U.S. leads the world in GDP, but not in other measures
Steve Chiotakis: When it comes to the sheer size of the economy — as measured by the Gross Domestic Product — the United States leads the world. But GDP may not be the best way to answer the question of how we’re really doing. Today the United Nations releases a new measure that shows the U.S. is not number one.
Marketplace’s David Brancaccio tracks a lot of different ways to gauge economic health
with his Economy 4.0 series, and he’s with us now. Good morning David.
David Brancaccio: Morning Steve.
Chiotakis: So the UN’s Human Development Index?
Brancaccio: Yeah, it starts with the family’s income, then looks at a health indicator: life expectancy at birth; then factors in years of education. If you look at it this way, the United States does okay, number four in the world, behind the usual suspects. Care to guess, Steve, who the usual suspects are?
Chiotakis: One of the Scandinavian countries, I would imagine right? They’re always tops on those lists.
Brancaccio: Yeah, you got that right. Norway is number one — we’re being Australia, the Netherlands, and Norway. But here’s the thing: the Human Development Index report also has a section factoring the gap between the rich and poor within the countries. Here’s Bill Arm of the UN’s Development Program.
Bill Arm: It’s quite striking that the United States, of the advanced industrial countries, is the most radically affected by an inequality adjustment — that is to say it drops 19 spots.
Brancaccio: Nineteen spots, bring us down to number 23 in the world.
Chiotakis: But isn’t growing income inequality — the way things are going right now — the way of the world?
Brancaccio: Well, there are countries making progress here. The figures show that emerging market countries — Brazil, Chile, Argentina — are actually reducing their income gaps.
Chiotakis: Emerging markets — but what about the poorest countries though?
Brancaccio: The Human Development Index data has some news there. If current trends continue — health, education, income — by mid-century, by 2050, will be doing as well then as the top 25 are doing now.
Chiotakis: “If trends continue,” what does that mean?
Brancaccio: Well you just saw right through me, Steve. The UN says current trends are very unlikely to continue because of climate change: deforestation, rising sea levels would hit the poorest countries especially hard.
But the report says that countries that do have high standards of living, do rank high in this Human Development Index, can still do something about the carbon dioxide linked to climate change. They point to Denmark that’s making a lot of strides in that area.
Chiotakis: Marketplaces’s David Brancaccio, with our Economy 4.0. David, thank you.
Brancaccio: You’re welcome.
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