America Is Richer Than Ever — So Why Are Americans So Unhappy?

Ordinary Americans today enjoy material comforts that would have astonished monarchs for much of human history: temperature-controlled homes, compact cars with extraordinary power, pocket-sized computers that connect us to nearly anyone and anything, anesthetics that make surgery bearable, titanium joint replacements, pressurized jets that cruise at 40,000 feet, and even fast-food novelties built from industrial ingenuity.

And yet, the public mood does not reflect unalloyed delight.

The Puzzle: More Goods, Less Cheer

Measured in real terms, America’s median household income is about 26 percent higher than in 1996. Over that span, though, headline measures of subjective well-being have not risen—and in some cases have fallen. The General Social Survey shows a roughly 9 percentage-point rise in people saying they are “not too happy” since the mid-1990s, while the share saying they are “very happy” has fallen by more than 9 points. Gallup recorded an all-time low share of Americans saying they were “very satisfied” with their lives in 2025.

Commentators have coined terms like the “vibecession” to describe the recent malaise and offered many explanations—lingering effects of the pandemic, unaffordable housing, social isolation, or simply the psychological aftershocks of a mass-death event. But many social scientists see a longer-running phenomenon: affluent societies have become materially richer without a corresponding rise in reported happiness.

Why Growth Doesn’t Always Mean Greater Happiness

Research helps explain the paradox. Within countries and across individuals, higher income correlates with greater life satisfaction. But when analysts track rich countries over decades, the relationship between rising national income and rising national happiness often weakens or disappears.

One leading explanation emphasizes relative status. Once basic needs are met—food, shelter, sanitation, health care—additional consumption often buys status more than intrinsic satisfaction. Status is zero-sum: one person’s ascent often implies another’s relative decline. Panel evidence (for example, a 2023 study from UC Riverside) finds people report more happiness when their relative income rank improves, even if their absolute income barely changes.

In short: money can increase happiness by improving your status, but rising average incomes don’t change everyone’s status simultaneously.

Degrowth: An Appealing But Troubled Solution

Environmental thinkers have seized on this dynamic. If much affluent consumption is status-driven and wasteful, perhaps rich countries can deliberately shrink material throughput—"degrow"—without harming well-being, while freeing resources for poorer countries and for high-impact public goods.

That argument has intuitive appeal, but it runs into empirical and technical obstacles. First, well-being surveys can be noisy across decades—cultural shifts affect how people report feelings. Second, some research links higher national growth to higher well-being even in wealthy countries. Most importantly, even if growth yields diminishing returns, loss aversion suggests that people react more strongly to income losses than to equivalent gains. Historical episodes—like the post-COVID inflation shock—show that declines in purchasing power reduced life satisfaction even while relative positions sometimes improved.

The Material Reality: Essential Sectors Are Resource-Intensive

Degrowth proponents often propose growing high‑value sectors (health care, education, clean energy) while curtailing frivolous consumption (private jets, oversized SUVs, speculative entertainment). But modern essential sectors depend on complex, resource- and energy-intensive supply chains. An MRI scanner, for example, requires superconducting alloys, liquid helium, rare earths, and large energy inputs; pharmaceuticals rely on petrochemical feedstocks and climate-controlled production; dialysis uses huge volumes of ultrapure water and single-use plastics.

Crucially, many transformative technologies emerged because of large consumer markets. Semiconductor fabrication and lithium‑ion battery innovation were driven by mass demand for electronics and phones—demand that helped amortize huge fixed costs and accelerate innovation that now serves medicine and clean energy. Dramatically shrinking consumer markets risks undermining the industrial base that enables advanced medical devices and green technologies.

Policy Implications: Reorient, Don’t Simply Shrink

This is not an argument against environmental action. If planetary limits force rapid reductions in material throughput, societies will face grim trade-offs. But absent imminent collapse, the better route is to reorient production toward goods and services that demonstrably raise welfare and to restructure institutions so people enjoy more time and less status pressure.

• Promote health, education, and clean-energy investment while discouraging wasteful, addictive, or status-driven consumption.
• Adopt labor-market reforms—paid leave, shorter workweeks, stronger social safety nets—that let people buy time rather than goods with their incomes.
• Design regulations and incentives that support necessary industrial capacity for high‑value sectors even as resource efficiency improves.

Ultimately, the article’s central claim is modest: money is buying Americans less happiness than we might expect, and fixing that requires changing what and how we produce—not simply making the economy smaller. As long as disease, suffering, and loneliness exist, cutting overall production without careful reallocation will likely leave people worse off.

This reporting was supported by a grant from Arnold Ventures. Vox retained full editorial control over the content.