We were happier during the COVID-19 pandemic. The reason is money

Australians are in search of "dopamine and serotonin hits" to cheer them up, according to a Melbourne store owner. (ABC News: Maren Preuss) Australians felt a greater sense of satisfaction during the pandemic than when restrictions were fully lifted, ABS data has shown. The nation's "cost-of-living crunch" and falling real wages are behind falling life satisfaction, according to a leading urban economist. With a growing number of jobs predicted to be replaced by AI, Australians' sense of wellbeing could be further tested. Link copiedShareShare articleThe COVID-19 pandemic challenged Australians in ways they hadn't been tested before: with curfews, mask mandates, border closures, restrictions on movement and the shutdown of normality. Those severe measures may have helped keep Australians alive, but they also exacted a substantial toll in many other ways. The shock is that data from the Australian Bureau of Statistics (ABS) suggests we were actually happier in 2020 than we are now. "We're feeling worse about the world today than we were during the pandemic lockdowns," Terry Rawnsley, urban economist at consulting firm KPMG Australia, says. "When you look at life satisfaction on a scale of one to 10, in 2020, when we're in the middle of the pandemic, life satisfaction was 7.2 out of 10. Last year, it was 7.1." Terry Rawnsley says financial pressures have eroded many Australians' satisfaction with life. (Supplied: KPMG) The ABS data shows how increasing financial stresses mean people feel less satisfied with their lives than when they couldn't travel more than 5 kilometres from their homes. "Real wages are lower than they were in 2020, median household wealth is actually flat over that five-year period, per-capita spending is also pretty flat, so it's no surprise people are less satisfied with their lives because they're feeling that financial pressure." Real wages are your wage minus the impact of rising costs. So, if your salary goes up, but the speed of inflation is higher, your ability to use that money — your purchasing power — goes down. For most Australians, that is what has been happening. The COVID pandemic was a world of individualism and screens, with people isolated behind masks and keeping their distance through Zoom calls. It is the complete opposite of the warm and deeply analogue vibe in Melbourne store and craft workshop, That Paper Joint. Zoe Crook says life is better for her in 2026 than during the pandemic. (ABC News: Maren Preuss) Selling pens and rolls of stickers before she sets up for a collage and journalling class, co-owner Zoe Crook promotes a calm and sense of togetherness at the shop in Brunswick. "For myself, life is way more satisfying than it was in the year of 2020," she says. What we can experience today is the opposite of the stark isolation of the COVID pandemic. Stretching about 19 months from March 2020, that period was marked by uncertainty about health and the future. But not about money. The federal government provided immense financial support through the first year of the pandemic. It doubled most welfare payments and effectively ended poverty, creating the income support scheme JobKeeper to help businesses pay their existing employees. Maximillian Malone says life carries "larger burdens" today than during the pandemic. (ABC News; Maren Preuss) Zoe's partner, Maximillian Malone, recalls 2020 as a simpler, easier time. "I'm working harder these days to achieve a level of happiness. So, whilst overall I'm more satisfied, there's way more on my plate in to reach that level. So, larger burdens," he says. That sentiment makes sense to psychologist Sue Read. Sue Read says financial challenges have become a "chronic stressor". (ABC News: Stuart Carnegie) "I think one of the challenges is that during COVID, people felt like there was a sense of togetherness and that there was going to be an endpoint," she says. "I think when we look at these ongoing financial pressures, it feels like a chronic stressor." Ms Read, of Life Unlimited, says unlike the time of the pandemic, our stress today now seems more individual. "Although it was very distressing, we were having Zoom drink catch-ups, we were having financial support through the government, and there was this sense that there would be an endpoint," Ms Read says. Sue Read is a registered psychologist with more than 20 years of clinical experience. (ABC News: Stuart Carnegie) Data from more than 13,000 households informed the research. It was collected between May and June 2025, after the initial impact of US President Donald Trump's "Liberation Day" changes to global tariffs. The economy grew just 0.3 per cent in the first quarter this year, gross domestic product per capita went backwards, and interest rate rises and cost-of-living pressures are weighing on households. The surveys were undertaken before inflation started rising, resulting in the Reserve Bank lifting interest rates, and before

We were happier during the COVID-19 pandemic. The reason is money

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