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Why we shouldn’t judge a country by its GDP

Eupraxsophy:

There is more to human progress and well-being than the sum value of a country’s goods and services. Instead of aiming for constant growth of Gross Domestic Product (GDP), governments, civil society groups, and economists should look to other, more meaningful metrics, as outlined by the Social Progress Imperative.

Originally posted on ideas.ted.com:

Gross Domestic Product has become the yardstick by which we measure a country’s success. But, says Michael Green, GDP isn’t the best way to measure a good society. His alternative? The Social Progress Index, which measures things like basic human needs and opportunity.

Analysts, reporters and big thinkers love to talk about Gross Domestic Product. Put simply, GDP, which tallies the value of all the goods and services produced by a country each year, has become the yardstick by which we measure a country’s success. But there’s a big, elephant-like problem with that: GDP only accounts for a country’s economic performance, not the happiness or well-being of its citizens. With GDP, if your richest 100 people get richer, your GDP rises … but most of your citizens are just as badly off as they were before.

That’s one of the reasons the team that I lead at the Social Progress…

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The Unexpected Cause Of Addiction

Addiction has long been the subject of intense personal criticism, attributed to personal irresponsibility, negligence, or immorality. But centuries of this approach have done little to mitigate it; if anything, social or legal punishments make the problem worse, breeding psychological distress and resentment that further reinforce, if not escalate, the addiction.

A cynic might chalk the persistence of this social ill to the vagaries of human nature, e.g. bad, stupid, or irresponsible have always existed and always will. No amount of medical, legal, or social support will do anything about it. Locking up addicts or ostracizing them is the most we can do to remove the problem.

But there is mounting research, going back over three decades, that shows substance abuse to have more complex and external origins that go well beyond personal fiat. As HuffPo reported:

One of the ways this theory was first established is through rat experiments – ones that were injected into the American psyche in the 1980s, in a famous advert by the Partnership for a Drug-Free America. You may remember it. The experiment is simple. Put a rat in a cage, alone, with two water bottles. One is just water. The other is water laced with heroin or cocaine. Almost every time you run this experiment, the rat will become obsessed with the drugged water, and keep coming back for more and more, until it kills itself.

The advert explains: “Only one drug is so addictive, nine out of ten laboratory rats will use it. And use it. And use it. Until dead. It’s called cocaine. And it can do the same thing to you”.

But in the 1970s, a professor of Psychology in Vancouver called Bruce Alexander noticed something odd about this experiment. The rat is put in the cage all alone. It has nothing to do but take the drugs. What would happen, he wondered, if we tried this differently? So Professor Alexander built Rat Park. It is a lush cage where the rats would have colored balls and the best rat-food and tunnels to scamper down and plenty of friends: everything a rat about town could want. What, Alexander wanted to know, will happen then?

In Rat Park, all the rats obviously tried both water bottles, because they didn’t know what was in them. But what happened next was startling.

The rats with good lives didn’t like the drugged water. They mostly shunned it, consuming less than a quarter of the drugs the isolated rats used. None of them died. While all the rats who were alone and unhappy became heavy users, none of the rats who had a happy environment did.

Before anyone points out the obvious fact that rats are not humans, and thus not a reliable basis on which to base our addiction solutions on, it turns out that the Vietnam War, of all things, bolstered the study’s conclusion as well:

Time magazine reported using heroin was “as common as chewing gum” among U.S. soldiers, and there is solid evidence to back this up: some 20 percent of U.S. soldiers had become addicted to heroin there, according to a study published in the Archives of General Psychiatry. Many people were understandably terrified; they believed a huge number of addicts were about to head home when the war ended.

But in fact some 95 percent of the addicted soldiers — according to the same study — simply stopped. Very few had rehab. They shifted from a terrifying cage back to a pleasant one, so didn’t want the drug any more.

Professor Alexander argues this discovery is a profound challenge both to the right-wing view that addiction is a moral failing caused by too much hedonistic partying, and the liberal view that addiction is a disease taking place in a chemically hijacked brain. In fact, he argues, addiction is an adaptation. It’s not you. It’s your cage.

