The Covid crisis is getting in the way of our pursuit of happiness.
Perhaps unsurprisingly, it has made us all more concerned about our health, both physical and mental, and it is also putting relationships under pressure. In addition, job satisfaction, the other leading driver of our sense of well-being, is being challenged for many as work changes, or in some cases disappears altogether.
These are findings of statistics from across Europe reported by McKinsey in a recent article, Well-being in Europe: Addressing the high cost of COVID-19 on life satisfaction. As the subtitle says, “Recovery will depend on saving lives, sustaining livelihoods, and supporting quality of life”.
It is to my mind completely counter-intuitive to try to convert well-being into monetary terms (another case of misleading apparent accuracy of measurement when money is not the answer), but that doesn’t stop McKinsey, which delights in putting specific numbers even to the most subjective concepts. It leads them to the striking conclusion that Covid has led to a reduction in well-being three times as large as the fall in GDP experienced by the continent:
This analysis is particularly counter-intuitive given that McKinsey itself states that: “When it comes to life satisfaction, leaders tend to overestimate the relative importance of money and underestimate the value of non-monetary factors.”
To re-emphasise the importance of those non-monetary factors, the largest drivers of the reduction in well-being, or the fall in happiness, are the non-financial. By far the most substantial drop is in overall satisfaction with relationships; second, but with an impact less than half as large, is the fall because of lower health outcomes. Only after this come the more financially-driven factors: third is reduced income, and half as big as this is the impact from increases in unemployment. While one assumes that this last factor may have an increasingly negative impact as the extraordinary employment support measures that exist in much of Europe are unwound, it would have to quintuple in scale to reach the significance of the relationship element.
The conclusion is simple enough: leadership out of this crisis will take more than a focus just on the financial, just on the narrowly understood economic life. Instead, it will need to foster well-being, fairness and a focus on enabling the pursuit of happiness. As I suggested in The pursuit of happiness, we need leaders who remember what it is that makes life worthwhile.