The Problem with GDP
Krugman has an article in the NYTimes today about the disconnect between the GDP growth rate and how Americans feel about the economy.
American families don’t care about G.D.P. They care about whether jobs are available, how much those jobs pay and how that pay compares with the cost of living. And recent G.D.P. growth has failed to produce exceptional gains in employment, while wages for most workers haven’t kept up with inflation.
. . .
Employers certainly aren’t having trouble finding workers. When Wal-Mart announced that it was hiring at a new store in Northern California, where the unemployment rate is close to the national average, about 11,000 people showed up to apply for 400 jobs.
Americans (and Canucks) also care about their environment, for the most part. Maybe North Americans should look at more comprehensive measures of GDP such as the Genuine Progress Indicator. It’s not perfect, but it is really interesting.
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