The mismeasure of money

Do I not earn enough money to secure perfect happiness? Or do I simply earn too much? “GDP and Life Satisfaction: New Evidence,” a study published last month by two economists, one at Warwick University in England and the other at the University of Minnesota, found in the world’s poorest countries a “clear, positive relation” between national income and the jauntily ambiguous notion of “national life satisfaction.” Which is good because it suggests that efforts to lift people from poverty are worthwhile.

Less reassuring, however, was the conclusion that the positive relation, the slope on the money curve to social delight, flattens when national income reaches $35,000 per capita; at points beyond that modest economic “bliss point,” satisfaction “turns negative” and stops contributing to happiness. In case you were wondering, World Bank data fix U.S. per capita income at $52,340. In New York, where I live and where we have been waylaid by yet another blizzard, median household income is $52,100. Now is our winter of discontent, whether from polar vortices or overly remunerative fiscal circumstances.

Or not. My wife and I earn considerably more than the study’s economic threshold. If I didn’t pay income taxes on that $35,000, it would cover the $2,900-per-month-believe-me-it’s-a-deal rent on my apartment in the Park Slope section of Brooklyn. That would leave me $200 of happiness to cover certain additional necessities — preschool for my 3-year-old (just shy of $20,000 per year), part-time day care for the little one (two days a week, $150 per day). My oldest, who is 7, goes to a good public school, so he’s off the books education-wise, but he simply insists on growing. (I have to buy him new shoes on what seems like a weekly basis.) All three of my children eat too. I spent nearly $300 on groceries last week, practically all of it on organic milk and squeezie yogurt.

Perhaps it’s best not to compare one’s economic happiness in New York with what works in the world’s impoverished nations. It is, in fact, perverse to do so. Plus, opinions vary widely on what the proper figure for happiness should be. Skandia International, a division of the investment firm Old Mutual Wealth, published its Wealth Sentiment Survey in November 2012, which tabulated responses from 5,000 people across four continents and found that, globally, the annual net income required to render one “really happy” was $162,000. Another study, this one released in 2010 by two researchers at Princeton’s Center for Health and Well-Being, determined that “emotional well-being” rose in tandem with income, but only up to $75,000, after which “no further progress” would be made. To complicate matters further, a foundational study on this subject, conducted in 1974 by economist Richard Easterlin, stated that per capita income growth did not, as he put it, “improve the human lot.” This counterintuitive relationship is known as the Easterlin paradox. Employers have not — yet — managed to use these data points as an excuse to avoid raises.

As Occupy Wall Street proved, disparities in income can affect satisfaction with the human lot … a lot. And there is a metric for that too. The Gini coefficient, again according to the World Bank, measures the “extent to which the distribution of income … within an economy deviates from a perfectly equal distribution.” The U.S., as you might imagine, is not a nation of perfect distribution.

The economic study of happiness is a relatively new field and one that lends itself to the definitional silliness and obvious contradictions inherent in any debate on “peak happiness” or the “perfect salary.” But it is important nonetheless. Many Americans, myself included, look to work and its tangible rewards for some inkling of meaning for our daily existence. To find benchmarks outside of productivity, achievement and labor — each of which has come to represent a freestanding moral virtue, underpinned by the compensations that flow from them — demands a kind of personal fortitude not all of us possess.

I work hard, and I want to be paid for it. I need there to be a sense of progress in my labor, an embedded promise that things can and will improve and that I have agency in this regard. I also crave the comforts, both internal and materialistic, afforded by money. But a part of me knows that nothing is guaranteed and that I am already apportioned a meaningful measure of happiness each day, mostly from the satisfaction and subjective well-being that I derive from my income-sucking offspring. This does not make me any happier about the outlays I am obligated to make on their behalf. I’m confident I would feel less unhappy if I made more money, but who knows? I’m not a subjective-well-being expert. The kids all looked happy to me this morning when I dropped them off at school. So was I, come to think of it. And it didn’t cost me a cent.