In other words, addiction is shaped as much, if not more, by the individual’s social environment than any chemical reaction or moral perspective. This makes sense when one considers that fundamentally social nature of humans, and how our behaviors, actions, and pathologies are influenced by a wide range of external factors, ranging from the physical environment to the support of our fellow humans.

Here’s one example of an experiment that is happening all around you, and may well happen to you one day. If you get run over today and you break your hip, you will probably be given diamorphine, the medical name for heroin. In the hospital around you, there will be plenty of people also given heroin for long periods, for pain relief. The heroin you will get from the doctor will have a much higher purity and potency than the heroin being used by street-addicts, who have to buy from criminals who adulterate it. So if the old theory of addiction is right — it’s the drugs that cause it; they make your body need them — then it’s obvious what should happen. Loads of people should leave the hospital and try to score smack on the streets to meet their habit.

But here’s the strange thing: It virtually never happens. As the Canadian doctor Gabor Mate was the first to explain to me, medical users just stop, despite months of use. The same drug, used for the same length of time, turns street-users into desperate addicts and leaves medical patients unaffected.

If you still believe — as I used to — that addiction is caused by chemical hooks, this makes no sense. But if you believe Bruce Alexander’s theory, the picture falls into place. The street-addict is like the rats in the first cage, isolated, alone, with only one source of solace to turn to. The medical patient is like the rats in the second cage. She is going home to a life where she is surrounded by the people she loves. The drug is the same, but the environment is different.

This gives us an insight that goes much deeper than the need to understand addicts. Professor Peter Cohen argues that human beings have a deep need to bond and form connections. It’s how we get our satisfaction. If we can’t connect with each other, we will connect with anything we can find — the whirr of a roulette wheel or the prick of a syringe. He says we should stop talking about ‘addiction’ altogether, and instead call it ‘bonding.’ A heroin addict has bonded with heroin because she couldn’t bond as fully with anything else.

So the opposite of addiction is not sobriety. It is human connection.

I recommend reading the rest of the article, but the conclusion is clear: when addressing addiction at both an individual and community level, it is vital to go beyond the biological or psychological factors and take into account the context — the state of the addict’s social life, the sort of bonds or lack thereof in their life, etc. A more holistic view takes into account all the relevant details.

Obviously, more research is needed to explore this issue, but it is definitely interesting and important to take into account every possible variable.

U.S. Leads Developed World in Child Poverty

Over the past six years, America’s wealth expanded by over $30 billion — a growth rate of 60 percent — despite the weak recovery. During the same span of time, another metric grew by that percentage: the number of homeless and food insecure children.

As Raw Story reports, despite its vast and ever-growing wealth, the world’s richest country by a considerable margin lags behind most other developed nations in measurements of child poverty.

America is a ‘Leader’ in Child Poverty

The U.S. has one of the highest relative child poverty rates in the developed world. As UNICEF reports, “[Children’s] material well-being is highest in the Netherlands and in the four Nordic countries and lowest in Latvia, Lithuania, Romania and the United States.”

Over half of public school students are poor enough to qualify for lunch subsidies, and almost half of black children under the age of six are living in poverty.

$5 a Day for Food, But Congress Thought it was Too Much.

Nearly half of all food stamp recipients are children, and they averaged about $5 a day for their meals before the 2014 farm bill cut $8.6 billion (over the next ten years) from the food stamp program.

In 2007 about 12 of every 100 kids were on food stamps. Today it’s 20 of every 100.

For Every 2 Homeless Children in 2006, There Are Now 3

On a typical frigid night in January, 138,000 children, according to the U.S. Department of Housing, were without a place to call home.

That’s about the same number of households that have each increased their wealth by $10 million per year since the recession.

The US: Near the Bottom in Education, and Sinking

The U.S. ranks near the bottom of the developed world in the percentage of 4-year-olds in early childhood education. Early education should be a primary goal for the future, as numerous studies have shown that pre-school helps all children to achieve more and earn more through adulthood, with the most disadvantaged benefiting the most. But we’re going in the opposite direction. Head Start was recently hit with the worst cutbacks in its history.

Children’s Rights? Not in the U.S.

