income inequality I think Gates idea would be worth trying. I think happiness also depends on people living within their means.You can live a happy comfortable life if you stay within your means and budget your life accordingly. As far as the people who make more than 75,000 dollars I have no idea what their problem is and they need to be grateful!
ReplyDeleteMarkel, you are definitely not wrong. I would infer that humans are naturally greedy, which is why individuals who make more than $75,000 are not happy. Like we saw in Love, Money, and HIV, the reason why women were selling their bodies was so that they could obtain provisions that they could not necessarily provide without money. Mojola suggests that if these women did not have desires outside of their budget, perhaps the risk of contracting HIV would decrease.
DeleteI really like this post, however what is happiness? Like what Markel said it depends on the person and how they were raised. Also, with how the rankings are with happiness, what are the guidelines used to determine that? I also think that Bill Gates idea might work. As people with more money tend to spend more this would increase their taxes. It may cause a controversy, but it could balance out and make us as a country happier.
ReplyDeleteThis post was very interesting to read! When you mention that money necessarily not being able to buy happiness and that only up to about $75,000 can make someone happy, it made me think of the hedonic treadmill. How we can earn more money to buy and consume more things won't help us because buying more things will just raise our consuming expectations and how it will leave us off no better or happier than what we were. Another thing that I liked about your post was how you talked about Bill Gate's solution to income inequality, that taxing people based off of their consumption would be better than taxing someone based off of their income. Overall great post, I enjoyed reading it!
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