Being Broke Around Rich People Messes With Your Longterm Health

That feeling when you split the bill and your share equals...rent? It isn't inconsequential.

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Apr 26 2017, 12:00pm

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Whether it comes to having a fulfilling career, a partner you can indulge in cheesy Insta-habits with, or the most obvious one—money—it's human nature to want to keep up with the Joneses. Our tendency is to want to purchase the type of upscale material items that our friends have, because we're worried that if we don't, we'll appear less socially significant than they are.

But most of us don't covet our friend's Tesla, Louis Vuitton handbag, and six-figure bank account because we want them, or want to level the playing field of bougie. We're driven to purchase these items because when we compare ourselves to our wealthier peers, we feel worse about ourselves—and those social comparisons can affect not just our self-esteem, but our physical health, moral values and even racial biases.

While it seems obvious that wanting for stuff can make us feel inadequate, Keith Payne, a psychology professor at the University of North Carolina, Chapel Hill, and author of the new book, The Broken Ladder: How Inequality Affects the Way We Think, Live, and Die argues that our perceptions of income inequality affect us more deeply than we think. His findings say that these perceptions skew the ways in which we make decisions and the intricacies of our most important relationships.

Tonic spoke with Payne about his book and how the disproportion of wealth in America affects more than just the economy.

Tell me a little about how your personal background inspired you to write this book.
I grew up in rural Kentucky, two hours from Louisville. Kentucky has high poverty and high wealth inequality, but it wasn't until college that I realized people saw the world differently than I did. Surrounded by middle-class peers for the first time in my life, I realized that they thought differently from the people I grew up with—they thought about the future and they were more risk-averse. I came to realize that my feelings had more to do with inequality than poverty, and this is what I talk about in my book.

How does inequality affect us psychologically?
Everyone knows that the rich are getting richer. If you look at the wealth distribution in our country, the top 1 to 5 percent of Americans are wealthier than they were 20 years ago, but the bottom 60 percent of the country has financially stayed the same since the 1960s. If you look at this objectively, it looks like we're doing great, but if you examine our cultural conversations, people don't feel like everything is rosy.

Because here's what happens: When the top gets richer, everyone compares themselves to those people, and this happens even if your family has the same amount of money that it's always had. We feel poorer by comparison. This feeling changes our aspirations, and we feel like we need more to get by because we're looking at people who have more. It's what we call "upward social comparisons"—our inclination to pay attention to the "top," to those who are doing better than we are.

So we tend to look in only one direction?
As humans, we identify more with winners than we do with losers. For example, look at reality television. There are many shows about wealthy people like Real Housewives and The Kardashians, but there aren't any shows about repairmen. Even though we criticize the Kardashians, we want to have a lifestyle similar to theirs. The net effect is that when the top gets richer, everyone feels like they need more, which causes us to take more risks.

The research I've conducted shows that when there's more income inequality, we pay more attention to the winners, and we're more likely to place high risk/high reward bets. We see this pattern when we look at Google searches, too. In states like New York, Connecticut, and Wyoming where there's more income inequality, people search for riskier behaviors like "payday loans," "no-interest down loans," and "get rich quick schemes." They are more willing to take financial risks even if there's hell to pay tomorrow.

In your book, you mention that these risks also affect people's emotional and physical health; can you say more about that?
In these cities and states [with greater wealth disparities], there are higher rates of drug use, obesity, and cigarette smoking, and as a result, people have shorter life expectancies. They are also more likely to suffer from depression and anxiety. The irony is that we associate many of these problems with income insecurity, but these things are more associated with inequality, not with poverty.

There's a lot of talk in the media about narcissism. Do you believe that inequality is making people more narcissistic?
I am not aware of any research on this topic, but I do know that social comparison causes us to focus more on our appearance. One of the findings in my book shows that in areas of greater income inequality, people are more likely to display their wealth. They are the ones who shop for luxury goods, buy fancy cars and wear designer clothing. I am not sure if it makes us more narcissistic, but it causes us to put more emphasis on how we appear to others.

What cultural conversation do you hope your book inspires?
I hope my book conveys that even if we can't stop comparing ourselves to others, we should compare flexibly and wisely. For example, instead of always looking up the ladder, we can compare ourselves to how we were doing in the past, especially if we're doing better now. We can also compare ourselves to those who have less than we do, which helps us feel grateful for what we have. These types of comparisons give us the same boost of feeling like we're in the group of the "haves" instead of the "have nots," which helps us feel like true winners.

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