Redefining Growth in 2014As we close out 2013, economists, analysts and political pundits are citing evidence of economic recovery. Housing prices are on the rise. Unemployment is at a five year low and the stock market has been setting records.
For many Americans the past few years have been a rough ride and any improvement is welcome. However, we would be fooling ourselves if we believed we were on a path toward a healthy economy or that the recession was solely to blame.
Even before the onset of the Great Recession the U.S. economy had problems.
Our enormous level of income inequality has been developing for over 30 years and has resulted in vast opportunity gaps, with far too many Americans finding it increasingly difficult to get a good education or a good-paying job.
This current generation of young people is the first American generation not expected to be as well off as their parents. In fact, the United States is now the least upwardly mobile of any industrialized country. In other words, it is harder to cross the class line here than in any other developed nation.
Our economic system itself is no longer delivering for the majority of Americans. Simply going back to post-recession rates of growth without paying attention to what and how we’re growing will not remedy the situation. Nor will it reverse the trend of depleting our natural resource base. The current economic model is based on limitless growth. It requires continuously escalating consumption of products and therefore, continuous growth in the amount of resources we extract, process, consume and throw away. The problem is we don’t have limitless natural resources. By adhering to a limitless growth model on a planet of finite natural resources we are attempting to defy the laws of physics.
This is producing some serious negative consequences, filling our lakes and rivers with toxins, decimating ocean fisheries, pushing scores of species toward extinction and catapulting us toward the treacherous territory of unmitigated global climate change.
It should raise questions, and even alarm bells, that the only time the rates of pollution, greenhouse gas emissions and waste dip downward is when the economy is in recession.
Don’t get me wrong, I am pro-growth. But I want growth that makes us better not just bigger. Instead of just growing more soul-killing dead end jobs I want to see us growing good paying jobs and opportunities for people to prosper.
I believe in children growing healthy, educated and strong -- growing into good people and productive citizens. And so, I support access to great educations for all our children not just the economically advantaged.
I believe in our grandparents growing old with dignity and love. This means fewer elders living stressed out about making ends meet or getting adequate care.
I want our rivers and lakes to be growing cleaner and our oceans growing healthier, with marine wildlife and fisheries growing more abundant. I support growing healthy, productive forests and farms, locally grown timber and locally grown food.
I believe in growing our homegrown clean energy resources, powering our homes, businesses and cars and growing jobs without growing greenhouse gas emissions.
I support growing the abilities and talents of our people and a strong sense of community and caring for one another. I dream of growing optimism, hope and belief that we can leave our children a world that is growing more prosperous, healthy and abundant.
In order to increase prosperity, good jobs, healthy forests, rivers and oceans we will need to be very intentional about what we grow and how we grow. The past thirty years proves that simply growing the economy bigger isn’t automatically going to make us better off. As irascible western novelist Edward Abbey put it, “Growth for the sake of growth is the ideology of the cancer cell.” If so, then perhaps growth for the sake of strengthening the whole is the ideology of the muscle cell and our task is to create a more muscular economy, one that’s stronger not just bigger.
One of the most important components of a muscular economy is growing opportunities for people to make their livings doing work that society needs to have done. About a year ago I was visiting with a young man whose family had been in the crisis of poverty for several generations. He was unemployed and having no success finding work. In his frustration, he asked a very powerful question. He said, “How can there be unemployment when there is so much work that needs to be done?”
One of the central challenges of our age is redesigning the economy so that people can make their livings solving the problems before us. We need to create the markets and innovative financing mechanisms that will enable people to make decent money taking care of our more vulnerable citizens, restoring our forests, rivers and wetlands, and sequestering carbon.
Two examples of this type of creative, problem-solving job creation can be found in the Cool Schools program and the health care transformation effort taking place in Oregon.
In the Cool Schools initiative the State of Oregon issued bonds based on the projected energy savings that would be generated if public schools underwent energy efficiency retrofits. The money generated through the bonds was used to help schools pay for energy audits and retrofits. A $175,000 investment in state dollars has leveraged $21 million worth of economic activity and created jobs that cannot be outsourced.
A superintendent of the small Dallas School District admits to being skeptical that the energy retrofits would actually save money but she was desperate to replace the 50 – 80 year old boilers that broke down so frequently that classrooms often had to be closed during cold winter months.
She now says she has gone from skeptic to fan because the Cool Schools program is saving approximately $150,000 per year in electricity and natural gas costs. As a small district that has been hammered by budget cuts this means they were able to lay off one less teacher. They now have one more teacher teaching kids in classrooms are now warm and well-ventilated.
The Dallas School District used local contractors to do the retrofit work. One small plumbing company had just had to lay off three members of his crew when he got the call about the retrofit project. Cool Schools enabled him to bring those people back off the unemployment line and since then his company has grown 30%.
In this case quantifying the savings from energy conservation and innovative bonding created opportunities for local tradespeople to make their livings saving schools money and creating better classrooms for children to learn in.
In the case of Oregon’s health care transformation a whole new workforce sector is being created. What make’s Oregon’s health care reform different is that the point is not just to get more people covered under the existing expensive and ineffective system but to actually redesign the way health care is delivered to improve health outcomes and dramatically reduce costs. A key emphasis is providing health support to people in their homes and communities rather than at the hospital so that they stay healthier and avoid emergency room visits and other more expensive and invasive treatments.
To make this community care possible a whole new group of workers are being trained including Community Health Workers (CHWs), Peer Wellness Specialists and Personal Health Navigators. Although early in the process, Community Health Worker programs have been calculated to save $2.28 to $4.80 for every dollar spent on CHWs. In Central Oregon, the community employed a CHW to address unmet behavioral health issues in a group of patients that most frequently visited the emergency room. This effort reduced ER visits in this group by 49% and cut costs per patient by $3,100.
By taking into account the full costs of the status quo health care system it became evident that paying people to take care of patients at home before they got to the point of needing the emergency room saves significant money. It also keeps people healthier and helps them avoid the stress and discomfort of a hospital visit.
I believe economic redesign and reinvention is one of the most important challenges of our age and I believe we have what it takes to meet this challenge.
In the year ahead I will be working on economic reinvention through several initiatives:
• Supporting the Pacific Coast Collaborative, which has set a bold agenda for accelerating clean energy and economic development along the West Coast of North America.
• Continuing participation in a burgeoning national and international effort to develop more accurate and useful tools for measuring the actual outcomes of economic activity. The most promising is the Genuine Progress Indicator.
• Contributing to Demos’ New Economic Paradigms initiative.
• Finally, continuing to lead the Prosperity Initiative, proactively addressing poverty in Oregon.
Many of you readers are already part of the needed economic reinvention, as innovators, social entrepreneurs, activists and policy-makers. We are a growing movement committed to a healthier, truly productive and prosperous economy. And that is positive growth indeed!
As some economic indicators begin to improve we must keep the pressure on and not be lulled into complacency. Simply returning to ever-escalating rates of income inequality and environmental destruction isn’t really recovery. It is time to get serious not just about making the economy bigger, but actually making it better. I look forward to working together on this crucial task in the coming year.
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