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Political Take: Can Money Buy Happiness?

By Eman Hamed

Edited by Riley Haveman

~ Op-Ed ~

As Congressional leadership struggles to pass comprehensive stimulus packages, Americans are dealing with economic problems and mental health issues. With every new day, it seems as if darkness wins and hope dwindles, which leads us to wonder if there is ever going to be a light at the end of the tunnel.

Even before COVID-19, the American economic and political states in the 21st century have not necessarily favored the poor, for every 3 in 5 Americans live paycheck to paycheck, and over a third carry exorbitant amounts of financial debt. Each year, the cost of living increases and puts a strain on American household incomes and Americans’ emotional well-being, a trend the coronavirus has nurtured exponentially. Accompanying these current financial struggles in America are despondency, anxiety, political apathy, and a lack of sufficient economic resources. Americans will continue to exhibit poverty, desolation, and missed opportunities so long as this status quo persists - but there is a solution. Society constantly asks if money can buy happiness, and perhaps at this very moment, for millions of unemployed Americans, the answer is a resounding yes - and this article will explore the extent to which a government-backed “universal basic income” can improve the mental health of Americans and buy them happiness.

You may have heard the term universal basic income (UBI for short) from Andrew Yang, who ran as a Democratic candidate for presidency in 2020. Here’s how it works: each month, every legal United States citizen above the age of eighteen will receive a check of $2,000 that they can spend in any way they choose. Let’s examine which particular groups are benefitted by UBIs and in what ways specifically.

Universal basic incomes and their relation to happiness are best known as an anti-poverty intervention. In the Proceedings of the National Academy of Sciences, a multidisciplinary scientific journal, authors Daniel Kahneman and Angus Deaton find that measures of wellbeing are lower for people in low income groups compared to those in higher ones. This is because, below a $75,000 income, factors like healthcare are expensive and hard to come by. Health problems such as asthma are more adverse while one is impoverished and simultaneously ill, and that’s because there is associated emotional turmoil with being sick and not affording medical coverage. Less income means less funds to allocate to healthcare and a lower chance of ensuring optimal physical and mental well-being. With UBI, more money can be spent on healthcare to avoid emotional trauma.

UBI is also solvent for education, which is the primary deterrent to poverty. MIT’s Economics explains that poverty burdens the mental and emotional bandwidth needed to think through important decisions. Knowing UBI is an anti-poverty measure, with its institution, parents or adults in families can resume schooling or attain a higher degree of professionalism in their field of interest. Pursuing one’s interests brings them closer to central happiness. Similarly, families worried about the cost of their children’s college and university education can begin to preserve funding for that purpose, which The World Bank proves alleviates stress and reduces harmful and impulsive actions taken out of economic hardship.

Being able to pay for education is impactful because it increases people’s capabilities for economic participation. Correlatively, as one is more educated, the more money they make proceeding their educational career. UBI can assist in paying for higher education which secures a higher income later on in life, dismantling generational poverty. Scholarly award winning Doctor of Behavioral Science Matthew Smith from Psychology Today explains that a UBI can prevent mental health problems such as schizophrenia, whose patients tend to come from poverty, and promote a happier outlook and self-reflection.

UBI is also conducive to happiness because lower income individuals elevate their consumer spending and regenerate local economies, causing small businesses to benefit. Small business owners who often struggle with keeping their enterprises open and who receive UBI monthly as prescribed can use the capital to renovate and enhance their business. These owners project immense pride into their businesses, so seeing businesses prosper through more consumer activity, or through their own UBI further ameliorates their morale and makes them happier.

Over 1/3 of Americans carry exorbitant amounts of financial debt

Currently, on average, over one-third of people’s monthly income goes toward paying off debt, with the average American accumulating $28,900 in personal debt. There is an overwhelming student loan, credit card, and medical debt crisis in this country that more than half of Americans report feeling anxiety, guilt, and despair on a monthly basis from. One third of Americans report that they would allocate UBI by paying off these debts to feel more relieved, more prepared for the future, and happier.

A UBI picks up the slack of our failing welfare programs, thus lowering negative political biases and attitudes amongst the poor. Impoverished Americans are disproportionately excluded from exercising their right to vote because of a lack of education. This view of political corruption creates political apathy and forces them to feel withdrawn from the political process.

As a result, voter turnout rates amongst impoverished communities have depleted. UBI could reverse this trend because, as it is observed, having a higher income makes an individual more likely to vote. A paper from the National Bureau of Economic Research describes a family income study that successfully used cash transfers, similar to UBI, to demonstrate this effect. By receiving more government-backed money, poorer groups feel more heard and obtain a greater feeling of respect from the political system. By putting money into the hands of working-class Americans, they will have more power to support candidates who truly represent them, donate to organizations holding politicians accountable, or consider becoming candidates themselves. This increase in political participation and decision making as well as feeling wholeheartedly represented and included stems into happiness.

Universal basic income assuages stress, which psychologists prove makes people more open to community engagement and spending time with their family (Smith, 2019). Psychological research has emphasized the importance of secure attachment relationships to both child and adult mental health, and the development of secure attachments is connected to family socioeconomic status. More money can mean more time to spend within your community and form good quality social relationships, which are seen as mental and physical health protective factors over the course of life. Overtime, this reduces mental hospital admissions and people are happier with more bonding time and sound relationships within their communities.

An objection may be raised due to recipients interpreting UBI as them needing to work less or put less effort in their profession, meaning the caliber of labor will degrade. However, such a shortcoming can be negated by the fact that the Stanford Basic Income Lab, an initiative by the Stanford Center for Ethics in Society that aims to research exclusively on the multi-faceted perspectives of universal basic income, attests UBI would be regarded as an incentive, not a dissuasion, to working harder to move up the rungs of the social ladder.

But while we can discuss the benefits of a UBI all day long, we have to examine its dark side: it must be implemented with structure, but there are execution limitations mainly associated with funding. UBI for all eligible Americans would cost more than $3 trillion a year, which is twice as much as Social Security, Medicare, and Medicaid. According to the Tax Policy Center in 2015, if the government instituted a measure to make UBI functional, it could be a value added tax (VAT). But because lower-income households have a higher propensity to consume, the tax burden is highest for them and falls sharply as household income rises, meaning this funding mechanism could hurt the very groups UBI is attempting to rebuild and subsidize.

While universal basic income is not widely practiced, it possesses striking projections of enabling poor and middle-class Americans with more economic and social opportunities, happiness, and improved life quality. Whenever your parents get the next round of stimulus checks, pay attention to how relieved and happy they are, and remember the impact money can have on happiness and emotional wellbeing.

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