In the Programme for Government, published last year, the Government committed that its "overriding focus is to improve the wellbeing of the Irish people and society". Part of that commitment was the development of a set of wellbeing indicators to provide a holistic view of how our society is faring, and a "balanced scorecard for each area of public policy, focused on outcomes and the impact that those policies have on individuals and communities. Initially, this will be focused on housing, education, and health.". But what should Wellbeing look like?
Beyond Economic Growth
There is a popular maxim in social statistics: ‘if it doesn’t count, it’s not counted’. Social statistics are almost universally the product of states, and their definition and production are necessarily based on politics and power. Social statistics generally, however, are not created by social scientists, (at least not directly), but are instead almost always the creation of a state or official body, which is, more likely than not, interested in measuring what most directly affects themselves, or the people they represent. Governments measure what they want to influence or control. In a democracy, what most concerns the public, or at least vocal parts of the public, leads to the creation of economic and social statistics. The role of power in social statistics, as well as in social analysis, must be recognised.
Social Justice Ireland has previously argued that the tendency to minimise the number of factors used to analyse social outcomes is strong and almost instinctive. Excluding other interests is a good way of keeping one’s interests front and center. This is easier when few groups have any political rights. It should be noted, however, there are also clear benefits for having a summary statistic that conveys general information of the state of the economy or society. These are for getting our attention, pointing out that we need to dig deeper into this area to establish what the problem is, and what needs to be done to address it. Wellbeing, like health, is multifaceted and complex. It is necessary that all important issues have the benefit of evidence-based analysis and policy making to inform citizens, managers and politicians.
In the post WWII era, economic growth as measured by increases in GDP came to represent pro-business economic policy. GDP growth also provided the means for national defense spending, increased standards of living, and allowed for reducing poverty without redistribution (the ultimate “win-win”). Just about every claim on government action could be addressed with economic growth. Further, a growing economy prevented zero-sum conflicts as excluded groups demanded inclusion. At least in theory, it is where the interests of governments, businesses, and households all coincide. Even allowing for non-material values, it is economic growth that provides the wherewithal to pursue non-material goals. Additionally, a cleaner environment would require a growing economy (either to provide the money needed to clean up the environment, or because the environment was considered a luxury good that only people with high incomes would be concerned about).
It is now widely accepted that GDP is not designed to be a measure of wellbeing. The United Nations manual for Systems of National Accounts (SNA 2008) provides five limitations of GDP as a measure of wellbeing:
- GDP measures spending and not all spending adds to wellbeing;
- Much economic activity takes place outside of market relations, and thus is not included in GDP (e.g. household production);
- Many non-economic events (like natural disasters) have a negative impact on welfare but often can have a positive effect on GDP;
- Many consumption or production expenditures have a positive effect on the welfare of the individuals undertaking them, but a negative effect on non-market participants (economists call these ‘externalities’); and
- An individual’s wellbeing is greatly affected by many non-economic factors, such as their health, family relations, friendships; factors that GDP does not measure.
Lastly, the use of GDP as the primary metric for measuring social wellbeing reduces all human interactions to market transactions. GDP measures prices, and if everything is reduced to a price (cost /benefit decision), then GDP is the obvious measure for all human activity.
Due to the many limitations of GDP as a measure of social wellbeing, many alternative measures have developed in recent years. Many are trying to measure the wellbeing directly, which began as an effort to measure the quality of life in a country.
What's being done nationally?
In October 2020, alongside the Budget 2021 documentation, Government began the process of developing indicators with the publication of 'Wellbeing and the Measurement of Broader Living Standards in Ireland' with the aim of moving from GDP-based indicators of progress to a Wellbeing approach.
