Income inequality and happiness

Income inequality and happiness

I recently posted in my Human Factors blog on the book The Cheating Culture.  He also talks about the effects of income inequality on happiness.  Here are some points I thought were important to share:

• When people are getting really rich, even doing reasonably well makes everyone else unhappy.
• This is compounded when the rich are getting richer by having privileges you don’t have or by getting away with breaking the rules.  Unfairness makes the rest of us less happy, even when we are doing fine and haven’t been treated unfairly personally. 
• Our economy seems to be winner take all.  This makes it perceived as more of a zero sum game.  So other peoples' success really does indicate our own loss.
• He cites evidence that the rich are getting richer and happier and middle class is getting sadder.
• The American “ethic” is that if you work hard you will get ahead.  When we lose this dream, we are even more sad.

He suggests some public policies that he thinks would address this problem.

• Enforce laws more evenly and fairly
• Encourage the development of non-economic values like respect and compassion.
• Increase income at the bottom through minimum wage, EITC, subsidies for higher education, birth endowments and the like.
• Reduce insecurity at the low end by providing them with subsidized health care and child care
• Equalize perceptions of influence: Endow less power to lobbying groups, corporations and other established interests.
• Get ordinary people more involved in civic life: voting, etc.  If we all perceive involvement as a valuable, influential exercise, we will do more of it. 
• Create more livable communities.  Feelings of community have been shown to increase happiness.
• Encourage more racial, ethnic and religious (and other kinds of) tolerance.  One big happy melting pot.
• Include ethics and character education in K-12 education.  And make schools walk the walk by enforcing honor codes and not behaving unethically themselves.  [I think this one addresses the "Cheating Culture" more than unhappiness, but it couldn't hurt.]