Rich, but Not Happy
It seems something went wrong for us somewhere along the way.
In so many ways, the U.S. has done so well. In an article published today, "It's a Wonderful Time to Be Alive," my fellow Fool Morgan Housel shows a number of ways in which American citizens are better off today despite oft-highlighted naysaying. According to Morgan, as compared with decades past, we make more money, live longer, own bigger houses, and are left with more discretionary cash after paying for necessities like food and clothing.
Quoting The Rational Optimist author Matt Ridley, Morgan writes:
"Life is getting better -- and at an accelerating rate." There are ups and downs, recessions and wars, famines and floods. But for most people most of the time, things get better.
Yet in the midst of this, something is not quite right.
Studies back in 1989 showed that Americans born before 1905 had roughly a 1% risk of suffering a major depression by the time they hit 75. For those born after 1955, 6% had suffered a major depression by age 24. Data from the National Institute of Mental Health shows that the rate of depression among the U.S. population is 6.7% over the past 12 months, while the lifetime prevalence of the condition is a startling 16.5%.
The numbers seem to show that we're getting richer in wealth, but poorer in spirit.
And it's not just a touchy-feely "I feel kinda sad" issue here. Concerned about the strains already on the health-care system? Studies suggest that by 2020, depression will be the second largest killer behind heart disease -- and it's been shown that depression can be a contributor to heart disease to boot. Or how about the economic impact? It's estimated that from absenteeism and lost productivity alone -- that is, not even considering the cost of health care -- depression costs employers $51 billion per year.
We've all listened to enough pop music and seen enough sappy movies to know that money doesn't buy happiness. But still, how in the world can we reconcile the age of riches and comfort that we live in with the growing rates of not only garden-variety dissatisfaction, but clinical-level depression?
I came up a few possibilities.
Putting a name on it
Whenever there's a discussion of rising levels of depression, there's almost always a mention of the possibility that people are simply owning up more to suffering from the malady. I won't skip over this point, because I think there's some merit to it. However, I don't buy that it explains anywhere near the spike in depression that's been shown in the numbers. So I'll consider this a contributor, but not the primary cause.
Working hard? Or working harder?
As Morgan's article pointed out, real GDP per capita has grown nicely for us over the past few decades. But I couldn't help wondering whether we're simply working more. If more people are in the workforce, then it could push up the per-capita income but make people less happy as they feel their lives are nothing but slaving away at the office.
To be sure, more people are working today. Even with the high rates of unemployment, the employment-to-population ratio was 58.5% in March of this year, versus 55.1% at the beginning of 1950. In 2007, more than 63% of the population was working. However, when you work the numbers out, the number of hours worked per person (as opposed to just per worker) has stayed roughly the same. In other words, we're not working more, overall, than we were in the past.
The Bureau of Labor Statistics' index of productivity goes back only to 1987, but the big change appears to be there. We don't have to work more, because we can now produce a lot more per man-hour.
Keeping up with the Joneses
There's been a lot of talk about income inequality lately and perhaps this has something to do with the problem at hand. Research on money and happiness tends to show that even when people have a comfortable level of wealth they can end up pretty unhappy if they find themselves surrounded by folks that are far richer.
While this may certainly have something to do with the depression problem, this theory has fleas of its own. Income inequality has increased drastically since the late 1960s, but it was at similar levels back in the early 1900s.
Source: Piketty and Saez, via President's Report of the Economy.
Can't we all just get along?
Despite their pop-culture reputation for doing stupid things in large groups, lemmings tend to lead solitary lives. For humans, that just doesn't work. We're social creatures, and we don't thrive without social supports.
Given our country's rich history of a "pick yourself up by your own bootstraps" ethic and a drive for individual liberty, I couldn't help wondering whether this attitude could be contributing to our problems. While many other major, developed nations have universal health-care systems that make sure everyone in their society is taken care of, many Americans seem more willing to stick their hand in a terrarium of live scorpions than say anything positive about universal health care.
Unfortunately, though our headstrong individualism could have some part to play, the numbers suggest that this may not be a serious part of the problem. Lifetime prevalence of depression is 21% in France, which boasts extensive government-provided social support. While comparable numbers put the U.S. a close second at 19.2%, the Netherlands clocks in at 17.9%, and it's 14.1% in Belgium.
What do you think?
My theories may be contributors to the issue at hand, but none really nail down definitively why we seem to be getting sadder amid our embarrassment of riches. So tell me, what do you think? Scroll down to the comments section and share your thoughts on this conundrum.
At the time this article was published We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.Fool contributorMatt Koppenhefferhas no financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting hisCAPS portfolio, or you can follow Matt on Twitter,@KoppTheFool, or onFacebook. The Fool'sdisclosure policyprefers dividends over a sharp stick in the eye.