Why Good Economic News Doesn’t Always Feel Good
Politicians love to big-up their country's GDP growth - at least if it's increasing - productivity up = good news.
But GDP growth doesn't tend to matter to ordinary people - who are more concerned with mortgage payments, rent, the cost of groceries, and whether a summer holiday is even possible this year.
David Smith points this out in The Times—Britain often does better than the gloomy forecasts suggest. The IMF keeps predicting slowdowns, and yet, things end up just slightly better. Some reckon the UK economy might grow by about 1.5% this year.
On paper, that’s good. But hardly anyone feels good about it!
GDP...
GDP may well measure the value of some of the stuff that gets produced (probably not the Onions the Portuguese are growing on the allotment, mind), but GDP doesn’t measure how people actually feel.
Picture a company raking in record profits but freezing everyone’s pay. GDP rises, but for workers, life just got harder. Or imagine the national economy growing, but families can’t pay their bills. People notice what hits their bank accounts, not some abstract national graph.
Why Governments Struggle to Sell a “Recovered” Economy
Even if the numbers look up, most people still don’t buy it. Years of flat wages, expensive houses, public services under strain, and general unease have left most people pretty skeptical. Once people decide the system’s broken, an uptick in stats doesn’t change much.
A 0.5% uptick in GDP that many boats does not float!
Experts, numbers, models, abstract measurements just feel like they've got nothing to do with people's daily struggles.
Growth Alone Isn’t Enough
Economic growth usually means more jobs, more money for the government to spend, and better public services. But numbers on their own aren’t enough.
Unless wages go up, wait times shrink, roads improve, and homes get more affordable, people won’t say things are getting better. If those changes don’t show up, GDP stats are just numbers in a report.
So, the data might say Britain is back on track. The real question is: does anyone outside Westminster feel the difference?