This is a bit old, but I just came across it– an article in Time reports on a study which says that money can buy you happiness, but it reaches diminishing returns past $75,000 or so. That is, people whose yearly salary is around $75,000 seem to have reached the point at which money can make them maximally happy.
I’d be happy for $75,000. Just for the record, if anyone’s wondering? I would.
As you would expect, there are caveats to that. The happiness affected by having that amount of money was not your general day-to-day cheer, but your sense of fulfillment and well-being in life:
Before employers rush to hold — or raise — everyone’s salary to $75,000, the study points out that there are actually two types of happiness. There’s your changeable, day-to-day mood: whether you’re stressed or blue or feeling emotionally sound. Then there’s the deeper satisfaction you feel about the way your life is going — the kind of thing Tony Robbins tries to teach you. While having an income above the magic $75,000 cutoff doesn’t seem to have an impact on the former (emotional well-being), it definitely improves people’s Robbins-like life satisfaction. In other words, the more people make above $75,000, the more they feel their life is working out on the whole. But it doesn’t make them any more jovial in the mornings. . .Researchers found that lower income did not cause sadness itself but made people feel more ground down by the problems they already had. The study found, for example, that among divorced people, about 51% who made less than $1,000 a month reported feeling sad or stressed the previous day, while only 24% of those earning more than $3,000 a month reported similar feelings. Among people with asthma, 41% of low earners reported feeling unhappy, compared with about 22% of the wealthier group. Having money clearly takes the sting out of adversities.
At $75,000, that effect disappears. For people who earn that much or more, individual temperament and life circumstances have much more sway over their lightness of heart than money. The study doesn’t say why $75,000 is the benchmark, but “it does seem to me a plausible number at which people would think money is not an issue,” says Deaton.
And the article mentions what would seem like the biggest point of contention to me, which is that people often care more about their standing relative to others than they do about their sum worth. A person who is financially very comfortable but lives and works around people who make significantly more than he or she does may actually be less happy than someone who makes substantially less but is more on par with his or her friends and colleagues. This tells me that should I ever win the lottery, I should not move into a wealthy neighborhood and hang out with movie stars. Which I wouldn’t want to do anyway.
It also seems, however, that regional differences would matter hugely in this consideration, something the article– and the study it reports on– don’t appear to consider. $75,000 is not stinking rich, but it’s a good bit of money to make in many parts of the U.S. But I sure wouldn’t try to move to New York City or San Francisco on that salary. You’d think the happiness threshold of people who live in such places would be quite a bit higher than for the rest of us, but perhaps that was averaged out. This web site is useful for calculating cost of living for a different city relative to where you are now. It says, for example, that a person who makes $75,000 a year living in Dallas should make $170,571 in San Francisco. Housing is the biggest factor in that difference, being 715% more expensive! Wow.
What this study really says to me is that there is an identifiable point at which people become what you’d call “comfortable,” and this matters in terms of their overall satisfaction in life. Their worries cease impinging on their pursuit of happiness, because poor health and inability to pay your bills are a huge source of worry. The spookiest thing about Mitt Romney is the fact that he not only doesn’t have these worries, but he doesn’t even know what it’s like to have these worries. He can’t properly empathize with Americans on…well, most things in life because he is completely unequipped to process the feeling of not being sure if you need to sell your car in order to hang onto your apartment and keep the lights on, let alone not being sure if you can afford to buy your sixth house (and put a car elevator in its garage). I’m talking about a form of privilege here– inability to empathize because of never having been exposed to the same fear, concern, or worry as those who are suffering it– but it’s so far beyond that, that it hardly seems like the right word. Hyper-privilege, perhaps. Most if not all American presidents have been privileged, but Mitt Romney is hyper-privileged. And that’s why the usual attempts by presidential candidates to appeal to the common American are extra laughable coming from him.
Should someone so far beyond the standard of living which makes the average American happy be in charge of our collective pursuit of happiness? I’m thinking “No.” Perhaps this would be a difficult question if the person under consideration had made some kind of effort to demonstrate an ability to empathize with those who are in a situation he has never and will never have to endure, but Romney has done precisely the opposite– he has sneered at and written off such people. Rather hilariously (and frighteningly) he has lumped people who are comfortable into that group and written them off as well. Like my parents, for example. How does anybody support someone who has said “Screw you” to half the country in that way, even if they aren’t in that half?
Anyway, this wasn’t intended to be a political commentary. If you’re interested in the psychology of happiness generally, I would highly recommend Jonathan Haidt’s book The Happiness Hypothesis and Daniel Gilbert’s Stumbling on Happiness. If you were unaware that there is a psychology of happiness– guess what? There is. And no, it hasn’t succeeded in making everyone happy yet, as I’m sure you are aware. But it’s useful, because it helps us understand why we’re not happy and why it’s very often not our fault. That’s an important counter to so-called power of positive thinking theories which claim that we can just decide to be happy. We can’t. We can decide to do things which will contribute to our happiness, and they may succeed and they may not, but there is no Happiness Switch, and nothing which can flip it. Not even a bucketload of money, though that money can sure help in terms of erasing the worries that are caused by lack of money. So as with all aphorisms, there’s a lot more to “Money can’t buy happiness” than is expressed in the statement itself. It can. It can buy you the happiness of being able to pursue happiness unfettered. Or at least, less fettered than you were before.