Up to 75,000 Dollars, Money Buys Some Happiness

We have all heard the saying that “money can’t buy happiness”. However according to a new study from Princeton University, low-income levels are often associated with low emotional well-being and life evaluation, while higher incomes are associated with the opposite. They did find that the effect diminished drastically past annual incomes of $75,000.

AFP reports:

The latest study adds a new element to a long-running debate among academics and others on whether money can buy happiness -- the definition of which can be elusive.

"We conclude that high income buys life satisfaction but not happiness, and that low income is associated both with low life evaluation and low emotional well-being," the researchers write in the Proceedings of the National Academy of Sciences.

They said the effect of income on the emotional dimension of well being "satiate fully at an annual income of around 75,000 dollars."

"More money does not necessarily buy more happiness, but less money is associated with emotional pain. Perhaps 75,000 dollars is a threshold beyond which further increase in income no longer improve individuals' ability to do what matters most to their emotional well-being, such as spending time with people they like, avoiding pain and disease, and enjoying leisure."

The research was based on an analysis of responses to 450,000 responses to the Gallup-Healthways Well-Being Index, a daily survey of US residents conducted by the Gallup Organization in 2008 and 2009.

The level of 75,000 dollars was just above the median income of 71,500 dollars for US households in 2008.

Read more here

96% of U.S. Metro Areas Lost Construction Jobs this Year, Research Finds

From The LATimes.com:

Construction employment dropped this year in more than 96% of the country’s metropolitan areas, according to research released today by the Associated General Contractors of America.

Of the 337 metropolitan areas, construction-related jobs plunged in 324 regions between August 2008 and August 2009, according to an analysis of federal employment data.

The Reno-Sparks area of Nevada was the hardest hit, with a 35% dive, followed by the 33% sag in the Duluth region spread over Minnesota and Wisconsin. Construction employment in Tucson plummeted 31%, and it slumped 30% in Wenatchee, Wash.

Several California areas suffered deep declines. Construction jobs in Redding dipped 28%, while employment in the construction, mining and logging sectors in El Centro dropped 27%. The Riverside, San Bernardino and Ontario region, as well as the Sacramento, Arden-Arcade and Roseville area saw construction jobs slide 23%. Construction, mining and logging work fell 23% in the Santa Cruz and Watsonville zone.

Statewide, California’s construction employment numbers dropped 19%, from 798,400 workers to 650,200. Construction jobs in the Los Angeles, Long Beach and Glendale division fell 12%, from 145,400 workers to 127,300. The best performer in the state was the Hanford-Corcoran metropolitan area in Central California, which was ranked 95% nationwide with an 8% drop in construction, mining and logging jobs....

...The 13 areas around the country that had an upward trend in construction employment collectively had 2,800 more jobs.

The construction industry overall has lost 1 million jobs.Only Columbus, Ind., enjoyed a double-digit increase, with a 14% rise in construction employment. The number of jobs in Anderson, Ind., rose 6%, while Tulsa, Okla.; Longview, Wash.; and Baton Rouge, La., each had a 3% jump.

The numbers were paired with a new plan from the Associated General Contractors to try to revive the construction industry. “Build Now for the Future: A Blueprint for Economic Growth” would focus on stimulating new construction in the private sector by repealing the alternative minimum tax, boosting and extending tax credits and cuts, and investing in infrastructure.

Fed Rejects Geithner Request for Study of Governance, Structure

From Bloomberg.com:

The Federal Reserve Board has rejected a request by U.S. Treasury Secretary Timothy Geithner for a public review of the central bank’s structure and governance, three people familiar with the matter said.

The Obama administration proposed on June 17 a financial- regulatory overhaul including a “comprehensive review” of the Fed’s “ability to accomplish its existing and proposed functions” and the role of its regional banks. The Fed was to lead the study and enlist the Treasury and “a wide range of external experts.”

Some top central bank officials, after agreeing to the review, saw a potential threat to Fed independence after the Treasury released the proposal, two of the people said. The Obama plan said the Treasury would consider recommendations from the review and “propose any changes to the Fed’s governance and structure.”

“It is not obvious at all why that is a Treasury responsibility or even appropriate why the Treasury would undertake that kind of study,” said Robert Eisenbeis, chief monetary economist at Cumberland Advisors Inc. in Vineland, New Jersey, and a former Atlanta Fed research director. “The Fed was created by Congress and it is not part of the executive branch.”

In Debt, Do They Part? Recession Delays Divorces

Yesterday I came across this interesting article from Philly.com discussing how more unhappy couples these days are deciding to stay together for financial reasons. According to the author, the recession has made it difficult for many couples that would like to file for divorce, but simply cannot afford to do so.

Breaking up is hard to do, but during a recession, it's even tougher.

Couples who want to split up often are handicapped: by the high cost of attorneys' fees, because they can't sell their homes or can't afford to set up two households.

So some of them are stuck living together - miserably.

"Some are agreeing to be roommates and stay at separate ends of the house," said attorney J.J. Dahl, who handles about 65 divorce cases each year. "And we have some who have gotten divorced and they're staying in the house together until the market improves and they can sell it."

This is new territory for Dahl, who says that none of her clients was doing this two or three years ago. But today, she finds that 25 percent of her clients are living together to make ends meet until they sell the house - and another quarter have given up and are losing their homes to foreclosure because they couldn't stand living together anymore.

Nationwide, the divorce rate appears to be the lowest since 1970, according to preliminary numbers from the National Center for Health Statistics.

"There is a lot of fear, so people are staying put," said Gary Nickelson, president of the American Academy of Matrimonial Lawyers. "People look at their assets and their liquidity, and they realize they don't have any."

Examples of How Tax Increases could Hit the Rich

Over the weekend, I came across this informative article from the Associated Press explaining how families would be impacted if the House’s new tax increate were to become law. As you can see from the examples below, some taxpayers could face a huge tax bill next April.

• A family of four making $450,000 a year would pay $103,600 in federal income taxes, an increase of $1,000.
• A single filer making $450,000 a year would pay $112,200 in federal income taxes, an increase of $7,100.
  
• A family of four making $800,000 a year would pay $220,800 in federal income taxes, an increase of $30,000.
  
• A single filer making $800,000 a year would pay $231,300 in federal income taxes, an increase of $30,700.
  
• A family of four making $5 million a year would pay $1.81 million in federal income taxes, an increase of $443,500.
  
• A single filer making $5 million a year would pay $1.83 million in federal income taxes, an increase of $452,000.

Paying Taxes May Make People Happy

As odd as it may seem, that is the conclusion being drawn from a new study from University of Oregon. "Paying taxes can make citizens happy," claimed Ulrich Mayr, a professor of psychology. The study found that two reward-related areas of the brain lit up during a taxation test. These areas typically are activated when some one experiences feelings of satisfaction, such as after having eaten a meal. "The fact that mandatory transfers to a charity elicit activity in reward-related areas suggests that even mandatory taxation can produce satisfaction for taxpayers," the study said. For more information on the study check out CBC News.