The reponsibility for delivering on this commitment rests with the Department of the Taoiseach, which has set up an InterDepartmental Working Group, but will impact across all Government Departments as well as Local Government and State agencies. In July this year, the Department of the Taoiseach published the First Report on Well-being Framework for Ireland on the work of the InterDepartmental Working Group, specifically the Conceptual Framework. The Conceptual Framework consists of eleven dimensions:
- Subjective Well-being
- Mental and Physical Health
- Income and Wealth
- Knowledge and Skills
- Housing and Local Area
- Environment, Climate and Biodiversity
- Safety and Security
- Work and Job Quality
- Time Use
- Community, Social Connections and Cultural Participation
- Civic Engagement and Cultural Expression
and is largely based on the eleven Wellbeing Indicators developed by the OECD. This report was also informed by a Working Group convened by NESC, the National Economic and Social Council, on which Social Justice Ireland represents the Social Inclusion Pillar. The NESC Working Group was covened to consider how best to consult with all stakeholders in this process and how best to use these consultations to inform policy that is focused on Wellbeing. NESC Ireland's Well-being Framework Consultation Report was published alongside the First Report.
Wellbeing Information Hub
The CSO (Central Statistics Office) has launched the initial version of the Wellbeing Information Hub, a portal on the CSO website providing key data under each of the eleven Wellbeing indicators identified. The data available on the Hub attempt to provide information to policymakers, researchers and others to the question of how we are doing as a country, as communities and as individuals?
The latest data available, using the eleven indicators is as follows:
- Subjective Wellbeing: Persons aged 16+ that rated their overall life satisfaction as high in 2018, 44 per cent in Ireland (compared to an EU average of 25 per cent).
- Mental and Physical Health: Healthy Life Years of a person born in 2019, 69.6 per cent in Ireland (compared to an EU average of 64.6 per cent).
- Income and Wealth: Households which had great difficulty making ends meet, 7 per cent in 2019 compared to 16 per cent in 2004.
- Knowledge and Skills: Students with level 3 proficiency in reading in 2018, 30 per cent (compared to an OECD average of 25 per cent).
- Housing and Local Area: Number of new dwelling completions in Ireland, 20,535 new dwellings in 2020 compared to 4,907 new dwellings in 2012.
- Environment, Climate and Biodiversity: Greenhouse Gas Emissions '000 Tonnes CO2 Equivalent, 61,000 in 2018 compared to 53,000 in 2013.
- Safety and Security: Adult population worried they could a be a victim of crime causing physical injury in 2019, 11 per cent of Males and 19 per cent of Females.
- Work and Job Quality: Employment Rate of persons aged 15 - 64 in Q2 2021, 73 per cent Males and 64 per cent Females.
- Time Use: Working long hours, 8.2 per cent in 2021 compared to 8.4 per cent in 2016.
Community, Social Connections and Cultural Participation: Persons with more than two people they are close enough to that they could count on, if they had a serious problem in 2019, 81 per cent aged 15-24 and 75 per cent aged 75+.
Civic Engagement and Cultural Expression: Satisfied with the way democracy works in their own country in 2021, 76 per cent in Ireland (compared to an EU average of 55 per cent).
The datasets under each indicator will evolve over time as more data becomes available to the CSO.
What should happen next?
Relying on a single index or statistic to represent something that is as complex as social progress or wellbeing is problematic. While there is clearly some benefit to have a single number to focus on, especially if it is one that is acceptable to everyone, we believe the costs of a narrow focus outweigh that benefit. At best, it can tell you the ‘what’ but not the ‘why’, and the ‘what’ is very limited, and will often be used beyond where it is meaningful. Social Justice Ireland has long-advocated for a move from GDP as a measure of progress to a more holistic approach that places a value on human capital, an expanded definition of work that is not synonymous with paid employment, and an emphasis on an inclusive society. This must be based on evidence and underpin policy that works for all of society - providing decent services and infrastructure; ensuring a vibrant economy; collecting fair taxation; ensuring good governance and sustainability for all.
In 2018, we presented then Minister for Communications, Climate Action and Environment with a comprehensive list of data points required to build a Sustainable Progress Index. We look forward to working with Government on this project to ensure that everything that counts to the people of Ireland is properly counted.
The Government has also created an Wellbeing Portal which includes a short survey on the Wellbeing Indicators and acts as a repository for information and reports on this project.