It’s hard to comprehend the thinking of people who cut funding for homeless and hungry children. It may be delusion about trickle-down, it may be indifference to poverty, it may be resentment toward people unable to “make it on their own”.

The indifference and resentment and disdain for society reach around the globe. Only two nations still refuse to ratify the UN Convention on the Rights of the Child: South Sudan and the United States.

Aside from the obvious immorality of allowing so many millions of children to suffer during their most formative years, this abysmal performance in child well-being will leave a lasting legacy of social ills, poor children are increasingly more likely to remain poor for the rest of their lives (especially given the declining social mobility for which the U.S. was once famous).

Five Myths About Fast Food Jobs

As one of the fastest-growing industries in the country, food service — along with other low-paying sectors like retail and hospitality — is becoming the new normal of employment.

But as the following list from the Washington Post shows, this is a troubling trend, as many Americans do not realize what little the industry has to offer to its burgeoning and increasingly desperate labor force.

1. Fast-food workers are mostly teenagers working for pocket money.

Fast food was indeed an adolescent gig in the 1950s and 1960s, when the paper hat symbolized the classic short-term, entry-level job. But today, despite arguments that these low-wage jobs are largely filled by “suburban teenagers,” as the Heritage Foundation put it, labor data show that about 70 percent of the fast-food workforce is at least 20 years old. The typical burger-flipper is an independent adult of about 29, with a high school diploma. Nearly a third have some college experience, and many are single parents raising families on $9 an hour. In contrast to McDonald’s rather optimistic model budget — which assumes that an employee lives in a two-income household and doesn’t need child care or gas or groceries — a large portion of fast-food workers are forced to borrow from friends to cover basic household expenses, or sometimes fall into homelessness.

According to researchers at the University of California at Berkeley, about half of the families of front-line fast-food workers depend on public programs, compared with 25 percent of the American workforce. About 87 percent of fast-food workers lack employer health benefits, compared with 40 percent of the general workforce. And roughly one-fifth of workers’ families are below the poverty line. That adds up to some $7 billion in welfare payouts each year — essentially enabling fast-food mega-chains to subsidize ultra-low wages with public benefits.

2. Employees can work their way up and eventually even own a franchise.

Burger King’s career Web site proclaims: “You’ll never be short of opportunities to show what you’ve got. And if we like what we see, there’s no limit to how far you could go here.” The New York Restaurant Association boasts that restaurant work “creates an opportunity for people to live the American dream.” Under its franchise “success stories,” McDonald’s features a man who advanced from being a crew member to owning a franchise in just a few years.

The dream of upward mobility, however, eludes most workers. The National Employment Law Project (NELP) points out that about 90 percent of the fast-food workforce is made up of “front-line workers” such as line cooks and cashiers. About 9 percent are lower-level supervisors, who earn about $13 an hour. And just 2.2 percent of fast-food jobs are “managerial, professional, and technical occupations,” compared with 31 percent of jobs in the U.S. economy.

As for the notion of working your way up to ownership, NELP reports that 1 percent of the fast-food workforce owns a franchise — a purchase that could require $750,000 to several million dollars in financial assets. And there’s no indication that many of these franchisees actually did “rise through the ranks” to become owners, which requires an amount of capital that might top the lifetime salary of an average kitchen worker.

3. Fast-food companies can’t control franchise wages or working conditions.

McDonald’s plan to raise wages at least $1 over the local minimum wagewas announced this month to much fanfare. But the raise applies only to employees of the 1,500 stores McDonald’s owns directly. The company contends that as a chain franchisor, it merely licenses its brand to individual franchise operators; is not legally liable as an employer; and thus “does not direct or co-determine the hiring, termination, wages, hours” and other working conditions for all who toil under the golden arches.

But critics say these fast-food chains actually exert powerful oversight over their franchisees by closely tracking their spending and operations. Domino’s, one franchisee claims, critiqued how his employees answered the phone; Burger King franchisees sued the chain in 2009, claiming that it was forcing them to sell menu items for a loss at $1. Companies often pressure owner-operators to squeeze down labor costs: According to one employee quoted in the Guardian, “McDonald’s corporate representatives turn up at the restaurant where he works five or six times a year, counting the number of cars using the drive-through service, timing sales, making sure staff are preparing food according to McDonald’s specifications.” More so than most fast-food chains, McDonald’s wields financial control over its franchisees and owns the rental real estate of the restaurants.

