A Better Way to Measure Progress - Part 2
We noted how we have confused economic growth with genuine prosperity and well being. Despite all that, some may say, growth is still necessary to create jobs. Let's look at the evidence.
First, we now know, through hard experience in the ground fishery, that depleting our natural resources in the name of economic growth does not produce more jobs in the long run but massive unemployment. The National Round Table on Environment and Economy recently warned that we face a similar prospect in our Maritime forest industry. Have we learned?
Secondly, growth is increasingly capital-driven rather than labour-driven. We have seen continuous and rapid economic growth since World War II and a steady increase in Canadian unemployment rates. In Nova Scotia we have gone from 4% unemployment in the late 1960s to an average of 8% in the 1970s, and 12% in the 1980s and 1990s. "Normal" and even "good" employment rates today were completely unacceptable 30 years ago. Youth unemployment and underemployment remain particularly high.
Thirdly, insecure, temporary and marginal employment without benefits accounts for most employment growth in the 1990s. The desperate search for new markets and more trade pits our workers against child labourers in Indonesia, prison workers in China, teenage girls working 12-15 hours a day in the Mexican maquiladoras, in a race to the bottom - a no-win situation for them and for us. The low inflation we prize so highly is contingent on cheap labour. In fact, the fatalistic view that there is no alternative to globalization is a direct consequence of our unquestioning acceptance of the growth illusion.
And yet, we still link "more jobs" to "more growth," forgetting that the right to work and earn a decent livelihood is a fundamental human right, enshrined in Articles 23 and 25 of the Universal Declaration of Human Rights. "If" we forgive loans to Michelin, "if" we bring in casinos, "if" we cut a new deal with China, "if" we entice another corporation with a tax break or subsidy, it is said, "then" perhaps we can create (or more likely save) jobs.
Holland: Less Work and More Jobs
Instead of making jobs contingent on growth, we might learn from some European countries that have created more jobs by reducing and redistributing the existing workload. The Netherlands, for example, has a 3.6% unemployment rate and also the lowest annual work hours of any industrialized country. In that country, part-time work is legally protected, with equal hourly wages and pro-rated benefits. France has introduced a 35-hour work week. Danes have 5 to 12 weeks of annual vacation.
There are intelligent job creation strategies that can enhance well being and prosperity and that are not dependent on more growth as measured by GDP. Sweden has generous parental and educational leave provisions that create job openings for new workers. Phased retirement options gradually reduce the work hours of older workers, who can pass on their skills and expertise to younger workers taking their place. Once creative experiment gave parents the option of taking the summer months off to be with their children, with guaranteed re-entry to the work force in September, thus providing much needed summer jobs for university students and cost savings to employers.
Reducing and redistributing work hours can also improve the quality of life by creating more free time. Time use surveys show that the Danes average eleven hours more free time per week than Canadians. But free time has no value in our market statistics, and its loss appears nowhere in our current measures of progress.
The more hours we work for pay, the more the economy grows. Canadian women have doubled their participation in the work force in the last 35 years, fueling economic growth. But they still do two-thirds of the housework, and their new-found labour market freedom has produced an absolute loss of free time.
In the last 20 years we have seen an increasing polarization of hours in Canada, leading to growing earnings inequality. More underemployed people are unable to find the hours they need to support themselves, and more overworked people are putting in longer hours than ever as firms downsize. A recent Japanese study showed that the underemployed and overworked suffer similar stress levels and have the same rate of heart attacks.
Shifting the View
None of this means that there should be no growth of any kind. Some types of economic growth clearly enhance well being, increase equity and protect the environment. There is vital work to be done in our society - raising children, caring for those in need, restoring our forests, providing adequate food and shelter for all, enhancing our knowledge and understanding, and strengthening our communities.
Ironically, while we are so busy counting everything on which we spend money, we assign no value to vital activities that really do contribute to our well being. Voluntary community service, essential household work, and parental child-rearing are not counted or valued in our measure of progress, because they are not paid. If they were, we would know that they add $325 billion a year of valuable services to the Canadian economy.
But we will never shift our attention to the work that is needed if we fail to value our natural resources, our voluntary service and our child-rearing, and if we place no value on equity, free time, and the health of our communities. And we will never escape from the materialist illusion that has trapped us for so long, or even know whether we are really better off, if we continue to count costs like crime and pollution as benefits, and if we measure our well being according to the GDP and economic growth statistics.
Thirty years ago, Robert Kennedy remarked that the GDP "measures everything...except that which makes life worthwhile" and noted that we have for too long "surrendered community excellence and community values in the mere accumulation of material things."
What is urgently, indeed desperately, needed, are measures of well being, prosperity and progress that explicitly value the non-material assets that are the true basis of our wealth, including the strength of our communities, our free time, the quality of our environment, the health of our natural resources, and our concern for others. The means to do so exist.
Recently, 400 leading economists, including Nobel laureates, jointly stated:
Since the GDP measures only the quantity of market activity without accounting for the social and ecological costs involved, it is both inadequate and misleading as a measure of true prosperity. Policy-makers, economists, the media, and international agencies should cease using the GDP as a measure of progress and publicly acknowledge its shortcomings. New indicators of progress are urgently needed to guide our society...The GPI is an important step in this direction.
A Genuine Progress Index
Here in Nova Scotia we are making a modest contribution to this effort with the construction of a Genuine Progress Index (GPI) that integrates 20 social, economic and environmental indicators into a measure of sustainable development that can send more accurate signals to policy makers and public alike. Statistics Canada has designated the project as a pilot for the country, and we hope to have it ready for use before the end of the year 2000.
Nova Scotia seems particularly fertile ground for this experiment. First, we know from hard experience that failing to value our natural capital has serious economic consequences. Secondly, the conventional economic system has never served this region of the country particularly well, and there is therefore a greater openness to alternatives. Most importantly, we have been just far enough removed from the materialist mainstream to preserve our community strength, spiritual values and quality of life, and a strong tradition of generous community service, perhaps more effectively than many other parts of North America. This province is well placed to take a lead in forging these new measures of progress.
We are equipped with the natural intelligence and compassion to abandon the growth illusion and its bankrupt measures of well being. We can choose to enter the new millennium sanely, valuing the true strengths that we have here in abundance. We can fashion more self-reliant and self-sufficient forms of community economic development that provide a real alternative to the globalization that puts our destiny in the hands of forces beyond our control.
The time has never been better to contemplate the legacy we are leaving our children and the society we want to inhabit in the new millennium. The cusp of the millennium is a rare moment in history when a long-term practical vision can actually overpower our habitual short-term preoccupations. It is a moment that invites us to lay the foundations of a genuinely decent society for the sake of our children and all the world's inhabitants.
For more on the Nova Scotia effort see: http://www.gpiatlantic.org/