UK GDP and headline employment increases – decently paid, secure jobs decline
Is economic growth the best indicator of overall success?
The release of the UK’s latest Gross Domestic Product (GDP) figures dominated headlines last week.
While 0.5% growth in the last three months of 2015 means there have been twelve consecutive quarters of economic expansion, the annual rate of growth is the lowest for three years, and there were concerns about lack of balance across the different sectors of the economy and fears about the impact of global economic trends.
What was not generally questioned was the sense of importance attached to the GDP figure, which gets a huge amount of attention for a statistical release, and is often seen as the basis for a judgement about UK performance overall. Prime Minister David Cameron described the growing economy as ‘good news’ which means ‘more jobs and security for people’.
But NEF’s research suggests that the relationship between growth and other key outcomes is not so straightforward. For example, our analysis revealed a fall in the number of decently paid and secure jobs despite an increase in the headline employment rate.
This type of finding is fuelling enthusiasm for better measures of overall national success. It is an approach that is rapidly entering the mainstream, with the OECD’s Better Life Index bringing together measures of 11 key aspects of life, the Welsh Government currently in the process of adopting a set of national well-being indicators for Wales and the regular publication over the last few years of the UK Office for National Statistics’ own Measuring National Wellbeing indicators.
To make this type of indicator effective, research shows they must resonate with a broad audience. NEF’s assessment is that this crucially includes the need for a very small set of indicators at headline level, which can tell an overall story about a country, while being succinct and memorable enough to engage the public.
This is the reasoning that lies behind our proposal for five headline indicators of success for the UK, which focus on the things that British people have said matter most: Good Jobs, Wellbeing, Environment, Fairness and Health.
As the UK will shortly be required to start reporting its progress against the globally agreed Sustainable Development Goals, this represents a key opportunity for rethinking the indicators we use to tell the headline story of our national success.
By Juliet Michaelson – New Economics. Economics as if people and the planet mattered