According to today’s quarterly announcement on economic growth the UK economy has grown by 0.8%.
Cue the usual debate: Are we pulling out of the financial crisis now? Is the government getting it right, or still holding us back? Are people spending again? Is it because of exports, holiday season, better weather? Can business owners feel more confident?
The usual debate, though, obscures the important questions we should be asking.
A focus on growing national GDP might have some positive effects (although there’s an argument to be had there) but there’s much more that we’d like to see growing in our economy beyond GDP. Are people getting a share of the wealth generated? Do people have any control over the businesses? Do people have decent jobs? Is the economy working for the majority, or just a small group?
So perhaps, alongside the quarterly growth measure, we should have some other kind of alternative growth index: one that tracks how widely the benefits of growth are spread in the UK.
Indicators for this kind of growth could be fairly straightforward, for example:
- Number of direct shareholders of PLCs
- Number of co-operative and mutual members
- Number of micro-enterprises
- Average wages at different bands and levels
- The size of average pay ratios
- Feelings of engagement at work
This is just a starter.
The point is, if you were to combine these, you would get a sense of whether or not the share of ownership and wealth in the UK is growing. And that would be a far more meaningful form of growth to measure in the economy.