The last three decades have seen
substantial growth in GDP per capita in North America, combined with low
unemployment in recent years. However, what does this indicate about trends in
economic well-being? GDP per capita includes many items that do not improve
individual utility, while employment rates, strictly speaking, concern an input
to the process of production, not an enjoyable output. Section 1 of the paper
presents some evidence on trends since 1970 in unemployment, employment, hourly
wage rates and GDP per capita in the USA and Canada, and discusses their
deficiencies as indicators of economic well being. In Section 2, we argue that
the economic well-being of a society depends on: (1) effective per capita
consumption flows, which includes consumption of marketed goods and services,
un-marketed goods and services, and changes in life span and in leisure; (2)
net societal accumulation of stocks of productive resources, including tangible
capital and housing stocks, human capital and R&D investment, environmental
costs, and net change in level of foreign indebtedness; (3) income
distribution, (as indicated by the Gini index of inequality, and depth and
incidence of poverty); and (4) economic security (from unemployment, ill
health, single parent poverty and poverty in old age). The paper then develops
an index of economic well-being for Canada and the USA for the period 1970 to
1999 and compares trends in economic well-being to trends in GDP. Since growth
in GDP per capita exceeds growth in economic well-being, the paper concludes
with a discussion of how the "productivity" of economic growth might
be improved