GDP is a useful economic indicator, but it can provide misleading signals when used as a measure of human progress; GDP has tripled over the last 35 years, but the earnings of the typical worker have barely budged
(PRWEB) June 19, 2013
Measure of America, a project of the Social Science Research Council, today released its latest update to the American Human Development (HD) Index, revealing vast socioeconomic differences across racial and ethnic groups, U.S. states, and the country’s 25 largest metropolitan areas, as well as uneven progress over the past decade. A nonpartisan initiative that seeks to move beyond an overreliance in the U.S. on GDP as a measure of human progress and well-being, Measure of America uses the American HD Index to measure three areas vital to the well-being of ordinary Americans: health, education, and earnings. The report, The Measure of America 2013–2014, is the third in a series on the American HD Index, first introduced in The Measure of America 2008–2009 and The Measure of America 2010–2011: Mapping Risks and Resilience.
In the era of “big data,” there is an abundance of economic information, including quarterly updates of the country’s gross domestic product and national budget and daily coverage of interest rates and stock market numbers. Yet, the public, policymakers, philanthropists, and nongovernmental organizations rarely hear critical statistics that answer the most relevant questions: How long can a baby born today in Missouri, New Mexico, or Minnesota expect to live? What proportion of adults have completed high school in Houston as compared to Dallas? What wages and salaries are typical of Latinos in the United States, and how do they compare to those of whites or African Americans?
The American HD Index provides the data needed to measure well-being in the three key areas – health, education, and earnings - that shape the opportunities available to everyday people and enable them to live freely chosen lives. The American HD Index scores enable a ranking of the 50 U.S. states, America’s 25 largest metro areas, and major racial and ethnic groups and allows for the tracking of progress over time. And by focusing on outcomes, the American HD Index is helpful in determining if investments and resources are moving the needle on the country’s major social and economic challenges. It answers the essential question: How are ordinary Americans doing?
“GDP is a useful economic indicator, but it can provide misleading signals when used as a measure of human progress; GDP has tripled over the last 35 years, but the earnings of the typical worker have barely budged,” said Kristen Lewis, co-director of Measure of America. “The American Human Development Index measures areas vital to all of us – health, education, and earnings – and moves away from a binary us/them way of looking at advantage and disadvantage, as today’s poverty measure does, toward an approach that allows everyone to see themselves along the same continuum.”
In The Measure of America 2013-2014, those faring the best and topping the American HD Index for racial and ethnic groups are Asian Americans, followed closely by whites. Latinos, African Americans, and Native Americans have lower levels of well-being than Asian Americans and whites at the national level as well as in every state and metropolitan area included in this analysis. Connecticut, Massachusetts, New Jersey, Washington D.C., and Maryland rank among the top five states on the American HD Index, while Alabama, Kentucky, West Virginia, Arkansas, and Mississippi hold the bottom rankings. Overall, people living in the nation’s 25 largest metro areas have higher levels of well-being and access to opportunity than people living in the rest of the country. The best performing metro areas are Washington, D.C., San Francisco, and Boston; Detroit, Houston, and Tampa registered the lowest metro area well-being scores.
“The American Human Development Index reveals vast differences across racial and ethnic groups, states, and major metropolitan areas,” said Sarah Burd-Sharps, co-director of Measure of America. “What we are seeing is that some groups of Americans are surging ahead, enjoying longer lives, and reaching higher levels of educational attainment. However, other groups are being left behind in terms of their health and education, and, across the board, earnings are stagnating for ordinary Americans. Leaving people behind hinders our competitiveness and is costly for society as a whole.”
Among the key findings of The Measure of America 2013–2014:
Change Over Time
- Michigan, the only state with a 2010 HD Index score lower than its 2000 score, saw the greatest decline in human development over the past decade.
- While the Great Recession undoubtedly pulled wages downward, the trend in declining earnings started before the financial collapse. From 2000 to 2005, wages stalled or declined in thirty-nine states after four decades of slow but continuous national progress in earnings.
- Resources like natural gas enabled states such as New Mexico, Montana, and West Virginia to avoid the earnings losses most other states faced between 2000 and 2010. But their HD Index rankings remained low; valuable natural resources do not automatically fuel improvements in people’s well-being.
