Francis Koster: Economy No. 1; happiness lags behind

Published 12:00 am Sunday, November 8, 2020

By Francis Koster

We can look at the state of our nation through two lenses: the state of our economy and the state of our happiness.  

The United States has the No. 1 ranked economy in the world. Turns out this does not have much to do with our state of happiness. 

For almost a decade, researchers have been studying annually the happiness of 156 countries, looking at citizen’s perceptions of their happiness in many areas including their sense of freedom, their economy, education, the ability to improve oneself, health care, life expectancy and lack of public corruption. Using these indicators, our United States ranked only 18th for happiness. Our life expectancy at birth ranks 43rd in the world, and is falling.

So here we are ranked highest for our economic activity and No. 18 for our happiness. How can politicians who brag about economic progress miss the disconnect to the happiness rankings?  Once you better understand the two main indicators used to create economic rankings, things get clearer.

The first indicator is gross domestic product. Basically, GDP has two main flaws. First, it only counts money changing hands – not what it was spent on or how much happiness it bought. In an astonishing number of economic activities, GDP rises when quality of life and happiness goes down. Sell lots of cigarettes and GDP goes up. Make billions by doing things that cause climate change, pollution, birth defects and unhealthy foods and GDP goes up. Happiness goes down.

GDP also fails to recognize inequality, including the enormous amount of unpaid labor done by (mostly) women. Go out to a restaurant and GDP rises. Eat a mom-cooked meal at home, it does not. In 1975, the women of Iceland got pretty upset by how uneven pay was between men and women doing the same job. They went on strike all across the country. Gender fairness reforms were started, and the GDP rose in part because of the increase in women’s wages. Iceland now ranks No. 4 on the world happiness index.

The second major indicator of “success” is that “the stock market is setting new records.” Who is this benefiting? According to the Federal Reserve, over the previous four years the richest 1% of Americans saw their total stock holdings go up from $10 trillion total to $15 trillion (before COVID-19 hit) — a 50% increase. (This is five million checks each worth a million dollars). Each one of the households in the top 1% richest in America increased their wealth by over $4 million.

The next rung down the ladder, the wealthiest 10% of all households, which own a lot of stock, saw their stock value grew by over a quarter of a million dollars per household.  

On the other hand, the bottom half of all the households in America saw their stock market holdings gain $467.

In our recent national dialog, we have not been talking about the fact that a very few people have gained an enormous amount of money recently and the vast majority have not or the fact that we only rank 18th in the world’s ranking of happiness. 

It is hard to be happy when one in five North Carolina children live below the poverty level. That means their parents have $530 per month to pay rent, buy food, buy clothing, pay medical bills and cover transportation costs for that one child. The lifelong effects of poverty on children are catastrophic. They have more obesity and asthma, are seven times more likely to drop out of school and are at higher risk for emotional problems. They are not poor because they are sick; they are sick because they are poor, do not have access to healthy food and live in sub-standard housing.

I want to be clear. I am not a socialist. I do not favor government running what are now private businesses. I also do not want one in five of our kids growing up under circumstances that harm them for life. Other countries have addressed this by restructuring tax codes and regulations and as a result have a much higher happiness score.  

To quote our Declaration of Independence: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are LifeLiberty and the pursuit of Happiness.”

 The big issue here is not that we cannot fix this. It is that we are not talking about fixing it.

Francis Koster lives in Kannapolis and is a local activist who has been studying, teaching and implementing local solutions to national problems for over 50 years.