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Economy 4.0

How do we measure standards of living?

Stan Alcorn Oct 14, 2010
Economy 4.0

How do we measure standards of living?

Stan Alcorn Oct 14, 2010


Kai Ryssdal: Consider this for just a second: We didn’t really start getting better gas mileage from our cars until we started measuring miles per gallon and then slapping a sticker with the results onto every new car on the lot. So, by extension, what we measure directly affects what we get. But what should we be measuring if we want an economy that works better for more people? Economists, as you know, love to measure things. We’ve got GDP and productivity and inflation numbers coming out our ears. But maybe we’re doing it wrong.

That’s one of the ideas behind our series, Economy 4.0. Our special correspondent David Brancaccio is exploring how we might get the global economy to a better place. And one way might be to go beyond the classics like GDP or productivity and look at some new numbers. Here’s David.

David Brancaccio: You’re thinking a story about New Numbers is going to start with the sonorous tones of an economist. Well, no. Let’s start with Wide Mouth Grin.

Band Wide Mouth Grin singing

Wide Mouth Grin is this band, based in Boulder, Colo. Indie, right?

Laura Casciardi: Indie, the first thing I think of is independent. I think of underground, but still pleasing to the mass public.

The band’s lead singer Laura Casciardi. Think of alternative economic indicators as “indie” numbers. Not yet mainstream, maybe less corporate and more, I dunno, real, as in reflecting the more down-to-earth wants and needs of people. Indie as opposed to…

Casciardi: You know, kinda the Justin Bieber, Lady Gaga, on the radio all the time.

Convention dictates a few bars of Justin Bieber right here, but I refuse. Instead, let’s share a line from Nobel Prize winner Joseph Stiglitz who’s on a crusade for alternative economic indicators. “What you measure affects what you do,” he says. “If you don’t measure the right thing, you don’t do the right thing.”

Alternative measures come in all shapes and sizes and that’s why I’m here in Boulder County, Colo.

Morgan Rogers: I do like numbers a lot. I am the numbers geek of the office.

Morgan Rogers is, for a person who watches statistics, pretty indie herself. She telemark skis and likes “Band of Horses,” which still has some indie cred, right? Her suspicion of things mainstream also extends to her way of assessing where she lives. Rogers believes typical measures — jobs, household wealth — can be misleading.

Rogers: We have maintained low unemployment rates, our median family income is among the highest, in fact, we were named the 12th wealthiest metropolitan statistical area based on median household income several years ago.

In most places, the conclusion might be: Streets are paved with gold, end of story. But her employer, a charity called the Community Foundation of Boulder County, asked her to gather a crop of what are called “Community Indicators.”

Rogers: It’s things like a vibrant economic base, but it also includes things like access to housing, access to education, access to health care, vibrant arts and cultural life, civically-engaged residents.

Community Indicators track what’s working — like environmentalists love the 67 percent of land preserved as open space here. And they track what’s not working. For instance, the public schools are doing great with middle class and wealthy students and failing the poorest. And then there are demographics. Rogers gets snarky on this subject in her glossy indicator “Trends” report.

Roger: “Who are we? If you think Boulder County is home only to a bunch of middle-aged wealthy white guys and gals, you’re mostly right. Still you’re not paying close enough attention.”

Diversity where many least expect it. One in four here is a person of color. Eleven percent live below the poverty line. That’s because we’re talking the whole county, not just Boulder city.

Sound of car radio

The short drive between Boulder and the city of Longmont is said to be the longest dozen miles in Colorado.

Artist: Longmont is 12 miles away and you go from California to the Midwest in a matter of 15 minutes.

This artist from Longmont says the real divide is socio-economic. In Boulder, I got my high-end caffeine at Bookends Cafe, where the big concern was the effect of high real estate prices. In Longmont, a cup of joe was a quarter the price here at Janie’s Diner, where concerns are more down to earth including crime and the economy.

Teresita Zavalas’ son was a good student in high school.

Teresita Zavalas: Of course, he can’t go to college, because there’s no money to go because there’s no job.

Not exactly the portrait of a community that can rest on the laurels of its high average income. And it hasn’t. Stung by the data about the academic performance of students from low-income, mainly Latino families, the community responded with a new focus on preschoolers.

Caregiver talking to child in Spanish

A caregiver tries out reading strategies for youngsters. The training courtesy of PASO — for Providers Advancing School Outcomes — a non-profit that turns babysitters into informal preschool educators. But funding was scarce. Armed with the school stats, the Community Foundation persuaded residents to dig deep to support a big grant for PASO, which in turn unlocked an impressive chunk of change from the state.

The inequality measured in Boulder schools is just one of the many indicators an international commission wants governments to monitor. It’s urging authorities to get creative when it comes to the social and economic indicators they measure and track. It’s a vivid sign that alternative indicators are moving from indie to the mainstream world of government policy.

In Boulder County, Colo., I’m David Brancaccio for Marketplace.

Brancaccio: David and Economy 4.0 are online for us too — blogging, among other things, about alternative indicators like the Happy Planet Index or the Google Price Index we told you about earlier. Photos and stories from the road as well.

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