Feeling poor compared to your neighbors can harm your health

• A study by Canadian public health experts linked income inequality to mental health trends.
• The study suggests that feeling poor compared to others increases risk of health problems.

Money could buy you happiness.

But it may be less about how much money you have and more about how much you have compared to your peers.

That's according to a recent study by public health experts in Canada who found stark income inequality is causing a mental health crisis.

The study, first published in the fall of 2023, suggests that feeling poor compared to those around you can increase your risk of potentially fatal health problems and substance-use disorders — a phenomenon researchers call “deaths of despair.”

It assessed Census income data, community health survey data, and hospitalization and death rates since 2006. The concept is modeled after research published in 2015 with US-based data.

In the last decade, Americans have seen inflation rates double, and it’s becoming more expensive to find housing, buy groceries, and support a family.

Recent data from the US Census Bureau found that, between 2019 and 2022, the top 1% of American households by income held roughly 26.5% of household net worth, while the bottom-fifth held just over 6% — and the gap is growing.

Rising rates of drug overdose, alcohol-induced liver cirrhosis, and suicide have been an increasing concern in Canada and the US for the past decade.

Researchers said these indicators of declining community health are directly tied to economic conditions.

Income inequality erodes social cohesion and could lead to loneliness

Dr. Claire Benny is a postdoctoral fellow at Public Health Ontario and the lead author of the Canadian study. She said income inequality often provokes feelings of shame and unhappiness.

Wealth gaps cause serious social comparison, Benny said, and people don’t connect well with their neighbors if they see themselves as having exponentially more or less money than their peers. Without the support or trust of neighbors, she said social cohesion begins to erode.

“It's hard to not trust your neighbors,” Benny said. “It's hard to live in a space where you don't trust what's going on in your neighborhood or you don't understand what's going on in your neighborhood.”

This erosion of social cohesion could be one of the drivers of the US's loneliness epidemic, declared by Surgeon General Vivek Murthy. Loneliness also has adverse effects on our body, increasing anxiety and stress hormones, and hindering immune and heart health.

Observing the ultra-wealthy through social media also enhances public perception of income inequality and fuels outrage over the idea that rich people are out of touch with the economic standing of average families.

A 2023 survey by Schwab also found that sixty-one percent of Gen Zers and millennials feel wealthy when they can pay for a lifestyle that is similar to their friends, and their perceptions of wealth are largely based on what their friends can afford.

Monetary stress — and a loss of community connection because of monetary stress — shapes well-being over time, Benny said. Complex substance-use disorders are impacted by these societal factors and often coincide with anxiety and depression, she said. She said historically marginalized communities and young and middle-aged men are at the highest risk.

“Reducing income inequality from any standpoint, whether it be economic or social, it just makes sense,” Benny said. “Because when we reduce income inequality, we reduce hospitalizations and we reduce deaths.”

Reducing wealth gaps could save lives

Areas with high disparities in income and social capital tend to have fewer public health services available for residents, Benny said. People with less money might have a more difficult time accessing medicine and mental health services compared to their wealthier neighbors.

For substance-use disorders specifically, Benny said harm mitigation looks like increasing community access to supervised consumption sites, crisis response services, and needle exchange programs. She also mentioned that policies for opioids and drugs should encourage safe, non-contaminated supply.

Along with healthcare measures, Benny said cities should take actionable steps to reduce income inequality through taxing high-income groups, raising the minimum wage, and bolstering income programs. Guaranteed basic income pilot programs are becoming increasingly popular in many US cities, and have been shown to help unhoused people find shelter.

Income gaps exist in all areas, she said, just to differing degrees. Moving to a new city or neighborhood is not the solution. Improving public health outcomes and reducing social stigma around money needs to start on a broad scale by addressing economic disparities, she said.

“If we're wanting to reduce the burden that this holds on to human health, we need to seriously consider addressing the root cause — which is income inequality,” she said.