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N. 26, July 2002

Economic vs. Social health: it’s not the economy, stupid!

Money can’t buy you happiness. Apparently, everybody knows this except Americans, who keep thinking that economic prosperity automatically brings all sorts of goodies, from democracy in the former Eastern Block to satisfaction with one’s own life here at home. Well, the data are in, and the conclusion is that money really cannot buy us happiness.

Perhaps the most astounding indication of this is a simple but powerful graph published by the Fordham Institute for Innovation in Social Policy: it shows a steady increase of the US Gross Domestic Product from 1959 to the late ‘90s. No question about it, America has obviously gotten richer. However, equally impressive—and much more disturbing—is the trend of the Institute’s Index of Social Health, based on nine indicators that include child abuse, child poverty, high school dropout rates, average weekly earnings, unemployment, health insurance coverage, senior citizen poverty, health insurance for the elderly, food stamp coverage, access to affordable housing, and the gap between rich and poor. The social index went up in parallel with the economic one until the late 1970s. From then on it has changed to a downward spiral that continues almost uninterrupted to this day. There appears therefore not to be an automatic link between economic prosperity and social health or, as a Brazilian general commented on that country’s economic boom during the ‘70s: “the economy’s doing fine, it’s just the people that aren’t.”

This discrepancy can be glimpsed by the comparison of a few simple facts. The “good” news is that, in the period covered by the Fordham analysis, the average size of a new home has expanded from 1,500 to 2,190 square feet; the number of cars has risen from one for every two Americans age 16 or older to one for each driving-age individual; the number of Americans taking cruises each year has risen from 500,000 to 6,5 million; the production of recreational vehicles has soared from 3,000 to 239,000; and the number of amusement parks has leaped from 363 to 1,164.

Now for the bad news: suicide among America's young people has increased 36% since 1970, and triple the rate in 1950; the gap between rich and poor in America is approaching its worst point in fifty years and is the largest such gap among eighteen industrialized nations; average weekly wages, in real dollars, have declined 19% since 1973; the United States still leads the industrial world in youth homicide; America has more children living in poverty (14.3 million) than any other industrial nation; 43 million Americans are without health insurance (the worst performance since records have been kept) and the number has increased by more than one third since 1970; and violent crime remains almost double what it was in 1970, even with substantial improvements during the 1990s.

Hmm, it seems like this picture makes no sense if one insists on making the equation ‘more money = better life.’ Of course, money does make a difference for both individuals and societies. After all, the economic and social health indices did grow in parallel for almost two decades. To paraphrase Karl Marx, before you can work on the meaning of your life you have to have enough food in your stomach. But once peoples and societies reach a certain degree of economic prosperity, things become a bit more complex.

One of the factors that complicate things in the US is that the huge gap between the rich and poor is not counterbalanced by much of a social net to help the poor get better health, education, and, therefore, jobs. This relates to what is perhaps one of the most dangerous myths of American society: that this is the land of opportunities. Sure, it is if you are in the highest socio-economic classes and you wish to keep accumulating wealth across generations, as several dynasties of magnates have done since the beginning of the industrial history of this country and continue to do now (Vanderbilt and Trump come to mind as just two examples among many). This is also the land of opportunities in a rather more limited fashion, for example if you are a poor immigrant aiming to, at least, save your family from starvation, perhaps even getting to possess your very own VCR. But upward mobility in the US (or the myth of “from the log cabin to the White House,” as it is sometimes referred to) is actually no different, and it is even worse, than that in most other industrialized countries, when one bothers to use actual data instead of political rhetoric. The American poor are actually locked into their status: 54 per cent of those in the bottom 20 per cent in the 1960s were still there in the 1990s, and only 1 per cent had migrated to the top 20 per cent. The US has the lowest share of workers moving from the bottom fifth into the second fifth, the lowest share moving into the top 60 per cent and the highest share of workers unable to sustain full-time employment. And Americans are way overworked compared to their European counterparts.

Next time you are told that you live in a society where everybody can become President or, better, the CEO of a large company, ask about the actual numbers instead of unrepresentative anecdotes. You’ll be surprised to find out that the American dream is really a nightmare for far too many people. Isn’t it time to wake up?

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