FOR IMMEDIATE RELEASE
DATE: December 5, 2000
CONTACT: Douglas Gould & Co., Betsy De Soye, Jennifer McDonnell at (914) 833-7093
Eroding Economic Security:
Genuine Progress Indicator Uncovers Dangers Hidden Behind Last Year's Economic Boom
Americans Face Expanding Debt, Shrinking Leisure Time, Degrading Environment
Oakland, CA -- Even as the Commerce Department announces the slowing pace of the U.S. economy, today's release of an alternative economic measure - the Genuine Progress Indicator (GPI) - demonstrates that during the robust economic boom of 1999 there were ample signs that its days were numbered. Research by Redefining Progress, an Oakland-based public policy organization, reveals that last year's economic boom came at substantial social, economic and ecological costs. The group held an audio news conference today to release "Blazing Sun Overhead and Clouds on the Horizon: The Genuine Progress Report for 1999" which explains how the boom that caused the economy to rise was accomplished through ecological degradation, overextended workers, as well as increased consumption and consumer debt.
On the surface, the current GPI report, based on government data released for 1999, reflects a lurch upward, similar to the 1999 GDP. The GPI is a comprehensive measure of well being in the United States that incorporates environmental and social factors long ignored by traditional government indicators. After years of decline, the 1999 GPI rose to $2.30 trillion, up $144 billion, or 6.7 percent, from 1998. But a closer examination of the data reveals a more ominous picture. Only three factors accounted for the steep GPI rise. Unusually steep growth in personal spending, a sizable increase in capital investment per worker, and a shift in the relative strength of the U.S. economy compared to other economies were largely responsible for the jump.
"The 1999 GPI rise reflects last year's climate in which booming economic performance discouraged people from seeing the storm clouds of increased social and ecological stress," said Joanne Kliejunas, Executive Director of Redefining Progress. "Those storm clouds are now beginning to dump rain on our economic parade"
"Americans are already paying the price for their wealth," said Harvard University's Juliet Schor, author of The Overworked American and The Overspent American who commented on today's GPI release. "Through escalating personal debt and overwork, we are tapping ourselves out."
The 1999 Genuine Progress Indicator report substantiates the stresses on the economy and on how people's lives are affected by it:
The report shows that consumer debt was also at an all-time high in 1999, and Americans were saving less than ever before. Millions of Americans' consumption exceeded their income, made possible by easy credit and debt. With income gaps widening, these debt and consumption indicators suggest that more and more people are becoming especially vulnerable to economic calamity should they have a health crisis or face rising prices for essentials like heating oil and health insurance.
The GPI confirms that Americans have also experienced a decline in their quality of life. People spend more time commuting to their jobs and working longer hours so they have less time to relax with their families. Leisure time was sacrificed to secure higher incomes in 1999, in part because an average hour of work earned less purchasing power than it did in 1973.
Women bore the burden of extended work hours. The hours of paid work for women have grown dramatically since 1969, while the hours for unpaid work (such as childcare and housework) fell only slightly. For men, unpaid and paid work hours have increased only slightly. The GPI report noted that this work expansion suggested a decline in women's quality of life, and increased pressure on family life.
While the economy has downshifted to its slowest pace in four years, the costs of economic expansion continue. Americans are still depleting natural resources and spending natural capital faster than it is regenerating. The long-term ecological effects of draining wetlands, converting farmlands to shopping malls and residential neighborhoods, and eroding soil continued in 1999. At the same time, water pollution has stabilized, and air pollution is down significantly.
The GPI report also notes that the economic boom has been powered by cheap oil. Approximately 85 percent of energy production and consumption depend on fossil fuels, especially oil. Since low oil prices have created this dependency, the report predicts that the higher oil prices that seem inevitable will further slow this economic boom.