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Alternative Metrics Show We Need More than Growth for Progress

J. Mijin Cha

The 4th OECD World Forum on Statistics, Knowledge and Power begins tomorrow in New Delhi, India and will bring together roughly 1,000 participants to talk about alternative metrics beyond GDP. The theme of this year’s conference is, “Measuring Well-Being for Development and Policy Making.” The conference will build on the Better Life Initiative, which looks at 11 metrics beyond GDP to measure well-being across countries. The 11 measures cover a diverse set of metrics, including civic engagement, work-life balance, and safety.

We’ve talked in depth about why alternative metrics are important because they provide a more accurate picture about what kind of progress we are making economically, socially, and environmentally. For example, the U.S. has the fourth highest GDP per capita among all OECD countries, which taken alone would seem to indicate we are one of the better performing countries. However, in education, we are actually below average. U.S. students overall score just below the OECD average in reading literacy, math and science. And when it comes to equality of education, the difference in scores between students in the top 20th income percentile and those in the bottom 20th, is 13 points higher than the OECD average, suggesting that we are not progressing in educating our population, even though we have a high GDP per capita.

The need to have more metrics beyond GDP is gaining momentum. Last week, the state of Maryland hosted the first ever summit of state practitioners to talk about how to advance the Genuine Progress Indicator. Organized by Demos and funded by the Town Creek Foundation, the summit brought together participants from Maryland, Oregon, Utah and Vermont, along with national thinkers, to discuss how to advance a more comprehensive metric at the state level. The Genuine Progress Indicator looks at 26 different indicators beyond gross state product for a more accurate view of progress not just growth.

Looking at alternative metrics in Maryland shows how decreasing underemployment and income inequality boosts overall well-being, nuances that are not captured in the gross state product. Last year, Maryland’s GPI grew 2 percent due to a decrease of $200 million in underemployment and a $4 billion reduction in the state’s income inequality. Counting the savings from decreasing underemployment is particularly forward thinking while underemployment causes a host of negative impacts, it is often ignored because policymakers focus mainly on unemployment.

Metrics like the GPI help us make smarter, more targeted policy decisions. GDP may measure growth, but it has long been unable to measure progress. As we see with more comprehensive metrics like the GPI, it takes much more than growth to make progress.