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Rich, but Not Happy

It seems something went wrong for us somewhere along the way.

In so many ways, the U.S. has done so well. In an article published today, "It's a Wonderful Time to Be Alive," my fellow Fool Morgan Housel shows a number of ways in which American citizens are better off today despite oft-highlighted naysaying. According to Morgan, as compared with decades past, we make more money, live longer, own bigger houses, and are left with more discretionary cash after paying for necessities like food and clothing.

Quoting The Rational Optimist author Matt Ridley, Morgan writes:

"Life is getting better -- and at an accelerating rate." There are ups and downs, recessions and wars, famines and floods. But for most people most of the time, things get better.

Yet in the midst of this, something is not quite right.

Studies back in 1989 showed that Americans born before 1905 had roughly a 1% risk of suffering a major depression by the time they hit 75. For those born after 1955, 6% had suffered a major depression by age 24. Data from the National Institute of Mental Health shows that the rate of depression among the U.S. population is 6.7% over the past 12 months, while the lifetime prevalence of the condition is a startling 16.5%.

The numbers seem to show that we're getting richer in wealth, but poorer in spirit.

And it's not just a touchy-feely "I feel kinda sad" issue here. Concerned about the strains already on the health-care system? Studies suggest that by 2020, depression will be the second largest killer behind heart disease -- and it's been shown that depression can be a contributor to heart disease to boot. Or how about the economic impact? It's estimated that from absenteeism and lost productivity alone -- that is, not even considering the cost of health care -- depression costs employers $51 billion per year.

We've all listened to enough pop music and seen enough sappy movies to know that money doesn't buy happiness. But still, how in the world can we reconcile the age of riches and comfort that we live in with the growing rates of not only garden-variety dissatisfaction, but clinical-level depression?

I came up a few possibilities.

Putting a name on it
Whenever there's a discussion of rising levels of depression, there's almost always a mention of the possibility that people are simply owning up more to suffering from the malady. I won't skip over this point, because I think there's some merit to it. However, I don't buy that it explains anywhere near the spike in depression that's been shown in the numbers. So I'll consider this a contributor, but not the primary cause.

Working hard? Or working harder?
As Morgan's article pointed out, real GDP per capita has grown nicely for us over the past few decades. But I couldn't help wondering whether we're simply working more. If more people are in the workforce, then it could push up the per-capita income but make people less happy as they feel their lives are nothing but slaving away at the office.

To be sure, more people are working today. Even with the high rates of unemployment, the employment-to-population ratio was 58.5% in March of this year, versus 55.1% at the beginning of 1950. In 2007, more than 63% of the population was working. However, when you work the numbers out, the number of hours worked per person (as opposed to just per worker) has stayed roughly the same. In other words, we're not working more, overall, than we were in the past.

The Bureau of Labor Statistics' index of productivity goes back only to 1987, but the big change appears to be there. We don't have to work more, because we can now produce a lot more per man-hour.

Keeping up with the Joneses
There's been a lot of talk about income inequality lately and perhaps this has something to do with the problem at hand. Research on money and happiness tends to show that even when people have a comfortable level of wealth they can end up pretty unhappy if they find themselves surrounded by folks that are far richer.

While this may certainly have something to do with the depression problem, this theory has fleas of its own. Income inequality has increased drastically since the late 1960s, but it was at similar levels back in the early 1900s.

Source: Piketty and Saez, via President's Report of the Economy.

Can't we all just get along?
Despite their pop-culture reputation for doing stupid things in large groups, lemmings tend to lead solitary lives. For humans, that just doesn't work. We're social creatures, and we don't thrive without social supports.

Given our country's rich history of a "pick yourself up by your own bootstraps" ethic and a drive for individual liberty, I couldn't help wondering whether this attitude could be contributing to our problems. While many other major, developed nations have universal health-care systems that make sure everyone in their society is taken care of, many Americans seem more willing to stick their hand in a terrarium of live scorpions than say anything positive about universal health care.

Unfortunately, though our headstrong individualism could have some part to play, the numbers suggest that this may not be a serious part of the problem. Lifetime prevalence of depression is 21% in France, which boasts extensive government-provided social support. While comparable numbers put the U.S. a close second at 19.2%, the Netherlands clocks in at 17.9%, and it's 14.1% in Belgium.

What do you think?
My theories may be contributors to the issue at hand, but none really nail down definitively why we seem to be getting sadder amid our embarrassment of riches. So tell me, what do you think? Scroll down to the comments section and share your thoughts on this conundrum.

We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Matt Koppenheffer has no financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter, @KoppTheFool, or on Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.

Read/Post Comments (12) | Recommend This Article (8)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 13, 2012, at 4:43 PM, MNGPHR wrote:

    peoples lives are too complicated. I work, go home enjoy reading a book, or watching sports, hang out with the wife. I hardly ever buy stuff so I save money like crazy. My wife and I bought an IPAD but that was our only expensive purchase in the last year or two. We just don't have any desire for materialistic wealth. I also brew my own beer and currently have 15+ gallons in my fridges downstairs, so maybe that helps

  • Report this Comment On April 13, 2012, at 4:58 PM, SSFE wrote:

    So sad how people are driven to keep up with the Joneses. I'm like you above bro. I am not materialistic at all and am very happy. It's funny though many people in my life(not wife) promote buying materialistic things. Like Crown molding. Like I s/b excited over crown molding. I mean who gives a cr-ppola over crown molding. However, I've noticed that wealthy people are temporarily happy when they buy something big and then shortly thereafter they are unhappy again. So you usually hear about them buying something big again. So sad really. Gluttony is never satisfied. Well MNGPHR have a great weekend!

