New Report Looks Beyond GDP
The fifth annual MetLife survey of American ideals shows an interesting trend: priorities are shifting from achieving professional success and material wealth to having a greater sense of personal fulfillment. The survey found that slightly more respondents chose personal fulfillment as the key to fulfilling the American dream rather than having enough money. After decades of working more and bringing home less, are we reaching the point where the American dream focuses on quality and not quantity?
This shift is particularly noticeable among younger generations. Millennials preferred a sense of personal fulfillment over having enough money by a margin of 28-20. Nearly a third of Millennials surveyed thought it was more important to have close family and friends than a roof over their heads. And, they had the highest percentage of respondents who said achieving the American dream in their lifetime was important but did not look to traditional markers (like a house, getting married, etc.) to achieve it.
At the same time, half of Millennials surveyed also said they work harder than their parents did at their age. They are working harder but material wealth is becoming less important and personal fulfillment is taking its place. But, how does that mesh with our economic model, which only counts growth as success and measures economic growth through how much we buy and spend?
A new report from Demos, Beyond GDP: New Measures for a New Economy, addresses these very issues and challenges the way we measure the economic, and in turn overall, progress. Beyond GDP delves into the inability of GDP to paint a full picture of our economy by not counting many goods- such as at home child care, education and volunteerism, and not counting many bads- such as the costs of pollution and the negative economic impact of income inequality.
GDP also cannot reflect the difference between quality and quantity. Economic activity from hurricane clean up is just the same as increased manufacturing output, even though one is clearly better for society overall. And, it cannot reflect the gains from personal fulfillment unless there is a monetary value. Due to the heavy reliance on GDP as a measure of economic and social well-being, there is no incentive to encourage personal fulfillment because it would likely show a decrease in spending and, therefore, a decrease in GDP.
The inability of GDP to reflect larger social trends is shown through a set of infographics accompanying the report. The infographics show that while there has been a constant increase in growth, there has been little increase in median income, a drop in pension plan participation, and increasing rates of poverty. The infographics also show that while GDP has been increasing, social health is on the decline, incarceration rates are increasing and we are consuming resources at an unsustainable rate.
As priorities start to shift away from material wealth, GDP will become an even poorer metric of economic and societal well being. New metrics and accounting measures need to be introduced to provide a more complete and accurate portrait of our economy and our society.
The shift from quantity to quality is better for the planet, for well-being and for society. It's time our accounting systems reflected that.