A reminder this week from the Organisation for Economic Co-operation and Development that the central purpose of economic policies is to improve people’s lives. With the release of an updated version of the report How’s Life?, OECD Secretary-General Angel Gurria called for a rethink of “how to place people’s needs at the heart of policy-making” as data showed that the global economic crisis has had a profound impact on people’s well-being, reaching far beyond the loss of jobs and income.
The OECD finds that over the past 20 years, OECD countries have made considerable progress in terms of overall well-being, but progress has been uneven between countries and in some countries, across population groups too.
Since 2007, the crisis has had a profound impact on households’ economic well-being, as well as on people’s sense of well-being in several OECD countries. Income and wealth, jobs and earnings, subjective well-being and civic engagement are the aspects of life that have been the most aﬀected by the crisis.
In terms of income, the euro area experienced the highest decline. Between 2007 and 2011, households in Greece, Italy and Ireland recorded a cumulative decline of 5% or more in their income, whereas households in Norway and Poland experienced a cumulative increase of 8% or more.
Employment and labour market conditions have deteriorated markedly as measured by higher long-term unemployment, involuntary part-time work and the number of discouraged workers and inactive people. Between 2007 and 2011, employment rates fell between 5 and 10 percentage points in Iceland, Slovenia, Portugal, the United States, Estonia and Denmark, and by more than 10 percentage points in Ireland, Greece and Spain.
Subjective well-being decreased signiﬁcantly in 2009 and in 2011 in the OECD as a whole, but particularly so in euro area countries most hit by the crisis. Between 2007 and 2012, the percentage of people declaring being very satisfied with their lives fell by 25 percentage points in Greece and by around 16 and 14 percentage points in Italy and Spain respectively.
Trust in national governments and in the way democracy works declined dramatically in the majority of OECD countries. Today, in the OECD euro area, less than half of the citizens trust their governments, the lowest level since 2006.