Fairfax-Lateral Economics Index of Australia’s Wellbeing as a marker of social progress
Economists have turned their attention to finding better ways to measure our national welfare than gross domestic product, which was never intended to be a marker of social progress.
An example is the Fairfax-Lateral Economics Index of Australia’s Wellbeing, which adjusts GDP to take account of changes in know-how, health, income distribution, job satisfaction and the environment as reported by the SMH.
Since its launch in 2011, the index has been very good at identifying things important to our wellbeing that are largely overlooked by traditional economic indicators – and often by political leaders.
It has uncovered some good news, especially the massive boost to wellbeing from the growing number of adults with a university degree or technical training. The proportion of Australians aged 20 to 64 with a Certificate III qualification or higher has jumped from 47 per cent to 60 per cent since 2005. According to the index, that know-how boom has been the biggest contributor to our collective wellbeing during the past decade. Overall, the value of our wellbeing took a dip in 2013-14 but has been growing steadily since.
But the index has also exposed four big drags on our wellbeing; mental health, obesity, long term unemployment and income inequality.
About one in five adults experiences mental illness in any year so it has a dramatic effect on collective wellbeing.
Conventional economic figures pick up some of the costs of obesity, such as work absenteeism due to obesity-related illnesses. But obese people also report a lower sense of wellbeing because of their weight and the Fairfax-Lateral Economics Index puts a dollar figure on that.
Treasurer Scott Morrison couldn’t hide his delight when a better-than-expected annual GDP growth rate of 3.1 per cent was released last week. We’re “outstripping the world’s most advanced economies” and growth was “twice the pace of comparable resource-based economies like Canada”, he said. But there’s an entrenched economic challenge neither Morrison nor his Labor opponents are talking much about: long-term unemployment. The count of people out of work for a year or more has been on the rise since the global financial crisis in 2009. Numbers peaked at a 16-year high in early 2015 and, after a brief dip in the second half of last year, have started to rise again. The index put the wellbeing cost of long- term unemployment near $3 billion in the March quarter alone.
The index also draws attention to the cost of income inequality. Unequal distribution of income is important to a community’s collective wellbeing for a simple reason – an extra dollar means much more to a very poor person than to a millionaire. Research has shown that each additional dollar received by the poorest fifth of households adds at least five times more to national wellbeing than each additional dollar received by the wealthiest fifth of households. To read more click here.
The 2016 Australian Long-Term Unemployment Conference; Finding Solutions will be held on the 1-2 December 2016, at the Mercure in Brisbane. To register for the Conference CLICK HERE.
The conference theme focuses on industry working together with employment agencies to create positive outcomes for Australia’s long-term unemployed.
Authors or organisations interested in presenting at the 2016 Australian Long-Term Unemployment Conference are invited to submit a 300 word abstract. To submit an abstract CLICK HERE.
Combining practical examples, theory, research and best practice this conference elevates the dialogue to include businesses, not-for-profits, Government agencies, human resource professionals, social security services and industrial relations advocates.