Economy related wellbeing and welfare

Industries, trades and income can be understood as material wellbeing. The social norms of Western societies grounded on paid work play a key role in people’s perceived wellbeing. (Vaarama, Moisio & Karvonen 2010, 12.) According to a research by Diener

& Seligman (2004), a nation’s economy and political system play an important role in the population’s wellbeing. For example democratic, effective and stable government as well as high social capital and having a strong economy with a low rate of unemployment are crucial factors contributing to the nation’s welfare. A welfare state is typically based on a representative democracy and investing in wellbeing research, thus being often particularly statistical. The Finnish institutional structure of the nation is called a welfare state and it has a significant responsibility for its inhabitants’ wellbeing.

The objective of the Finnish welfare policy is to ensure equal possibilities for wellbeing for every citizen by promoting the individuals’ health, prolonging the functional

lifespan, assuring the high quality of life and reducing the health differences between the population groups. (Saari 2011, 60, 74; Vaarama, Siljander, Luoma & Meriläinen 2010, 126.)

Hagfors and Kivioja (2011, 169) point out that previously a nation’s welfare and economic growth were considered almost as synonymous. Today, the connection between these two is still an important theme in sociopolitical rhetoric. The prolongation of economic growth is seen as one of the prerequisites for secure welfare.

Karisto (2010, 15–16) argues that welfare is the number one priority in order to actualize individuals’ wellbeing. The dominant discourse notes that welfare is generated as long as organizations’ operations are taken care of and the economy functions well.

The organizations’ responsibility for the general welfare is met when shareholders receive their profits, as this creates more employment and income. In social politics welfare is understood as a sense of safety: successful regulation of problems and risks.

Related to the topic, Hagfors and Kivioja (2011, 175) represent a theory of a virtuous circle, which indicates that the state’s investment on welfare reduces inequality and strengthens social capital, increasing the population’s wellbeing. To complete the circle, the population’s wellbeing supports the welfare state and its functions, resulting in the continuity of the process.

When examining the relation of wellbeing and income on individual level, Diener and Seligman (2004) state that rewarding and engaging work with adequate income is a vital part of a person’s wellbeing. Korkalainen and Kokko (2008) report that a good professional status and education has often a positive effect on an individual’s wellbeing, yet when income and the professional status rise higher, the correlation to wellbeing drops. In addition, the citizens of wealthier countries are usually more satisfied with their lives than the inhabitants of economically humbler nations.

However, when comparing the statistics inside the countries, the wellbeing differences between the rich and the poor almost totally disappear. (Korkalainen & Kokko 2008.) According to Allen, Carlson and Ham (2007), people rank happiness and satisfaction in life ahead of money as a life goal. On the other hand, several cross-sectional studies indicate there is a positive correlation between individuals’ incomes and their subjective wellbeing (Diener & Seligman 2004). However, Korkalainen and Kokko (2008) reveal

that doubling the income between the 1950s and the 1990s did not affect the Americans’ subjective wellbeing. Even though economic progress can enhance the quality of life and money is related to wellbeing to the extent of ensuring the basic needs, it can also increase mental and social problems (Allen, Carlson & Ham 2007).

Vaarama, Moisio and Karvonen (2010, 13) state that when human basic needs are secured by the standard of living, the significance of immaterial factors affecting the subjective wellbeing increases.

Contrariwise, Stevenson & Wolfers (2013) assert that there is internationally a positive relationship between income and wellbeing without the alleged saturation point. As is mentioned in their study, the more money people have, the happier and more satisfied they are with their lives. The findings of Denier and Seligman (2004) confuse the wellbeing-money relationship even further. They state that people who report they are happy subsequently earn higher incomes than the ones who reported to be unhappy. On the other hand, the nations that have grown in wealth have not reported as high increases in wellbeing. Diener and Oishi (2005) suggest that when regarding happiness, lack of friendships and respect are more significant factors than poverty. Nevertheless, it is noteworthy to remember that the people living in the most inadequate environments have probably not had a chance to answer many studies. Therefore, generalizations based on these results are somewhat limited. (Suoninen, Lahikainen & Pirttilä-Backman 2011.)

In addition to income, expenditure and spending based on the needs are equally important (Vaarama, Moisio & Karvonen 2010, 12). The satisfaction of the basic and some of the higher needs often match the person’s standard of living. As the studies in the previous paragraphs have shown, a high standard of living usually correlates with greater perceived wellbeing for instance via enabling traveling. From a societal point of view, the connection between wellbeing and traveling is significant since traveling is considered to maintain individuals’ ability to work and cope in working life. This results in better productivity and therefore economically more flourishing businesses as well as more stabilized societies through increased income of the taxpayers. (Suontausta

& Tyni 2005, 34.)

High economic capital is often connected to indulgence. Consumerism can be seen as the expenditure-centered lifestyle that defines the culture of consumption, which can be understood as the commodities and services the households buy or acquire with their own work. (Suontausta & Tyni 2005, 82.) Bauman (2002, 79) illustrates a life filled with possibilities as a smorgasbord that is so full of savory food that one is not able to even taste them all. The eaters are the consumers who have to decide the most valuable and best options for them since they cannot have everything. The consumers feel intimidated by too many possibilities. In addition, Bauman (2002, 93–94) argues that consumption is not about satisfying one’s needs. It is about answering to one’s urges.

An individual expresses him- or herself through his or her possessions.

Kashdan and Breen (2007) argue that existing consumerist society promotes a materialistic message by saying “the pursuit and possession of material goods, income and wealth is the route to increased wellbeing and quality of life”. However, Suontausta and Tyni (2005, 84–85) call attention to that consumption is not only the satisfaction of materialistic needs but also searching for one’s own social status and building a social identity. It has become a central tool to differentiate oneself from others and to present oneself. The social stratification of wellbeing can also be observed from the perspective of consumerism: by whom, from where, by how old and from which “class” money is spent on wellbeing services.

Nyrhinen and Wilska (2012) describe how a responsible consumerism trend matches not only the monetary value of a product but also the intellectual and aesthetical pleasure as well as better quality of life. Traditional hedonistic and materialistic consumerism has met more responsible and non-materialistic perceptions of luxury.

Although luxury is often related to a high social status and monetary value, handmade goods produced ethically and ecologically are considered an indulgence in today’s society. Additionally, the rise of “feminization”, i.e. women having more purchasing power, has lead to distinguishing authenticity and immaterial, personal experiences as luxury.