From: "Nathan Newman" <nathan.newman at yale.edu> Date: Thu, 9 Dec 1999 09:22:00 -0500
PRESS RELEASE
For Immediate Release
November 23, 1999
Contacts: Douglas Gould & Co. (914) 833-7093; Jamie Shor (301) 320-3192
WHILE GDP RISES, GENUINE ECONOMIC PROGRESS ELUDES MOST AMERICANS
Why Bigger Isn't Better: The Genuine Progress Indicator 1999 Update: Malaise at Dawn of New Millennium Explained by Continued Decline of the GPI
Washington, DC - Just one day before the Commerce Department is expected to release the latest set of increasing Gross Domestic Product (GDP) figures, Redefining Progress is releasing "Why Bigger Isn't Better: The Genuine Progress Indicator 1999 Update," a report contradicting the government's rosy economic status updates. Redefining Progress, a San Francisco-based public policy organization, says its research finds that despite the growing GDP, the economy everyday people experience is continuing a downward trend as we confront the new millenium.
The Genuine Progress Indicator, or GPI, is an alternative to the GDP that better reflects the way most people interact with economic forces by incorporating environmental, social, and health factors long ignored by traditional government measures.
Researchers report that in 1998 the GPI dropped to $1.7 trillion or $6,549 per capita (in 1992 dollars). The drop in the GPI, 2.3% since 1990, is primarily due to a growing income gap and declining quality of life in this country. The GPI peaked in 1980 at $1.9 trillion ($8,722 per capita) and has been declining ever since.
"Progress is more than simply money changing hands," said Joanne Kliejunas, executive director of Redefining Progress, addressing reporters, policy experts, and government officials at the Rayburn House Office Building briefing. "'Why Bigger Isn't Better' debunks the modern-day myth that a booming economy delivers an improved quality of life."
Over the past few years, our political leaders have pointed to the rising GDP as proof of the nation's vitality. But the GDP, the government's chief measure of economic activity, fails the public as an indicator of progress. The GDP was designed as a planning tool to guide the massive production effort for World War II, not as a measure of economic progress. The GDP is simply a gross tally of money spent -- goods and services purchased by households or governments, regardless of whether they enhance our well-being or not.
Endorsed by Nobel laureates and some of the nation's top economists as an essential step toward more realistic accounts, the GPI explains why many Americans feel the "boom" has passed them by. The GPI is the best measure of household economic well-being currently available, and shows a continuing slide for more than two decades. One critical distinction is that the GPI does not count negative or defensive expenditures as economic positives.
For example:
o More than $100 billion was spent on addressing water, air, and noise
pollution and considered growth by the GDP.
o Foreign lending accounted for $238 billion of the GDP -- but this is
really debt for future repayment.
o The costs of crime, from replacing stolen goods to purchasing home
security systems to increased prison building, paradoxically adds $28
billion to the GDP.
o The loss of old-growth forests, farmland, and wetlands degrade the
environment and the American landscape, but these losses are calculated
as growth to the GDP.
Martha Farnsworth Riche, director of the U.S. Bureau of the Census from 1994 to 1998, said, "Citizens need to insist that the government collect data that captures their experiences within this growing economy. Unless people demand more appropriate measures of progress, we will continue to have existing data such as the GDP misrepresented as proof of progress."
Mathis Wackernagel, director of the Indicators Program at Redefining Progress, explained, "While the GDP rose from $20,310 per capita in 1980 to $27,939 per capita in 1998, the GPI fell from $8,722 to $6,649 during the same period. The economy that most people experience has fallen and they feel the sting."
"For much of this decade there has been a paradox at the core of American life," said Kliejunas. "Politicians and the media say the economy has been booming. And yet many people are struggling harder than ever only to feel less well-off and see their quality of life slipping away." She outlined the three main reasons:
o First, the economic growth is not distributed equally.
o Second, this growth is purchased by increasing financial debts to the
future, through overseas borrowing and failing to invest enough in future
productivity.
o Third, the costs of growth include degradation of natural assets and
depletion of natural resources, an ecological "borrow" from the future
that we can never hope to repay.
Even though the average wage earner is working 42 hours more per year since 1990, the real gains from the growth of the GDP have increasingly benefited the highest income earners in America. From 1975 to 1998, the proportion of total income received by the poorest fifth of the population dropped from 4.4% to 3.6%, while the proportion received by the richest fifth increased from 43.2% to 49.2%. In other words, the rich are getting richer while the poor get poorer.
There is a disconnect between what the government is tracking, the politicians are calculating, and Americans are experiencing. The GPI helps Americans see why and where.
For additional information on "Why Bigger Isn't Better: The Genuine Progress Indicator 1999 Update," or to request a copy of the report, please visit the Redefining Progress website at http://www.rprogress.org .
For interviews and quotes, please contact Douglas Gould & Co. at (914) 833-7093.
-30-
Redefining Progress is a five-year-old, nonprofit public policy organization that works to ensure a more sustainable and socially equitable world. Redefining Progress seeks to shift the prevailing definition of progress, from one based exclusively on a growing economy, to one that insures the health of all people, their communities, and the environment.
Redefining Progress One Kearny Street, 4th Floor San Francisco, CA 94108 Phone: 415.781.1191 Fax: 415.781.1198 Email: info at rprogress.org
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