On 12th August 2020, the Office for National Statistics announced that the UK’s GDP had fallen 20.4% in the second quarter, putting the UK into its worst recession since records began. Following the UK’s prolonged lockdown, this drop in Gross Domestic Product is more severe than losses seen in the US and the Eurozone.
The impact of COVID-19 has been difficult for everyone, especially those who have become ill or lost loved ones. For many, it’s been a prompt to take stock of what really matters, placing a greater emphasis on individual and community wellbeing.
At WEAll, we’re passionate about advancing the wellbeing economy concept: an economic system purpose-built to deliver social justice on a healthy planet. Within a wellbeing economy, humanity determines economics, not the other way around.
So when we see figures like this—that GDP has fallen by 20.4%—it’s important to clarify what this data means and what it does (and doesn’t) tell us about the state of society.
No one should argue that these are not difficult times, with furloughs and redundancies widespread and social isolation still a reality for many people. In terms of the actual numbers we use to measure our country’s economic health, however, we propose that GDP is a skewed figure that reveals little about the wellbeing of the millions of people who keep the economy running, each and every day.
GDP doesn’t see the outpouring of community support, for example, and it neglects our country’s renewed focus on nature. It measures cash transactions, which include drug dealing, but ignores volunteer work and caring duties.
Find new oil? GDP goes up. Start a community garden? No impact.
Have to deal with flooding caused by global warming or medical treatment to cope with heatwaves? GDP will see that as a good thing. Spend more time with your family and friends? GDP isn’t interested.
Take your car into a congested city? GDP loves that. Jump on your bike and use one of the new cycle lanes? GDP doesn’t care.
The last few months have seen big hits to restaurants, education, the arts, public transport, and even healthcare—all sectors which are very important to the wellbeing economy, not to mention to their workers. However, even here the GDP statistics do not tell the full story. Childcare and education did not disappear. For better or for worse, it just happened at home. We are seeing our friends and family less than we would like to, but we still see them. It’s just that many of us now go for a walk in the park rather than for a meal in a restaurant. These activities still have value, but they are simply not captured by GDP.
We can all agree on the need to rebuild, but it’s imperative that we build back better instead of simply returning to the status quo, which works only for the few and often neglects the very key workers on whom we all rely. We are just not convinced that GDP is the most useful measure of how Scotland builds back better, renews, or recovers. See our recent response to comments made by Benny Higgins, the chairman of Nicola Sturgeon’s advisory group on economic recovery, to learn more about the myth of “green growth”.
Katherine Trebeck, Advocacy and Influencing Lead at WEAll and co-founder of WEAll Scotland, has long campaigned for alternative measures of progress to GDP. One such alternative to GDP she points to is to focus on things like the number of girls riding bikes to school. It might sound radical at first, says Katherine, but just think of the contextual factors that need to be in place in order for higher numbers of girls on bikes (and in education) to improve.
There are tough times behind us, and no doubt there will be tough times ahead. So moving forward, let’s build a stronger economy that works for all of us, not just those who benefit from outdated measures of success like GDP.