Happiness After Inflation
What is the new $75k?
We’re all aware that these are tough times, especially for the post-Boomer generations. While it used to be possible for a single-income household by a White man with a high school diploma to be able to buy a single detached house, a mid-range car, and raise a family of four to five on average, that kind of dream is officially dead. Nowadays you’ll be lucky to find a decent home with dual-income without going into crippling debt that will keep you up at night, or, like many single Millennials and younger, give up the idea of owning a house all together. Just simply scraping with stagnant minimum wages and deflated middle class expectations is hard enough as it is.
A while back, there was a study on income and happiness that made the rounds on the internet. It surveyed a bunch of people from the US on their level of happiness with life in general, as well as their level of income. It was generally concluded that the amount of happiness grew with income until the $75,000 USD mark where it seemed to plateau. This finding already threw people for a loop back in 2010 when it was first announced. Median incomes in most developed countries like Canada, the USA, and the UK were well below this mark, meaning over 50% of these countries were never going to be as happy as they could be.
Fast forward to today, and things seem even more bleak. Inflation of everything is through the roof. Housing has gone exponentially crazy. Yet income has barely advanced.
According to the Bank of Canada, if something cost $100 in 2010 it would now cost $130.61. Or if we had $100 in 2010, it would now be worth $75.56. That nearly 31% inflation rate means that everything that we make is worth about 25% less.
So, how does that affect our happiness?
Just because I’m Canadian, I want to see what this looks like up north. That original number of $75,000 USD would be equivalent to $77,250 CAD at the average exchange rate of 1.03 in 2010 (less than I expected!). Now if we divide this by the inflation rate or 1.3061 we get a whopping $100,896 CAD. For our American neighbors, that’s $97,957 USD.
When I was in my 30’s I had decided to go back to school to supplement my worthless psychology/philosophy degree (still love it!) with a much more valued computer science degree. After a few years of working I was able to reach a comfortable salary of $85,000. Yet despite all of this, I still feel like I’m too late and I won’t be able to afford to buy a place for myself. I still cringe and die a little inside when I pay $25 for a meal, with the minimum tipflation of 15–20% on top of it. It really feels like my generation is cursed, and we will forever be forced to play a game of catch up. I don’t even feel like I should be complaining. The median income in 2020 was still only $39,500, so it should be just over $40,000 by now. In a way I know I’m lucky, yet it still doesn’t feel like it.
It still feels like I’m behind.
So many of us are.
It’s no wonder we are so anxious all the time.
When is it our turn to be happy…?
