The economy is developing, but many problems still need to be solved.Robert F. Kennedy once said that a country’s GDP measures “everything except that which makes life worthwhile.” With Britain voting to leave the European Union, and GDP already predicted to slow as a result, it is now a timely moment to assess what he was referring to.
The question of GDP and its usefulness has annoyed policymakers for over half a century. Many argue that it is a flawed concept. It measures things that do not matter and misses things that do. By most recent measures, the UK’s GDP has been the envy of the Western world, with record low unemployment and high growth figures. If everything was going so well, then why did over 17 million people vote for Brexit, despite the warnings about what it could do to their country’s economic prospects?
A recent annual study of countries and their ability to convert growth into well-being sheds some light on that question. Across the 163 countries measured, the UK is one of the poorest performers in ensuring that economic growth is translated into meaningful improvements for its citizens. Rather than just focusing on GDP, over 40 different sets of criteria from health, education and civil society engagement have been measured to get a more rounded assessment of how countries are performing.
While all of these countries face their own challenges , there are a number of consistent themes . Yes , there has been a budding economic recovery since the 2008 global crash , but in key indicators in areas such as health and education , major economies have continued to decline . Yet this isn’t the case with all countries . Some relatively poor European countries have seen huge improvements across measures including civil society , income equality and the environment.
This is a lesson that rich countries can learn : When GDP is no longer regarded as the sole measure of a country’s success, the world looks very different .
So, what Kennedy was referring to was that while GDP has been the most common method for measuring the economic activity of nations , as a measure , it is no longer enough . It does not include important factors such as environmental quality or education outcomes – all things that contribute to a person’s sense of well-being.
The sharp hit to growth predicted around the world and in the UK could lead to a decline in the everyday services we depend on for our well-being and for growth . But policymakers who refocus efforts on improving well-being rather than simply worrying about GDP figures could avoid the forecasted doom and may even see progress.
Many people talked of the 288,000 new jobs the Labor Department reported for June, along with the drop in the unemployment take to 6 J percent. at good news. And they were right. For now it appears the economy is creating jobs at a decent pace. We still have a long way to go to get back to full employment, but at least we are now finally moving forward at a faster pace.
However there is another important part of the jobs picture that was largely overlooked. There was a big jump in the number of people who report voluntarily working part-time. This figure is now 830,000（4,4 percent）above its year ago level.
Before explaining the connection to the Obamacare, it is worth making an important distinction. Many people who work part-time jobs actually want full-time jobs. They take part-time work because this is all they can get. An increase in involuntary part-time work is evidence of weakness in the labor market and it means that many people will be having a very hard time making ends meet.
There was an increase in involuntary part-time in June, but the general direction has been down. Involuntary part-time employment is still far higher than before the recession, but it is down by 640,000(7.9 percent)from its year ago level.
We know the difference between voluntary and involuntary part-time employment because people tell us. The survey used by the Labor Department asks people if they worked less than 35 hours in the reference week. If the answer is “yes.”they are classified as working part-time. The survey then asks whether they worked less than 35 hours in that week because they wanted to work less than full time or because they had no choice. They are only classified as voluntary part-time workers if they tell the survey taker they chose to work less than 35 hours a week.
The issue of voluntary part-time relates to Obamacare because one of the main purposes was to allow people to get insurance outside of employment. For many people, especially those with serious health conditions or family members with serious health conditions, before Obamacare the only way to get insurance was through a job that provided health insurance.
However, Obamacare has allowed more than 12 million people to either get insurance through Medicaid or the exchanges. These are people who may previously have felt the need to get a full-time job that provided insurance in order to cover themselves and their families. With Obamacare there is no longer a link between employment and insurance.
During the past generation, the American middle-class family that once could count on hard work and fair play to keep itself financially secure had been transformed by economic risk and new realties. Now a pink slip, a bad diagnosis, or a disappearing spouse can reduce a family from solidly middle class to newly poor in a few months.
In just one generation, millions of mothers have gone to work, transforming basic family economics. Scholars, policymakers, and critics of all stripes have debated the social implications of these changes, but few have looked at the side effect: family risk has risen as well. Today’s families have budgeted to the limits of theirs new two-paycheck status. As a result, they have lost the parachuted they once had in times of financial setback – a back-up earner (usually Mom) who could go into the workforce if the primary earner got laid off or fell sick. This “added-worker effect” could support the safety net offered by unemployment insurance or disability insurance to help families weather bad times. But today, a disruption to family fortunes can no longer be made up with extra income from an otherwise-stay-at-home partner.
During the same period, families have been asked to absorb much more risk in their retirement income. Steelworkers, airline employees, and now those in the auto industry are joining millions of families who must worry about interest rates, stock market fluctuation, and the harsh reality that they may outlive their retirement money. For much of the past year, President Bush campaigned to move Social Security to a saving-account model, with retirees trading much or all of their guaranteed payments for payments depending on investment returns. For younger families the picture is not any better. Both the absolute cost of healthcare and the share of it borne by families have risen – and newly fashionable health-saving plans are spreading from legislative halls to Wal-Mart workers, with much higher deductibles and a large new dose of investment risk for families’ future healthcare. Even demographics are working against the middle class family, as the odds of having a weak elderly parent – and all the attendant need for physical and financial assistance – have jumped eight fold in just one generation.
From the middle-class family perspective, much of this, understandably, looks far less like an opportunity to exercise more financial responsibility, and a good deal more like a frightening acceleration of the wholesale shift of financial risk onto their already overburdened shoulders. The financial fallout has begun, and the political fallout may not be far behind.