For the better part of 100 years gross domestic product has been the indicator of overall economic health. Heather Boushey in a New York Times Op Ed notes that according to the gross domestic product, the United States is in the longest period of economic growth in recorded American history. The gross domestic product or GDP is the sum total of all that’s produced in the economy.
As Bousey writes, the problem with this metric is that it only measures things with a price tag. As baby boomers age and provide more care to grand-grandchildren as well as their aging parents, the hidden costs and revenues of these services are not measured. By the same token, this metric fails to measure charitable services like soup kitchens, shelters and other services where there is no fee and the costs to run such programs are hidden by private donations and budget line items in charitable organizations like churches.
A further failure of the GDP as the dominant metric for measuring the US economic health is its failure to take into account the number of medical bankruptcies that happen in the United States. While there is considerable debate about the actual number of Americans who face medical bankruptcy, there is no doubt that the cost of health care in the United States is higher than it is any place in the world. Also, what is not in doubt is that big pharma and big insurance continue to rake in record profits and contribute to the GDP in ways that distort the overall financial well-being of our country and its peoples.
In France and Australia there is a move to include quality of life and environmental factors in measuring economic well-being. Currently in the United States, the cost of non-sustainable activity on the environment bears a price tag that is recorded in the GDP. This means that if a company creates a toxic spill of chemicals or oil, the cost of the clean-up is recorded as an economic output. Developing a new measurement for economic growth and well-being would include the environmental impact such disasters have on the people who are affected. This is an invisible cost and adds to our degradation of the environment.
Developing and using a different metric to measure a society’s economic viability is good news for the poor. It means that factors impacting quality of life and equal access to goods and services may finally begin to be included in measurements of a society’s economic health. Overall quality of life and viability of financial assets in relation to debt become real measures for gauging society’s health.
In short, it means that measuring the well-being of the 1 percent at the top stops being the standard that measures all economic health.
According to David Jolly in a September 15th article in the global business section of the New York Times, “The Himalayan kingdom of Bhutan has chosen to focus on ‘gross national happiness,’ complete with…9 domains and 72 indicators of happiness.”
If such a metric were adopted in the United States we would have a much more complete vision of what the majority of people face in their daily economic lives. The United States is the largest economy in the world. One would think that, as such, the overall economic health of its people would be among the highest in the world. Nothing could be further from the truth.
According to the US Census Bureau, 38.1 million people live below the federal poverty line, about one in eight. The figure is set at $25,465 for a family with two adults and two children. According to an article in the Washington Post, over one half of all families in poverty have just one parent. This further lowers the total family income. It should further be noted that there is NO place in the United States where someone can work a minimum wage job and find affordable housing. The lack of affordable child care also contributes to overall family financial strain.
Adopting a more inclusive metric to measure economic health is a step toward some measure of economic justice for the poor. If the data from such metrics were used to inform national policy and social programs we might actually do something to help the poor instead of just shaming them for being poor. If we created a measurement that includes everyone, we would stop measuring economic well-being by the standards of the richest of the rich. Instead, we would come down to earth where most people live just one or two paychecks away from financial disaster.
In the richest country in the world, with the largest economy in the world, we can do far better than we are currently doing. As long as we use the metrics of the rich, the plight of the poor will be absent from the conversation.
The measure of any society’s humanity is how well is cares for its weakest and poorest members. Despite 124 months of increase in our GDP, we are losing ground in our humanity at an alarming rate. Profit before people is a poor strategy for long term social stability.
The Irreverent Reverend 