Money and Mental Health

This article first appeared in the Island Word in Spring, 2009. 

At first it seemed surreal—where was this global financial crisis, and how would it affect us?  As the months go by, and our savings drop along with everyone else’s, we still wonder what it really means.  What does money have to do with mental health?  Does wealth make us happier?  Does poverty make us unhappy?

The available research on wealth and mental health actually does find consensus on some answers.  Generally speaking, more money to spend does not buy happiness.  Most of us can be relieved to know that if our income level were to drop or to rise we would, after an adjustment period, accommodate and return to our characteristic happiness or tendency to whine.  The capacity for contentment resides within our ability to enjoy what we have, not in our ability to have more.

But there are important caveats to this general rule.  First, there is an economic floor beneath which being poor is hazardous to both physical and mental health. We used to say that few people in Canada experienced absolute poverty comparable to that in so-called “third world” countries.  But with hundreds of homeless people now living in the Comox Valley, the presence of third world living conditions among us has become hard to deny.  The constant physical and emotional stress of Canadian-style homelessness will bring latent mental health challenges to the fore, and cause new ones as well. Living outdoors is so hazardous that the line between rational anxiety and paranoia blurs.  Having a serious mental illness such as Schizophrenia is a risk factor for homelessness (although the majority of homeless people do not have Schizophrenia), and, once on the street, medications may not be taken regularly. Depression, which erodes the will to fight for survival, can be fatal to people who are homeless.

Second, money affects happiness when it is the means by which we compare ourselves to others.  “Relative poverty” is feeling poor, and being treated as inferior, compared to others.  When relative poverty affects human dignity and the ability to participate meaningfully in one’s society,  then its effects on the human spirit can match or even exceed the effects of absolute poverty.   This, homeless people will tell us, is the real rub—being treated as beneath dignity.  But we needn’t lose everything to lose dignity. Children living beneath local Low-Income-Cut-Off levels may not complain of poor nutrition or cold houses (though they may, in fact, suffer both of these conditions).  However, they are quick to describe the effects upon their dignity of lacking the “right” clothes, the money to take part in extra-curricular activities, a present to take to a birthday party, or a room that they can show playmates with pride.  It is hazardous to fall below this “dignity floor” even if, as some critics claim, the lives of poor Canadians would, in some parts of the world, be considered luxurious.   Life on income assistance may not be absolute poverty, but it hurts.

Third, money spent on services and experiences is probably more likely to improve our outlook than money spent on owning things. For young parents, access to trustworthy child care can save a marriage or facilitate a career.  Money spent on education yields a happiness dividend in the long run; there is a small but robust positive correlation between level of education and happiness, independent of income.  Auxiliary health care services like physiotherapy, counselling, and massage can greatly enhance quality of life for those who need them. And there is a bonus to this kind of spending in that it stays in the community, unlike money spent on consumer goods, which tends to go elsewhere in the world.

Fourth, deep debt is considered a serious life stressor, which can threaten happiness either directly, through worry and frustration, or indirectly, through its impact upon relationships that are complicated by it.

Finally, one thing that does affect the overall level of happiness in a country or province is the “gradient of wealth”—that is, the spread of wealth among people from richest to poorest. In fact, the level of absolute wealth in a country has little impact upon happiness:  people in Bangladesh are not necessarily less happy than people in Canada.  But the larger the difference between how the poorest and the wealthiest citizens of a jurisdiction live, the less healthy and happy are its people at every level of wealth.  Countries that soften the gradient through progressive taxation, universal health care, education, recreation, libraries, social housing and opportunity for a meaningful life have better happiness levels and better health right up the wealth spectrum, from the lowest to the highest.  Countries that reward the wealthy at the expense of creating deep divisions, and that abandon the poorest to a life beneath dignity, have less overall happiness even when their Gross Domestic Product is high and their economies are roaring.

In facing the current economic crisis, there are some lessons we can draw from all of this.  As individuals, we can practice and cultivate gratitude and contentment for what we have. We can avoid comparing ourselves to others who appear to be wealthier than we are. We can resist judging the value of people by their apparent wealth, and we can especially remember to apply this rule to ourselves.  We can deal openly with creditors and reduce our debtload.  After the pain of loss, we know that we can adjust to having less, and that people usually become more creative and resourceful when faced with modest levels of deprivation.  Perhaps our elders, who remember times of free and simple entertainments, second hand clothes, home-made soup and a hundred ways to stretch a dime will lead us, as elders should, in the directions we need to go.

Collectively, we can look upon this as the fall that precedes necessary change.  We need to re-evaluate what it means to be a “have province” with a strong economy.   A year ago, at the height of its supposed economic recovery, BC had the highest rate of child poverty of all Canadian provinces, and our homelessness rate had quadrupled over 7 supposedly prosperous years.  Now, with the world economy in free-fall, how fine is the line that separates the housed from the homeless, the employed from the unemployed, the respectable from the despised?  Is our “safety net” designed to keep our dignity intact, should we fall into it?   Is our education system good enough, and well funded enough, to give children and adults the tools to create new opportunities when old jobs disappear?  Levelling the gradient of wealth, by restoring and building upon collective solutions to poverty and universal access to things like parks, schools, recreation, housing, higher education, and high quality health care will help not only the poor but also the vulnerable middle class sleep better at night.  We can measure this new economy not by a simple dollar figure of Gross Domestic Product, but by looking at whether it supports a vibrant, living future for humans and other creatures.

This month, as a start, we suggest that readers give their support to the work of Dawn to Dawn against homelessness in the valley, teach some children how to play a game that requires no batteries or power cord, mend something rather than throw it out, make something good to eat from scratch, and thank the earth for the ingredients we use.  Do something political, something collective, something creative, and something spiritual for the new economy of a healthy, happy earth.