Wednesday, November 6, 2019

The American Dream and happiness in America

Vijay K. Mathur

Recent research on Americans’ well-being and happiness is finding that the American dream is fading. These findings are at odds with some in the media parroting the current administration’s and its sympathizers’ announcements that the economy is very healthy with plentiful jobs, better than in past decades.

This apparent conflict between the macro data and the personal lives and perceptions of Americans about their well-being can only be understood if one looks beyond the macro data on unemployment and growth rates. For example, if businesses in Utah advertise for 100 job openings for part-time work and single moms fill those jobs at minimum wages and no benefits, the unemployment rate will drop. However, those single moms will not be very happy with their lives, especially when they have small children to support.
The 2019 World Happiness Report (WHR) uses Gallop World Poll from 2016-2018 to rank countries on a happiness measure. This survey uses a measure, “life evaluations”, where people in a country’s population are asked to put the status of their lives on a ladder with zero to 10 steps, where zero is the worst and 10 is the best. Each country is ranked based upon the average score from the survey for the measure “life evaluations”. Six variables, per capita GDP, social support, healthy life expectancy, freedom, generosity and absence of corruption, are used to explain the overall average score. The U.S. ranks 19 from the top out of 154 countries for the period 2016-2018.

The U.S. ranking has been declining over a period of time since the first WHR in 2012. The survey also collected data on positive affects and negative affects. Positive affects represent an average of previous day for happiness, laughter and enjoyment over the survey waves from three to seven years, and negative affects represent an average of previous day of worry, sadness and anger over the period of time. The U.S. ranks 35 on positive and 70 on negative affects from the top out of 156 countries.

A review essay by Davis Blanchflower and Andrew Oswald (BO) in “Journal of Economic Literature,” from June 2019, fills up some gaps on the overall happiness status of Americans. The authors present research findings of Carol Graham of Brookings Institution and draw certain other conclusions based on their data. Graham finds that mental well-being has become more unequal; Americans are suffering from lack of hope and are less optimistic; the poor have more stress, pain and lower life satisfaction as compared to the rich; Americans have lost confidence and hope for upward social mobility.

In addition BO find that Americans are facing psychological difficulties in mid-life. White Americans are less happy than black Americans despite wide financial gap between whites and blacks during 1972-2016. There is lower financial satisfaction and happiness among less educated. Depression, anxiety and suicide are more prevalent among whites than blacks. High-income inequality contributes to low life satisfactions.

Utah is one of the happiest states in the U.S. with a ranking of No. 2 from the top, even though it has a drug overdose death rate higher than the U.S. rate ( and one of the highest suicide rates ( among states in 2017. Some of the factors contributing to high overall happiness ranking are fewest working hours, high-income growth, low divorce rate and high level of safety.

The economic uncertainty among Americans plays a very dominant role in hope, life satisfactions, confidence and optimism. A June 2019 survey of a sample of 1116 adults, by AP NORC center and University of Chicago, finds that fewer adults have confidence in their ability to retire or pay an unexpected expense of $1,000. A quarter of adults do not have enough income to meet expenses. Economic opportunities are not widely shared. The American dream is becoming more distant for an increasing proportion of Americans.

Professor Angus Deaton, Nobel Prize winner in economics, appropriately states in his book, “The Great Escape,” “There is much to be said for equality of opportunity, and for not penalizing people for the success that comes from their own hard work. Yet, with other rich countries, and in spite of the popular belief in the American dream that anyone can succeed, the United States is in fact not particularly good at actually delivering equal opportunities.”

Mathur is former chairman and professor of Economics, Department of Economics, Cleveland State University, Cleveland, OH.  It was published as opinion article in Standard Examiner, July 23, 2019, Ogden, UT.

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