Former McDonald’s executive Richard Adams has said: “McDonald’s franchisees are pretty compliant. They don’t really organize, they don’t really protest. And if you do, they tell you you’re not a good member of the McFamily. I don’t want to make this seem too Orwellian, but the average franchisee has about six restaurants, and the franchise agreement is for 20 years. You’re probably going to have a renewal coming up. If you’re not a compliant member of the team, you’re probably not going to get that renewal.”

The issue of whether McDonald’s can be labeled a “joint employer” is being litigated in numerous claims of unfair labor practices that workers have filed with the National Labor Relations Board. The NLRB’s general counsel recently deemed McDonald’s a joint employer, and if it is ultimately penalized as such, workers could see a dramatic expansion in the company’s legal and regulatory obligations.

4. Flipping burgers is an easy job.

Some people chafe at the idea of “unskilled” fast-food workers meriting a wage more suited to a “high-skilled” job. Not only does this ignore the fact that this work requires skills — from managing inventory to training and supervising other employees — it also disregards the day-to-day challenges workers navigate on the job. According to a slew of complaints filed with the Occupational Safety and Health Administration, workers often suffer injuries such as hot-oil burns and are sometimes denied proper medical care. (Some are told to dress wounds with condiments.) Violence is also common at fast-food restaurants; according to a recent survey, roughly one in eight workers reported being assaulted at work in the past year.

Workers have also complained of racial discrimination, sexual harassment and retaliatory punishment by management. More than 40 of the NLRB claims filed against McDonald’s in the past few years alleged illegal firings or penalties because of workers’ engagement in labor activism. Add to all of this the challenge of just getting paid: Subway was found guilty of 17,000separate wage and hour violations since 2000, and in 2013, Taco Bell was hit with a $2.5 million settlement in a class-action lawsuit over unpaid overtime.

5. Paying workers $15 an hour would make burgers prohibitively costly and hurt the industry.

Some analysts, particularly on the right, have laid out doomsday scenarios of massive economic disruption caused by a sudden doubling of wages in the fast-food industry. The Heritage Foundation argues that raising wages to $15 an hour could lead to a price spike, shrinking job opportunities, and huge drops in sales and profits . In reality, any such wage increase would probably be incremental and could be absorbed in large part by lowering the fees collected by parent companies from franchisees. Fast-food workers already enjoy such higher pay in other countries with strong labor regulation and union representation. A Big Mac in New Zealand costs less than one in the United States — $4.49 vs. $4.79, according to the Economist’s Big Mac index — and it’ll likely be served by a full-time union worker earning about $12 per hour.

Higher wages might also bring business benefits, in the form of lower turnover and good press. The Michigan-based fast-casual restaurant Moo Cluck Moo offers a $15 wage alongside premium grass-fed burgers, turning its reputation as a socially responsible employer into a selling point. The market for super-cheap fast food is apparently declining. Consumers just might be hungry for a more conscientious business model.

Why Do The Poor Buy Luxury Goods?

From Tressie McMillan Cottom at TPM

Why do poor people make stupid, illogical decisions to buy status symbols? For the same reason all but only the most wealthy buy status symbols, I suppose. We want to belong. And, not just for the psychic rewards, but belonging to one group at the right time can mean the difference between unemployment and employment, a good job as opposed to a bad job, housing or a shelter, and so on. Someone mentioned on twitter that poor people can be presentable with affordable options from Kmart. But the issue is not about being presentable. Presentable is the bare minimum of social civility. It means being clean, not smelling, wearing shirts and shoes for service and the like. Presentable as a sufficient condition for gainful, dignified work or successful social interactions is a privilege. It’s the aging white hippie who can cut the ponytail of his youthful rebellion and walk into senior management while aging black panthers can never completely outrun the effects of stigmatization against which they were courting a revolution. Presentable is relative and, like life, it ain’t fair.

