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How do #Millennials Define #Happiness?

January 31, 2013 — 5 Comments

Now that the ladder of success has been reduced to splinters, the question remains: what does “success” mean in the 21st century and how do we achieve it?

By Lisa Curtis, Forbes.com

There used to be a ladder to success. It was the college→good job→marriage→house→family→cushy retirement. Sure, not everyone made it, there were a few broken rungs near the bottom but that was the guiding light to the good life and enough people made it that it seemed within reach. A few people questioned this ladder as really being “the good life,” but those were just hippies or crazies, no one worth paying attention to. Now all this has changed; my generation is growing up without a ladder.

Before you scoff, let’s think about that for a second. The first rung on the ladder, college, used to be seen as a straight shot to success. Now, for too many of us, it’s a straight shot to our parent’s couch and thousands of dollars in student loans, totaling over $1 trillion annually. As for a “good job,” well, many of us are busing tables in restaurants and shuffling papers in unpaid internships, but we’re the lucky ones. For those who didn’t make it to college, the unemployment rate is more than doubled at 8.7%, leading to a total of 14% of young workers (20-24) who are unemployed. While the economy will certainly improve, those years spent doing menial labor will never come back to us, with estimates that we could end up earning 10 percent less on average than somebody who left school a few years before or after the recession due to the loss of critical entry-level work experience.

As Derek Thompson of the Altantic put it, “For Millennials, this is the great irony of the Great Recession. A crisis that started in the housing market could wind up having the most lasting negative impact on the one generation that didn’t own any homes before the bust.”

Marriage is in decline with many young people choosing to wait or simply throwing marriage out as an outdated concept and opting for cohabitation or other “new family forms” instead. The idea that all of us should strive to own a home is what brought our economy to it’s knees so we’re lowering our expectations on that one a bit. As for retirement, don’t think we don’t know that social security is just a big ponzi scheme–one that’s expected to run out in 2037, well before most of us retire.

Now that our ladder has been reduced to splinters, the question remains: what does “success” mean in the 21st century and how do we achieve it?

We know how we don’t achieve it. We know that decades of runaway capitalism with ever more desperate attempts to improve the bottom line and lobby for more deregulation have failed. We know that measuring our country merely by GDP has put us 25th on the “inequality-adjusted” Human Development Index–meaning that there’s a good reason why the 99% took to America’s streets.

So if we’re not measuring America’s success by GDP, what should we measure? Recently, economists and national leaders have begun pushing for a something radically simple: measure success by happiness. Of course, measuring something as complex as happiness isn’t easy but as the recent Harvard Business Review issue devoted to the topic will tell you, not only is measuring happiness possible, valuing it can greatly increase company profits.

Success for my generation will be a shift from business as usual to something Umair Haque calls “Betterness.” A transition from climbing the ladder of unfulfilling societal expectations and consumerism to blazing a trail with a life guided by a holistic focus on well-being, community and sustainability. Following a better path won’t be easy but as we lie dreaming under the glow-in-the-dark stars of our childhood room we know that it’s at least one dream worth fighting for.

A writer, activist and traveler, Lisa Curtis’s experience ranges from working in the White House to serving as Peace Corps Volunteer in a small Nigerien village and working with women entrepreneurs in India. For more about Lisa, check out www.lisamariecurtis.com or follow her on Twitter @LisaCurtis.

Finally! The Data Behind the ‘Money & Happiness’ Question.

January 11, 2013 — 1 Comment

By DEREK THOMPSON of the Atlantic

The classic economic story about money and well-being goes something like this. Money buys happiness, sure, but only up to a point. Once basic needs are taken care of, extra money has diminishing (or non-existent) returns. Perhaps richer people use their money to move to richer areas, where they no longer feel rich. Perhaps relative income — how much you have compared to your friends — is matters much more than absolute income — how much money you have, period.

Economists call it the “Easterlin Paradox.” You call it the “Keeping Up With the Jones’ Principle.”

And a new research paper calls it total bunk. Or, in the economists’ parlance, “based on empirical claims which are simply false.” People with more money have higher reported well-being, they say, all the way up to the top 10 percent of earners. Here are the 6 most interesting observations from “The New Stylized Facts about Income and Subjective Well-Being,” a discussion paper by Daniel W. Sacks, Betsey Stevenson, and Justin Wolfers.

(1) Richer countries are happier. Here’s a simple graph to make a simple point. The researchers plotted 122 countries’ responses to a Gallup World Poll on well-being against each nation’s real GDP per capita (adjusted for purchasing power) and found a strong correlation.

Upshot: Well-being rises with income at all levels of income, across countries.

(2) … But every next dollar won’t buy the same amount of happiness. The straight line can be deceptive at first blush. The graph is *not* telling you that every next $1,000 on your paycheck is worth the same gains in satisfaction. Instead, the relationship is logarithmic. That means doubling your income from $1000 to $2000 raises satisfaction by the same amount as doubling your income from $10,000 to $20,000. Not that these findings are as binding as the law of gravity, but this would suggest that, to equal the happiness boost you felt from getting raise from $30,000 to $60,000, another $30,000 wouldn’t do the trick: You would have to double your income again, to $120,000.

(3) Richer countries get happier as they get richer. That first graph answers the question: Do countries with more income report more happiness? The answer seems to be yes. But what about a different question: Do individual countries report more happiness as their incomes rise? Also, yes. The next graph looks the 25 biggest countries in the world and shows the linear relationship between well-being and household income.

(4) There is no “happiness plateau” (or it’s much higher than we thought). Those lines tell us three important things. First, the lines go up. More money, more happiness. Second, the lines go upin parallel, more or less. Across language, culture, religion, ethnic background, the same amount of extra money seems to buy the similar amount of extra happiness. Third, the lines go up in parallel and they don’t flatten out. There is no “Easterlin plateau”, no satiation point, no bright line where money suddenly loses the ability to improve well-being.

(5) Europe’s lesson: A steadily rising level of satisfaction from a steadily rising level of income. The graphs below are a bit more pointilist and messy, but they make a similarly compelling point. The Eurobarometer survey, which has measured life satisfaction across the continent since 1973, clearly shows that in eight of the nine countries for which the researchers have the most data, well-being has increased through time with economic growth. Except for Belgium. You’re weird, Belgium.

(6) The American exception is also a lesson: Income inequality is a tax on happiness. The U.S economy has doubled in size since the early 1970s. But self-reported well-being has declined. Huh?

The authors make two reasonable excuses. First, economic growth correlates with improved happiness in most countries, but that doesn’t mean GDP is the overwhelming determinant of happiness. Social changes, such as the increase in single-family households, could play an equally powerful role in moving self-reported satisfaction in America. Second, it’s well known the U.S. is a world leader in economic inequality and that the fruits of a doubling GDP have hardly been shared equally. “In European countries, inequality has increased by half” the amount it has in the U.S., the authors find.

***

According to the modern godfather of income and well-being research, Richard Easterlin, it is better to be rich than poor, but rich countries don’t get any happier as they got richer. They hit a happiness ceiling, essentially. This idea matters a great deal, because in a world where only relative income matters, there might be less need to care about growth or pursue policies that maximized lower-income families’ post-tax incomes. The work by Sacks, Stevenson, and Wolfers suggests Easterlin was simply wrong. Absolute income matters absolutely, and voters, economists, and policy-makers have everything to gain by putting the spotlight on income gains for the average family.