Not long ago we noted that contrary to the old adage, money can indeed buy happiness [5]. Given this, it stands to reason that the converse is likely true as well. That is, no money probably contributes to unhappiness.
Sure enough, a study [6] from Brookings finds that “poverty equals pain, worry, sadness, stress, and anger,” all things one might fairly equate with acute unhappiness. Here’s more:
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The Cost of American Poverty
Reported stress levels are higher on average in the U.S. than in Latin America. Importantly, the gap between the levels of the rich and poor is also much greater, with the U.S. poor reporting the highest levels of stress of all cohorts. Of course ‘stress’ is a complex phenomenon, however: “Good” stress is associated with the pursuit of goals, while “bad” stress is associated with struggling to cope. Bad stress, which is associated with an inability to plan ahead, lower life satisfaction levels, and worse health outcomes, is more common at the bottom of the distribution.
Pain, worry, sadness, and anger (reported as experienced the day before or not) are also all significantly higher among low income cohorts than among wealthy ones, while reported satisfaction with life as a whole is significantly lower, according to our analysis of Gallup data:
[7]
The cost and pain of poverty in the U.S. less about basic goods like water and electricity than nonmaterial factors: insecurity, stress, lack of opportunity and discrimination. Many of our policies, such as decent quality education, health insurance or savings incentives can help individuals to move out of poverty; they can also help to reduce the costs of being poor.
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As a reminder, here is the proof that money buys happiness:
[8]
This of course is bad news for America, where, as the St. Louis Fed has recently shown [9], the Middle Class is disappearing as Fed policy inflates the assets most likely to be concentrated in the hands of the wealthy and as wage growth remains elusive for 80% of the country's workers even as the nation's "supervisors" enjoy [10] higher pay.
