Money "can’t buy me love,” The Beatles sang in the 1960s, but based on the latest OECD report it certainly helps when it comes to happiness.
In its latest “How’s Life?” report released Tuesday, the Paris-based international economic organization found that the global financial crisis hit citizens hard, with reported average life satisfaction diving in the worst-affected nations of the eurozone such as Greece and Spain.
Trust in government also fell, with less than half those surveyed across the 34-nation OECD saying they trusted their governments – the lowest level recorded since 2006.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
“This report is a wake-up call to us all,” OECD Secretary-General Angel Gurría said in a statement. “It is a reminder that the central purpose of economic policies is to improve people’s lives. We need to rethink how to place people’s needs at the heart of policy-making.”
Among the Asia-Pacific nations surveyed, the increasingly wealthy Australians and New Zealanders scored highest in the OECD’s Better Life Index, ranking 7.2 for life satisfaction, ahead of the United States on 7 and Japan and South Korea on 6 points each.
This reflected the high employment rate of the Australasian nations, at 73 percent compared to the OECD average of 66 percent. Japanese and Koreans also work considerably longer hours than their Southern Hemisphere counterparts.
Japanese Confidence Dips
The report said Japan ranked at the top in personal security, as well as being above average in education, skills and wealth, but was below average in subjective well-being and work-life balance.
From 2007 to 2011, Japan posed a cumulative increase in real household disposable income of around 4 percent compared to the eurozone’s 1 percent drop, with the labor market remaining stable.
However, life satisfaction and trust in government declined to one of the lowest levels in the OECD, perhaps reflecting a crisis of confidence following the March 2011 disasters. The number of households with all adult members consisting of the “working poor” rose to 12 percent, while the wage gap between men and women remained at one of the largest in the grouping.
South Korea’s Growing Gap
The OECD said South Korea “performs moderately well in overall measures of well-being,” but the gap between the have’s and have-nots widened. According to the report, average household net disposable income was $17,337, below the OECD average of $23,047, but the top 20 percent of the population earned more than five times more than the bottom 20 percent.
South Korea performed strongly in the quality of its education system and life expectancy, although it scored lower on environmental indicators such as water quality.
Life Balance Worsens for Aussies, Kiwis
New Zealanders ranked at the top for health and above average in civic engagement and environmental quality, although below average in wealth and work-life balance.
According to the report, New Zealand posted a cumulative increase in real household disposable income of around 6 percent from 2007 to 2011, well above the eurozone, although life satisfaction declined to 73 percent, down from 81 percent due to worsening employment conditions.
Nevertheless, trust in government actually increased, while the nation’s gender wage gap was the lowest in the OECD.
Across the Tasman, the OECD found Australia ranked top in civic engagement and above average in all other indicators with the exception of work-life balance.
Like their neighbors, real household disposable income grew in Australia by around 6 percent in the period surveyed, but employment conditions remained relatively stable. Trust in government remained unchanged at 53 percent, while life satisfaction dropped three percentage points to reach the New Zealand level.
According to the OECD, “the full consequences of the economic downturn, in terms of people’s health or loss of skills will take time to play out,” particularly for the hard-hit nations of the eurozone.
Yet while economists have reported that increased wealth has diminishing returns on happiness, a recent study has found that being happy can improve people’s finances.
According to the University of Western Sydney’s Professor Satya Paul, a study of 9,300 Australians between 2001 and 2005 found that happier people earned more money. After accounting for other factors such as age, education and location, the study found those most satisfied with their life earned an extra A$1,766 a year compared with those on the bottom of the happiness scale.
“Happy people are more active, more productive and get less upset by work,” Paul told the Age newspaper, noting that poor health reduced income by nearly A$800 a year.
Based on Paul’s findings, Bobby McFerrin’s “Don’t Worry, Be Happy” seems the best song for those hoping to get rich, even if you can’t buy happiness.