No one likes unemployment. (Well, almost no one; a few Scrooge-like devotees of unfettered capitalism have long maintained that a certain amount of unemployment is good for business – at least, theirs – since the more people looking for work, the greater the downward pressure on salaries.) On balance, however, most Americans would like to see more jobs for everyone, although they disagree about how to achieve this goal.
As we proceed into 2013, political and ideological lines are clearly drawn when it comes to macro-economic priorities, with Republicans pushing for debt reduction – via less spending – and Democrats emphasizing a Keynesian preference for federal spending to stimulate the economy, thereby helping to create jobs right now.
Paul Krugman has argued cogently in The New York Times for the latter approach, while conservatives claim that the deficit constitutes a greater danger than unemployment, particularly since behind it looms the supposed specter of inflation. As it happens, findings from one of the newest research areas in the social sciences provides individual level, micro-economic support for the Keynes/Krugman argument.
The data come from considering a surprisingly simple, yet multi-facetted question: What makes people happy, and unhappy? So-called “positive psychology” has begun making substantial headway among psychologists, while economists have started to supplement their traditional focus on income with various indications of “subjective well being.”
From both disciplines, a strong case emerges that happiness is a far more meaningful indicator of well-being than are traditional measures of, say, wealth or income. It is widely known, for example, that Bhutan has pioneered a focus on Gross National Happiness. Less well understood, however, is that the traditional alternative - per capita Gross National Product - leaves much to be desired. The recent carnage in Sandy Hook, Connecticut, was an immense tragedy, and yet, given the added business it provided for mortuaries, florists, restaurants and motels housing the influx of media reporters, it substantially increased the region’s per capita GNP!
By contrast, measures of happiness or “subjective well-being” are derived by actually asking people about their lives and preferences, typically considering such things as social support (from family and friends), personal health, leisure time, educational achievement, environmental quality, and so forth. Also employment status.
The so-called “misery index” – which had its hey-day during the latter years of the Carter Administration - combines inflation rate (primarily a concern of fiscal conservatives) and unemployment statistics (typically a focus of liberals), treating them as equally deleterious. And yet, happiness studies conducted worldwide consistently show that with the exception of massive hyper-inflation – of the sort that occurred in pre-World War II Germany or, nearly a decade ago, in Zimbabwe – unemployment is considerably more detrimental to citizen happiness than is inflation. In fact, according to Brookings Institution economist, Carol Graham, the former diminishes per capita happiness by an order of magnitude more than does the latter!
One of the more intriguing, consistent yet troublesome findings by happiness researchers is what is sometimes called a “hedonic treadmill,” whereby upwardly mobile people quickly adapt to their improved circumstances, after which they are left little happier than they were before. Economist Graham has thus noted the “paradox of happy peasants and miserable millionaires,” by which people of lower socio-economic status often adapt to their unfortunate situations by lowering their expectations and therefore ending up as happy – or even, in some cases, happier – than their wealthy fellow citizens.
There are, to be sure, many flavors of happiness, from momentary pleasure to Aristotle’s eudaemonia (a meaningful life, well-lived), from cheap thrills to joyous, deep-seated, well-earned well-being. It is not necessarily the job of government policy to cater to humanity’s baser inclinations, although it may well be government’s job to listen to its own citizens.
It is clear, in any event, that dramatic decreases in one’s personal circumstances – notably losing one’s job and being unable to find another – result in substantial decrements to subjective well-being, all the more in a country such as the United States, in which unemployment has long been stigmatized, and within which high unemployment has fortunately not (yet?) become the anticipated norm.
It seems reasonable that insofar as governments, including that of the United States, are instituted at least in part to promote the welfare of its citizens, part of that goal should include taking national happiness seriously. And an important part of that should include taking seriously the fact that unemployment – much more than inflation - is one of those things that make people especially unhappy, such that governments can and should prioritize reducing the former over minimizing the latter.
David P. Barash, a professor of psychology at the University of Washington is author, most recently, of Homo Mysterious: evolutionary puzzles of human nature. He is co-writing a book about the paradox of happiness in Costa Rica.