In contrast, “acceptable” is about gaining access to a limited set of rewards granted upon group membership. I cannot know exactly how often my presentation of acceptable has helped me but I have enough feedback to know it is not inconsequential. One manager at the apartment complex where I worked while in college told me, repeatedly, that she knew I was “Okay” because my little Nissan was clean. That I had worn a Jones of New York suit to the interview really sealed the deal. She could call the suit by name because she asked me about the label in the interview. Another hiring manager at my first professional job looked me up and down in the waiting room, cataloging my outfit, and later told me that she had decided I was too classy to be on the call center floor. I was hired as a trainer instead. The difference meant no shift work, greater prestige, better pay and a baseline salary for all my future employment.

….

At the heart of these incredulous statements about the poor decisions poor people make is a belief that we would never be like them. We would know better. We would know to save our money, eschew status symbols, cut coupons, practice puritanical sacrifice to amass a million dollars. There is a regular news story of a lunch lady who, unbeknownst to all who knew her, died rich and leaves it all to a cat or a charity or some such. Books about the modest lives of the rich like to tell us how they drive Buicks instead of BMWs. What we forget, if we ever know, is that what we know now about status and wealth creation and sacrifice are predicated on who we are, i.e. not poor. If you change the conditions of your not-poor status, you change everything you know as a result of being a not-poor. You have no idea what you would do if you were poor until you are poor. And not intermittently poor or formerly not-poor, but born poor, expected to be poor and treated by bureaucracies, gatekeepers and well-meaning respectability authorities as inherently poor. Then, and only then, will you understand the relative value of a ridiculous status symbol to someone who intuits that they cannot afford to not have it.

America’s Disenfranchised Territorial Inhabitants

More people live in Puerto Rico alone than in about half of America’s states, yet the island’s residents and those of other territories — who combined number over 4 million people — are nonetheless denied various rights accorded to them as recognized U.S. citizens; in the case of American Samoa, they are not even granted automatic citizenship, despite the name.

This is despite the fact that, in the case of Guam for example, one quarter of the land is occupied by U.S. military bases, and one out of eight people are veterans. Puerto Ricans, American Samoans, and other groups have similarly done their part for the country, whether it is military service, paying the taxes they still owe, or simply being active civic participants (despite the lack of real voting rights on the federal, straw polls still reveal large turnouts).

John Oliver offers an illuminating takedown of this unjust arrangement, including its racist legal and historical basis.

To add to the many injustices highlighted by the video is another unmentioned consequence: the high rate of emigration from these territories to the mainland, which is due in no small part to the limited opportunities and political rights available in the territories.

While I knew my fellow American citizens and nationals in the territories were legally and politically marginalized, I had not realized the extent of it nor the archaic and perturbing basis for it.

U.S. Must Not Forget The Dispossession of Natives

There are many reasons to favour a more inclusive history of the United States that places the dispossession of native peoples at its centre. Such a history erases the artificial distinctions that earlier generations drew to discount the presence of native peoples, does not privilege the rise of the nation-state, and better reflects the makeup of today’s US population, which will soon be majority non-white. Its themes also resonate with 21st century concerns, including state-sponsored social engineering, large-scale population displacement, environmental degradation, and global capitalism.

But perhaps the best reason is that it is more faithful to the past. I teach in the state of Georgia, where the legislature mandates that graduates of its public universities fulfill a US history requirement, a law born of the belief that an informed populace is essential to democracy. Good history makes for good citizens. A history that glosses over the conquest of the continent is partial, in both senses of the word. It misleads people about the past and misinforms their debates about the present. In charting a course for the future, Americans would do well to put the dispossession of native peoples back on the map.

— Claudio Saunt, The Invasion of America

Chart: Gender Equality Around the World

The World Economic Forum’s annual Global Gender Gap Report determines disparities between men and women in areas like political empowerment, economic opportunity, health, and education. Scores are tallied between zero and one, with one signifying perfect equality (an impossible ranking thus far for even the most progressive countries, though thankfully no country ever ranks at zero). Here is a chart of some of the results courtesy of The Economist.

