April 10, 2012

Money matters

Our generation’s tendency to downplay money’s importance could have serious ramifications in the future.

“I don’t want to make money,” Marilyn Monroe once famously said. ”I just want to be wonderful.” Not a chance, Marilyn. Not a chance.

Many a student on many a campus has ventured to make a similar assertion. Time and time again, it’s the same kind of claim—that money just “doesn’t matter” because money “can’t make someone happy.”

There are two major problems with this kind of thinking. First, only those who have money can even begin to make these kinds of value judgments. Second, it’s almost always wrong.

Indeed, to claim “money doesn’t matter” is perhaps the most ignorant and most groundless of judgments someone could make, especially when that someone happens to be a U of C student with well-endowed parents able to finance a college tuition at the nation’s second most expensive school, plus housing, utilities, and food.

Here’s the thing: You need to make money. Thus, to an extent, you want to make money. It’s unsupportable to argue otherwise, particularly from the typical privileged student’s vantage point of relative wealth and substance.

It’s true that money can’t always buy happiness, acceptance, or success. Studies have shown that money stops having a significant impact on one’s happiness past a yearly salary of $75,000 (at which point an individual becomes able not only to live relatively well, but also to save up for the future) and that life satisfaction does not correlate with income. Lottery winners, for example, hardly have the happiest of endings; an overnight thrust into fame and fortune is seldom a pleasant endeavor.

But—and this is a big “but”—in each of these examples, money still has a significant impact. Though happiness can’t be bought, happiness can be substantially enhanced, at least up to that $75,000 mark. Likewise, though some lottery winners have descended into bankruptcy or depression, many others have used the jackpot to escape poverty or pay for their kids’ college.

So if there’s anything lending Ms. Monroe’s claim some credence, it’s that happiness can’t be bought. But that’s still light years away from implying that monetary concerns should simply be dismissed, or that striving to be “wonderful” is simply all there is to leading a good life.

Why? Because almost nothing is “wonderful” without a dependable source of ample income.

Money can buy a house, a car, a cat, a computer. In part because of the United States’ continued, inexplicable aversion to universal health care, it can also buy a longer life in the form of health insurance. It can buy a better education, relaxing vacations, and the freedom to live a life without having to budget every cent.

More importantly, that $75,000 mark is still quite a bit of money, particularly for the three-fourths of Americans who fall below this lucrative bracket. Median household income in the United States is just $46,000.

These kinds of statistics have major consequences for government. Though the Illinois State Senate has introduced several pieces of legislation to raise the minimum wage since its last increase in 2010, they’ve all been rejected, largely on the grounds that our state already has the third-highest minimum wage. At Illinois’ minimum wage of $8.25, a full-time worker can expect to earn $17,160 per year. To put that into perspective, the national poverty line is $11,170 and $15,130 for households of one and two, respectively, putting minimum wage earners somewhere between 130 and 150 percent of the national poverty line. They fall right in the middle of that unfortunate Census-recognized category of “near poverty.”

It’s true that both sides of the minimum wage argument have comparable merit, and both sides agree that the ultimate goal is to move most workers away from depending on “minimum wages” altogether. But to completely dismiss a perspective simply because it doesn’t align with those of others states is foolish.

This mindset also prevents the politically powerful upper-middle and upper classes from empathizing with those who struggle on low wages. Take, for example, the Great Recession of 2008–2012. Though the downturn made a major dent in the earnings of households worldwide, it barely touched the lives of the upper economic echelon.

This approach made it easy to criticize anti-recession legislation like the American Recovery and Reinvestment Act, or to put off implementing them until it’s too late for them to have a major impact. It made it easy to dismiss Occupy Wall Street protestors as aimless “noise” or “lack[ing] in knowledge”—and, in more extreme cases, as “savages”—and their demands as “cosmology.” It made it easy to think that welfare programs have no impact, to disparage their recipients as “welfare queens,” and, as the federal government did in the ‘80s and ‘90s, to strive to “end welfare as we know it.” But these efforts all ran counter to the findings of studies which have shown that people tend to be the happiest when economic inequities are minimized.

However, perhaps the most dangerous consequence of this kind of thinking lies in its breeding of dismissive attitudes for future generations. Today’s 20-somethings are tomorrow’s leaders. Our ideas and attitudes won’t simply color tomorrow’s legislation; largely, they’ll define them. If we are to even try to present ourselves as an important generation, we should begin by recognizing and researching the problems that actually need to be solved—the correlations that we aren’t quite sure we support. Importantly, we need to stop subscribing to the reckless belief that our experiences hold true for others.

In the ideal world, it’s true—money shouldn’t, and almost certainly wouldn’t, matter. In the ideal world, earnings would correspond to talent, labor, time, and determination. There is also no doubt that the relationship between wealth and well-being is a complex labyrinth of socioeconomic hiccups and inconsistencies. Money isn’t the only answer to our problems.

But to even suggest that money isn’t an important part of the answer is narrow-minded, reckless, and wrong.

Anastasia Golovashkina is a first-year in the College majoring in economics.