It’s high times for the Northwest’s economy, right? Stocks are soaring. Our region’s GDP is up too. But the prevailing gauges provide a crooked accounting of how the economy affects ordinary people.
So to straighten out the books, Sightline’s Cascadia Scorecard 2007 (just released today) shows that the Northwest’s economic security is scarcely better off than it was more than a decade ago. For all the attention that we give to our pocketbooks in our personal lives, policymakers have little information about the financial security of working families.
Consider, for example, median household income, an excellent gauge of middle class well-being.
Since the mid-1980s the Dow has risen nearly tenfold, and real economic output in Cascadia has more than doubled. By comparison, middle-class incomes in the region scarcely budged. (And keep in mind that the Dow has virtually no bearing on most people’s pocketbooks: the wealthiest fifth of Americans own 90 percent of all stock-market assets, while the bottom three-fifths of Americans own a scant 3 percent.)
So what does a more accurate gauge—the Cascadia Scorecard—tell us about economic well-being? It’s a different story:
- Median income isn’t much higher today than it was in 1990. After adjusting for inflation, it’s slightly higher today than it was in 1990, yet it remains several thousand dollars below its 1998 peak. In British Columbia, the picture is grimmer: although median income has improved a bit recently, it’s still roughly 6 percent lower than it was in 1990.
- Many northwesterners still face precarious economic conditions. After years of ups and downs, by 2005 (the most recent year of complete data) the poverty rate remained unchanged from 1990, while the child poverty rate was slightly lower and the unemployment rate slightly higher.
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As it turns out, the very composition of the Scorecard’s economy indicator points out a serious problem: the mostly widely reported economic indicators have little connection to the daily fortunes of ordinary families. As a society we do a poor job of measuring what matters to most of us.
It’s not that we lack for financial measurements. Far from it. Open any newspaper and you’ll find a whole section devoted to reporting the latest developments in hundreds of business trends like consumer confidence, retail sales, and, especially, the stock market. In fact, every major US media outlet—from radio to television to websites –provides frequent updates on the often meaningless vacillations in the Dow. But there’s scant attention to declining household incomes and stubbornly high rates of poverty.
Yet without an accurate gauge of real-life economic security, Cascadia’s leaders are flying blind, with only a rudimentary compass to guide them. So while many innovative reforms could help boost Cascadians’ financial well-being, it will be impossible to know if they’re working until there is a reliable, regularly updated gauge of the financial health of ordinary working families.