  • Report this Comment On April 13, 2012, at 5:40 PM, DJDynamicNC wrote:

    The heart of American culture for a very long time has been can-do positivity, ingenuity, innovation, and education.

    In the last thirty years, we've been shedding that for doomsday prophecies, "we can no longer afford to pay for things except as many freedom bombs as it takes to blow up Afghanistan" budget rhetoric, and first Japan, then China anxiety.

    Concurrently, we've enshrined Wall Street's culture of greed at the heart of what it means to be capitalist. We have people preaching that "greed is good" - that's not an exageration or a metapohor, people literally believe that greed is good.

    Further, we live increasingly isolated lives in bedroom suburbs and exurbs where the only time you see people are on the morning commute as you cut them off to get to work 15 seconds quicker. That can't possibly be emotionally healthy for social animals.

    At least part of the antidote is strong communities. There is nothing more important to the health of both the nation and its citizens.

  • Report this Comment On April 13, 2012, at 5:40 PM, DJDynamicNC wrote:

    "At least part of the antidote is strong communities. There is nothing more important to the health of both the nation and its citizens."

    By the way, that means the Motley Fool community is part of the solution, not part of the problem - so Fool on!

  • Report this Comment On April 14, 2012, at 12:22 PM, DDHv wrote:

    An excellent community is a church that is truly following God. Don't expect perfection tho - if we joined a perfect community, it would then immediately stop being perfect! ;-)

  • Report this Comment On April 15, 2012, at 3:01 PM, XTMFCaptain wrote:

    1. I don't think the individual, pull yourself up by the bootstraps is harming our mental psyche. In fact, as we have moved from that mentality is when the depression rate has increased. So, if anything, more dependence on the state, which we now have as 40% of people get some form of subsistence from the state, increases depression. Maybe working hard and achieving due to our efforts actually improves mental health. I think the real reason is...

    2. Materialism. Materialism is the main culprit. We are always wanting more, rather than being happy with what we have. If you don't have a huge house, great car, etc. then you feel as if you haven't achieved anything. But, even getting these items don't help as most rich folks are depressed as well. If we worked hard and lived simple, content lives, we would be much happier.

  • Report this Comment On April 15, 2012, at 3:08 PM, Crusis wrote:

    Personally I think a completely safe life where everything is spoon fed to you and there is no danger is a boring life. Our ancestors struggled to survive, they didn't have time to think about whether or not their children were being raised politically correct, they just wanted to make sure they were being raised with something to eat.

    I think if we want to restore life to this nation, we need to restore that frontier spirit. Step back from socialism, reward innovation, funnel money into our space program instead of our foreign invasion programs, pay our scientists and engineers more to encourage those studies in school, legalize drugs to quit funneling money to our enemies, and stop taxing American corporations into submission. We need to give tax breaks to corporations that have say... 75% or more of their employees in the USA. We can raise the standard of living, pay off the debts our moronic leaders have run up, and require people to be accountable for their own lives. We should be racing for the Moon, colonizing it with Americans and letting this new frontier lift our national pride and spirit. Instead, we whine about how little Johnny got his feelings hurt because someone called him a booboohead at school today. Man up, America, and conquer a new frontier. Innovate! Create! It's what we do, and government has stolen that from us. It's no wonder we're drug addled idiots. We've had our lives and pride stolen from us by Progressivism.

  • Report this Comment On April 15, 2012, at 8:42 PM, opus567 wrote:

    Major depression is a clinical diagnosis, and less likely to be caused by temporary external situations and more likely to be caused by some kind of chemical imbalance. While the materialism and self-centeredness that others have mentioned is likely a factor, I think our sugar-starch-and-fat-laden diet, addictive behaviors (e.g. smoking, alcohol), and sedentary lifestyle have more to do with it.

  • Report this Comment On April 16, 2012, at 1:36 PM, TMFKopp wrote:


    I wouldn't underestimate the potential for temporary external situations (esp when "temporary" is measured in months or a few years) or psychological stress to impact biology/body chemistry and lead to outcomes like depression.


  • Report this Comment On April 16, 2012, at 2:24 PM, DJDynamicNC wrote:

    "An excellent community is a church that is truly following God."

    Data to back that claim up, please.

    I would say that an excellent community is one that respects human beings, treats people with compassion, engages in meaningful and creative work, and does no harm to those around it. Following the teachings of a particular god, whether it be Allah, or one of the many flavours of Christian god, or Shiva, or Zeus, doesn't really matter so long as you have those fundamentals.

    Certainly one would not wish to be involved in a community following a God who makes commands such as this:

    "If a man has a stubborn and rebellious son who does not obey his father and mother and will not listen to them when they discipline him, his father and mother shall take hold of him and bring him to the elders at the gate of his town. They shall say to the elders, "This son of ours is stubborn and rebellious. He will not obey us. He is a profligate and a drunkard." Then all the men of his town shall stone him to death. You must purge the evil from among you. All Israel will hear of it and be afraid."

    That's Deuteronomy 21:18-21, for those keeping score at home. Not the kind of community I would consider to be the most excellent, but I suppose we all have our own values.

  • Report this Comment On April 16, 2012, at 2:25 PM, DJDynamicNC wrote:

    ---> "We've had our lives and pride stolen from us by Progressivism." <---

    It's funny, @Crusis, because as you were listing the things we should be doing, I found myself largely agreeing - you're making very progressive policy prescriptions.

    I might also point out that the "Frontier Spirit" you're so fond of was fatal to a great many people. You may find a perfectly safe life boring; I suspect a great many actual frontier families would trade in a heart beat.

  • Report this Comment On April 16, 2012, at 2:52 PM, setht23 wrote:

    I've got to say it's a toss up between the scorpions and complimenting social healthcare. . . . . nvm I'm going with the scorpions, at least they're honest about wanted to poison you.

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