US needs new way to measure and advance economic fairness, group says
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[November 09, 2023]
By Timothy Aeppel
(Reuters) - The U.S. must change how it measures the well-being of its
people - including gauging how much of a voice they feel they have in
political outcomes - as part of a larger effort to reverse rising
inequality across the economy.
That's the assessment of a new report released on Thursday by the
American Academy of Arts and Sciences. It includes recommendations
ranging from redesigning social programs with an aim of providing
greater stability to those facing economic hardships to extending to
Black World War Two veterans and their descendants the benefits they
were denied under the G.I. Bill decades ago.
There is growing concern about a contradiction in the U.S. economy: jobs
are plentiful and economic growth is strong, especially compared with
other advanced economies, but surveys show many Americans are sour about
the outlook.
"We're close to full employment by traditional measures," said Matthew
Slaughter, a member of the commission that wrote the report and the dean
of Dartmouth College's Tuck School of Business. "But a lot of American
families in surveys say they don't think it's going that well."
Recent data underscores the problem. A report on consumer finances from
the Federal Reserve last month found that American families on average
saw large gains in income and wealth from 2019 to 2022, but the income
gains were largest among the highest-earning families, and fastest among
white families. New estimates from the U.S. Census Bureau also show the
share of income going to the top 5% grew from 2019 to 2022, extending a
trend dating from the 1980s.
Dissatisfaction with the status quo shows up in how Americans vote, said
Nicholas Lemann, a co-chair of the commission and a professor at the
Columbia Journalism School, noting there's now a competition between the
two major political parties to be the "party of the working class." This
reflects a growing focus on inequality as wealthier Americans and
certain regions of the country have appeared to snare the bulk of the
benefits of strong economic growth in recent decades, he said.
"There's a view that the good stuff in America gets concentrated on the
coasts," Lemann added.
MEASURING WELL-BEING
This is the first time the American Academy of Arts and Sciences, which
was founded in 1780 to advance research and civil dialogue, has tackled
a broad analysis of the U.S. economy.
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A volunteer arranges the food to be given as donations at a food
bank in Columbus, Ohio, U.S. December 6, 2021.REUTERS/Gaelen
Morse/File Photo
Based in part on 31 "listening sessions" conducted with groups of
working Americans, the commission developed a list of 15
recommendations on how to make the economy more equitable. Some are
vague, such as "deconcentrating economic power," but others target
specific steps, such as expanding access to low-cost banking and
broadband connectivity in underserved communities.
A key part of the report is a new tool developed to measure the
well-being of Americans, which combines 11 different measures. Among
the categories are indicators of health, such as life expectancy and
the percentage of people with health insurance, and economic
security, including the percentage of households that spend less
than 30% of total income on housing.
Researchers around the world have long sought to find better ways to
gauge the well-being of people that look beyond measures such as
economic growth or unemployment. One example is the Social
Vulnerability Index, which uses Census data for every census tract
to assess 14 social factors.
The American Academy of Arts and Sciences' measure shows some broad
trends that are well-known, such as pockets of poverty in the U.S.
South and affluent clusters along the coasts.
One unique part of the measure is an attempt to quantify the
"political voice" of Americans. One component of this compares what
people who responded to a government survey on what they would like
to see happen on high-profile policy issues with how their
representatives in Congress voted on those items when they arose
during legislation. A high level of support for an issue and a "yes"
vote by their representative yielded a high score.
"Even if the economy right now has low unemployment and relatively
high growth, we know that people feel a huge amount of anxiety - and
a lot of that is tied up with the sense that our society is
changing, and our democracy isn't healthy," said Jacob Hacker, a
political science professor at Yale University who spearheaded the
development of the political voice score.
(Reporting by Timothy Aeppel; Editing by Paul Simao)
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