- Progress in the life expectancy of the five major U.S. racial and ethnic groups over the past decade was greatest among African Americans. They saw a nearly three-year increase in life span, albeit from the lowest starting point. Native Americans were the only racial or ethnic group whose life expectancy did not increase over the decade.
- The five metro areas that greatly increased their Index scores from 2008 to 2010, Baltimore, Washington, D.C., San Antonio, Dallas, and Boston, did so largely on the strength of improvements in health:. San Antonio, although it ranked last in 2008 and second-to-last in 2010, is gaining ground comparatively quickly.
- The only five metro areas whose Index scores declined from 2008 to 2010 were Detroit, Portland, Atlanta, Miami, and Tampa—the same cities that lost the most ground in terms of earnings over that period.
Race and Ethnicity
- The top-scoring racial/ethnic group on the American HD Index is Asian Americans (7.21), followed by whites (5.43), Latinos (4.05), African Americans (3.81), and Native Americans (3.55).
- Asian Americans score highest in each of the three components of the Index: at the national level, they live the longest, have the most education, and earn the most.
- Latinos have the second-longest life span, outliving whites, on average, by nearly four years.
- African Americans have the shortest lives, but their educational outcomes and earnings exceed those of both Latinos and Native Americans.
- The top five states on the American HD Index are Connecticut, Massachusetts, New Jersey, the District of Columbia, and Maryland.
- The bottom five states are Alabama, Kentucky, West Virginia, Arkansas, and Mississippi.
- Residents of Mississippi have life spans and earnings on par with those of the typical American in the late 1980s.
- In no state do African Americans or Latinos have well-being levels above those of whites or Asian Americans.
25 Largest Metropolitan Areas
- The metro areas that perform best on the HD Index are, starting from the top: Washington, D.C., San Francisco, Boston, Minneapolis–St. Paul, and New York. Workers in the top-ranked Washington, D.C. metro area make over $14,000 more than the typical American wage-earner, are more than twice as likely to have a graduate degree as other Americans, and live 2.2 years longer.
- The metro areas with the lowest levels of well-being are Detroit, Houston, Tampa, San Antonio, and, in last place, Riverside–San Bernardino. In Riverside–San Bernardino, one in five adults over age 25 did not graduate high school. Earnings are about $2,000 less per year than the national median.
- Consistent with the state-level analysis, in no major U.S. metropolitan area do either African Americans or Latinos have well-being levels that equal or exceed those of Asian Americans or whites.
This study was made possible by the generous support of the Conrad N. Hilton Foundation.
For an interactive map program and more information on The Measure of America 2013–2014, visit http://www.measureofamerica.org.
About Measure of America and the American Human Development Index
Measure of America provides easy-to-use yet methodologically sound tools for understanding the distribution of well-being and opportunity in America and stimulating fact-based dialogue about issues we all care about: health, education, and living standards.
The hallmark of this work is the American Human Development Index. GDP tells us how the economy is doing. The American Human Development Index tells us how people are doing and empowers communities with a tool to track progress over time. The Index is comprised of health, education, and earnings indicators and allows for well-being rankings of the 50 states, 435 congressional districts, major metropolitan areas, neighborhoods and counties, women and men, and racial and ethnic groups.
About the Authors
Sarah Burd-Sharps and Kristen Lewis are co-directors of Measure of America and authors of the Measure of America series of national, state, and county reports. Previously, Sarah worked with the United Nations for more than two decades, most recently as Deputy Director of the Human Development Report Office of the United Nations Development Program (UNDP). Prior to this, she worked in China and in a number of African countries on gender issues and economic empowerment. Sarah holds an M.I.A. from Columbia University. Kristen also comes from an international development policy background, having worked primarily in the areas of gender equality, governance, environment, and water and sanitation. Kristen is co-author, under the leadership of Jeffrey Sachs’ Millennium Project, of the 2005 book, Health, Dignity and Development: What Will It Take? She worked at the United Nations for some ten years and has served as a consultant for many international development organizations. Kristen also holds an M.I.A. from Columbia University.