Thursday, July 26, 2012

Lotteries and the American Dream: Let's Talk About Money (Part 4)

In Part 1, we sparked the conversation by asking if Mitt Romney is too rich to be president, and wondering why--when we value financial success so much as a culture--we sometimes demonize those who have it. In Part 2, we looked at the fine line between criminality and innovation, and what happens when someone follows the rules of the American Dream, but not the rules of the law. In Part 3, we examined the way that the rags-to-riches narrative depends on starting at the bottom.

Today, in Part 4, we're going to break the American Dream in half. We can boil the American Dream down to "work hard, and you will succeed" (admittedly, there are some variations on this, but that's the basic premise). Success, though, often gets boiled down, too. In our conversations with our peers, in our advertisements, in the things that we buy and the lives that we lead, success often means material wealth. The American Dream is a way to rise from rags to riches. So success often gets conflated with riches.

Skipping the Hard Work

But what happens if you can go straight to the "you will succeed" part without having to do much of the "work hard" part. Or, perhaps more common, what if you have been working hard, but you're not seeing much in the way of progress toward more wealth. Can you skip the hard work? Are you living the American Dream if you go straight to success?

There are a few different ways to make this leap. You could be born with the money. Jokes abound about trust fund kids and their inability to understand the "real world," but--at the end of the day--their wealth still provides them access to resources and power that people in the lower classes cannot reach. 

You could marry into money. Now, wait, I'm not saying that marriage doesn't take hard work. I'm not trying to drag up another version of the internal mommy wars about whether staying at home constitutes work or not. I'm just saying that "marrying up" has been a way to ascend quickly through the economic ranks in a non-traditional way. 

But perhaps the most widespread attempt at skipping the hard work part of the American Dream to get straight to the money is through the lottery. 

PowerBall 100 Million

Who Plays, Who Doesn't

I'll admit. I've driven past a PowerBall sign when those numbers climbed up into the hundreds of millions and fantasized about what I would do with that kind of money. I've thought about everything from the altruistic (opening a literacy center) to the escapist (a life of sipping mixed drinks on the beach) to the absurd (Chutes and Ladders-style architecture). There are even arguments that it makes some mathematic sense to play when the numbers climb that high. 

But I don't play the lottery. And it's not just because the odds are heavily stacked against me. It's also because the stories of lottery "success" aren't very successful. In fact, a lot of people who win large lotteries end up pretty miserable. 

But first, let's take a look at who plays. 

In short, poor people play. A study designed to make some people feel middle class (it asked for income in $10,000 increments, so most participants were in the middle range) and some people feel poor (it asked for income in $100,000 increments, so virtually all participants were at the very bottom), found that those in the "poor" group were much more likely to then spend their $5 reward for taking the survey on scratch tickets that were offered to them. The poor group bought 1.27 tickets a piece while the group that perceived themselves in the middle bought only 0.67 tickets. 

As Jonah Lehrer points out in this article, the lottery can be seen as a "regressive tax." People who make the least are willing to spend the most on those chances at success. On average, people making less than $12,400 a year spend 5% of their income on lottery tickets. 

Other studies have found that people at all income levels play the lottery at the same rate . . . when the jackpot has reached an abnormal high. Zip codes with higher incomes only participate at the same rate when there's more to win, but zip codes with lower incomes participate at the same rate all of the time. In other words, poor people play all of the lotteries, but rich people only play the big ones. 

Without money

What's It Mean for the American Dream?

The connection between the perception of wealth and the drive to play the lottery helps to demonstrate that wealth is relative. We determine our own financial value by looking at the wealth of those around us. And that's why media plays such a large role in determining how we view our own degree of wealth; it opens up the chance to see (and thus judge ourselves against) lifestyles that we wouldn't see otherwise (stay tuned for Part 5 for more on that). 

But that also means that people who "cheat" the American Dream by finding access to wealth that doesn't include the traditional path of hard work threaten our own perceptions. Now we have even more people to judge ourselves against and they're finding alternative paths to that lifestyle we're desperate to attain. 

But are they, really?

Reports suggest that lottery winners don't always fare so well, especially when they win big sums. For one, winning the lottery doesn't magically give the recipients financial literacy. Someone who was in money trouble before winning the lottery (and, as we just saw, these are the people most likely to be playing) does not necessarily have the tools to use that money wisely. One study showed that lottery players (winners and losers) were more than twice as likely to file for bankruptcy than the general public. 

Then there are the repeated stories of depression and failure from lottery winners who say that the win turned their lives upside down. Dr. Steven Danish, a counselor who works with lottery winners, explained that there are complications with receiving a windfall of cash:
Danish has counseled lottery winners for more than 12 years, and almost all his patients have had serious problems after collecting their winnings. After the initial shock passes, a sense of guilt often arrives, along with the hoards of people asking for money. Giving or leaving money to family -- including mysterious, long-lost relatives -- is often the biggest source of stress, he said.
Stories like these operate to remind us that the American Dream requires both halves of the equation. Notice, also, that we tend to focus on lottery winners who failed to find happiness rather than lottery winners who go on to report greater life satisfaction. Culturally, we're committed to maintaining belief in the story that working hard is part of the equation. For one, that story ensures that people keep working hard. 

But it's odd that even as we relish stories of people who tried to skip the hard work and didn't reach success, that many of us are still trying to find alternate paths to that success ourselves. As much as 60% of the American public plays the lottery. 

So do we see that hard work--and the skills and experiences we gain through doing it--valueless? Is your path through life just a means to an end? If you found a different way to get to that end (wealth and success), would you still value the path you're on?

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