This column is to appear in the Augusta Business Chronicle (August 2000).  Measuring Well-Being The US economy is doing fine. Practically everyone who wants a job can have a job. Average wages are rising, even when adjusted for inflation, because employees are productive and in demand. Unemployment is low, in some states as low as one percent. Consequently, government expenditures fall and tax revenues rise. GDP, i.e., gross domestic product or  the dollar value of all goods and services the US economy produces in a year's time, also rises when more people are employed. Indeed, US GDP is closing in on ten trillion dollars a year, a quarter of the entire globe's output. The higher is GDP or, when divided by the size of the US population, the higher is the average income per citizen, the better off we are -- or so says layman's wisdom. So, we should be happy, shouldn't we? Perhaps so, perhaps not. Like all economic statistics, GDP numbers hide as much as they reveal. For instance, GDP includes the dollar value of all income earned but if that income is earned by employing people to cut down every tree in the nation, surely we could not say that the nation is better off, inspite of its higher income. Indeed, Augusta's pollution problem is a reminder that higher income alone does not make us better off if the price we pay is a much worsened air quality. Along with other countries, the Bureau of Economic Analysis, housed in the US Department of Commerce, has begun to compute a so-called "green GDP" to take account not only of the income flows our economy generates but also of the environmental resource stock used up in generating that income. Another problem with GDP numbers concerns time-use. When I was much younger I used to marvel at young, hot-shot lawyers' salaries: $80,000 or even $100,000 a year, fresh out of law school. But then I learned that these young folks are also asked to put in work weeks of 80 and more hours. Thus, compared to a regular 40-hour work week their income isn't so outrageous after all. Obviously, the more hours we put in, the higher our income, but are we better off when more work time means the sacrifice of leisure time? For instance, the average US income is higher than the average German's income -- but Germans also routinely receive six weeks paid vacations as compared to two weeks or so in the US. What would you rather have: more income or more time? President Kennedy once said that if you have one foot on a hot plate and the other in the freezer, on average you'd be doing just fine. Similarly, if Bill Gates makes ten trillion a year, and you and I make nothing, on average we would be doing fine. In a word, reporting average GDP or average income per person hides differences in income distribution. Here the anglophone countries -- such as the US, United Kingdom, and Australia -- are doing a bad job. The rich are much richer, and the poor much poorer, than in comparable economies of western Europe. Average income numbers also hide income distribution differences across ethnic groups. A recent study reported in the American Economic Review (Vol. 90, No. 2, pp. 308-311) reported pronounced income differences among ethnic groups in countries such as Malaysia, India, Belize, New Zealand, and South Africa. Indeed, these differences occur in large countries as well as small ones (e.g., India and Belize), in high-income as in low-income countries (e.g., Australia and Canada as compared to India and Belize), in countries with high growth rates and those with low growth rates (Malaysia as compared to South Africa), and in countries with high general income-inequality as well as those with low general income-inequality (Brazil and Malaysia as compared to Canada and Israel). In a word, even though the average numbers do look really good for the US, don't put too much stock in them. Dr. J. Brauer is Professor of Economics at Augusta State University's College of Business Administration. He can best be reached via his web site (http://www.aug.edu/~sbajmb).