Out of 142 countries examined in 2014’s index, Iceland topped the list at 0.86, followed by the rest of the Scandinavian countries — Denmark, Finland, Norway, and Sweden — taking the next four highest slots. This is perhaps not too surprising, given that these nations typically perform very well in just about every metric of human development, from poverty to social stability.

But plenty of developing countries have high gender equality as well; Nicaragua, the Philippines, and Rwanda each made it to the top ten despite being among the world’s poorest countries. This challenges the notion that economic and political development are the main factors bettering the lives of women (although such solutions certainly help of course).

Like most social and culture values, a lot of multidimensional influences are at work in determining the treatment and opportunity accorded towards women. Thankfully, many countries seem to be improving in this and other metrics of human development, but we still have a long way to go. What are your thoughts?

 

Giving to Charity Intelligently

There are so many causes worth supporting, and no shortage of charitable organizations to choose from to address them. But since money tends to be short and there are only so many groups to give to, it is important to know where you get the most bang for your buck.

If anyone needs help determining which charities they should support, check out CharityNavigator.com, which was founded to help improve the efficiency of charitable giving. To that end, it evaluates philanthropic organizations based on a range of criteria, such as financial efficiency, accountability, and transparency. It also provides a detailed profile on every nonprofit, including how much goes to overhead versus the cause, how much CEOs are paid, where donations come from, and the like.

Moreover, you can compare charities within particular fields (education, animal welfare, etc.), view a top ten list of the best (and worst) charities, see which organizations needs the most help (and which do not), and learn about the most recent trends and developments in the world of humanitarianism (for example, which organizations are involved in fighting Ebola in West Africa). You can even find vital tips on how to donate most effectively

Fortunately, my research suggests that Charity Navigator — which is also a nonprofit that could use some donations — is an independent and trustworthy source; crucially, it does not except donations or advertisement from any group it evaluates, and all of its own financials are public record and available on its website. Of course, you are free to leave any feedback regarding this or other charity watchers, so that we can all do a better job of doing good in the world.

Graph: The U.S. Leads the Way in Low-Wage Work and Pay

As has sadly been the case all too often these days, one of the latest reports from the Economic Policy Institute, an American think-tank, is grim: low-wage workers (the 10th percentile of wage earners) have seen their real pay decline by five percent over the 1979-2013 period, despite concurrent productivity gains of 64.9 percent.

Consequently, American low-wage workers fare the worst in the developed world: according to the OECD, as of 2012, they earned just 46.7 percent of what a median worker worker does, far below the OECD average of 59.9 percent; to catch up to that average, U.S. low wage workers would need a 28 percent raise in their wages.

The graph below highlights this issue rather starkly:

Note that over a quarter of America’s labor force — 25.3 percent to be exact — is low wage, which is defined as earning less than two-thirds of the median wage. On this metric, too, the United States ranks the highest among the 26 countries surveyed, and far higher than the OECD average of 16.3 percent.

Thus, the U.S. has the largest number of low-paid workers in the developed world, and they in turn are the lowest paid in the developed world. And while several countries, such as the U.K., Ireland, and Canada, come close, most of them at the very least have more developed social safety nets to offset the shortfall among low-wage workers (universal healthcare alone is a major mitigating factor, given that medical bills account for many cases of bankruptcies among the American poor).

Setting aside the considerable amount of misery that comes with low paying and often menial labor, the broader impact on the long-term prosperity of the nation cannot be understated: with one out of four workers (and their dependents) having so little income, consumer demand — the lifeblood of the economy — stagnates. Fewer people are able to afford an education or vocational training, leading to a lot of untapped and desperately needed potential.

All this despite the nation’s economic elites — its executives, shareholders, and investors — broadly doing better than ever. Is it really so untenable for companies to spare some of their record, post-recession profits to improve the plight of their beleaguered workers — i.e. the consumers and patrons they all so badly need?

 

In any case, this is a point I have made too many times before, so instead of retreading it once more, I will leave you with this illuminating report by  Elise Gould (also from EPI) on Why America’s Workers Need Faster Wage Growth—And What We Can Do About It. As always, feel free to share your thoughts and feedback.