All over the country, citizens are demonstrating a desire to engage in serious discussions about how to measure quality of life and livable communities in the United States. For the past five years, Calvert Group has been preparing for this exciting debate. We are pleased to release in this initial volume the Calvert-Henderson Quality of Life Indicators, the first national, comprehensive assessment of the quality of life in the United States using a systems approach. The deep insights, illuminating findings, and bold explorations into historical and contemporary environmental, economic and social conditions of the country are our contributions to this important debate. We hope its messages and many lessons will empower people from all walks of life who are equally concerned about our future together on this planet. Barbara Krumsiek President and CEO Calvert Group December 1999 Chapter 1: Forward by Hazel Henderson and Chapter 2: Introduction by Jon Lickerman and Patrice Flynn

  This book, which launches and explains the ongoing Calvert-Henderson Quality of Life Indicators, is about change. It is no surprise to anyone today that our society and economy and the very fabric of our daily lives are undergoing rapid restructuring. The twin forces of globalizing technology and markets are accelerating these changes in all countries as they move us toward a seamless global economy.

  Many see these changes as ushering in a "New Economy." Business Week editorializes that technological productivity and globalization can continue to deliver low inflation and full employment with budget surpluses and lower interest rates as well. Others are more cautious, including U.S. Federal Reserve Board Chairman Alan Greenspan, London’s The Economist, and others who see the current U.S. economy quite differently. They worry about over-valued stocks leading to an asset bubble, record trade deficits, heavy consumer and corporate debt, and other potential threats, leading to a lower dollar that’s already giving ground to the euro as a global reserve currency. The debate concerns appropriate methods for measuring productivity and inflation.

  How can there be two such diametrically opposite views of the same market data and official national statistics? The answer relates to differing world views and assumptions underlying both the statistics and the mindsets of the analysts on whose interpretations we rely. What kind of mental models, or paradigms inform their judgements? These paradigms (or different pairs of "spectacles" through which they see the data) are key to understanding why so many brilliant people disagree, even those who spend their careers studying market and social trends in our globalized economy.

  This book and our ongoing Calvert-Henderson Quality of Life Indicators will enable the reader to peek into the minds of a wide range of experts on trends in our economy, society, and environment. The reader will understand how statistics, which always lag the real world, have fallen further behind as global change has accelerated. I hope that the reader will find it easier to interpret the proliferating debates about indicators and indexes of our national wealth, progress, health, and well-being. The reader can join the debates about whether the Consumer Price Index (CPI) overstates inflation (by up to 1.5 percent as the Boskin Commission reported) or if the CPI is understated (because it omits energy, food, and assets such as houses). This volume provides a statistical bedrock assessment of a wide range of key factors affecting the overall quality of our lives and our children’s future.

  The 12 Calvert-Henderson Quality of Life Indicators range far beyond the traditional national accounts of Gross National Product (GNP) and its narrower form Gross Domestic Product (GDP) and other money-denominated indexes on inflation (CPI), incomes, interest rates, trade deficits, and the national budget. Our indicators dig deeper, going behind the national statistics on employment, health, education, and the state of our infrastructure and national security. We are not trying to offer reweighted and recalculated versions of macroeconomic statistics, as many other worthy efforts have attempted. Our approach is to paint a broader picture of quality of life to complement current statistics and identify statistical "blind spots" where new data collection is needed.

  The study shows that current "statistical cameras" are pointed at areas where conditions are rapidly restructuring our institutions, whether business, government, academic, or civic society. For example, the composition of our GNP has been changing from goods you can drop on your foot to services. Statisticians are reformulating GNP to reflect these new realities, but still lag in recategorizing software and many other services, which together now represent the largest sector of our "Information Age" economy. Indeed in November 1999, the Bureau of Economic Analysis re-categorized software as investment rather than consumption in the GDP, which revised average productivity since 1990 from 1.5 percent up to 2 percent.

  All the world’s industrializing societies are undergoing similar changes and restructuring, as they move from the earlier to the later stages of the Industrial Revolution. Part of this great transition is toward information-based economies. Here knowledge, intellectual capital, and the more intangible human and social assets replace manual labor and some of the tangible capital earlier economic textbooks called the "factors of production." This transition is often accompanied by a deeper knowledge of natural processes and ecological assets and the services nature provides. We slowly shift to recycling our industrial materials in closed-loop production, waste-reduction, re-manufacturing, and re-use. An industrial design revolution is quietly under way.

  How was it that macro-economic statistics fell so far behind in mapping these fundamental shifts? A large part of the problem is that conventional economics and accounting considered air, water and nature’s purifying cycles to be "free" goods. Only recently have textbooks begun to embrace "full-cost" prices, which account for all the social and environmental costs of production. Only in the past decade, have we seen the rise of environmental and ecological economics, full-cost accounting, and life cycle costing for investment purposes. All this, together with the rise of social and environmental auditing – accounting for "intangibles" and intellectual property – and the many attempts to overhaul GNP and GDP represent a potential revolution in accounting and statistics.

  On the conceptual foundations of these early economic innovators, a host of new efforts to redefine human development, wealth and progress emerged in the 1980s and 1990s. David Morris of the Institute for Local Self-Reliance produced the Physical Quality of Life Index (PQLI) for the Overseas Development Council; Herman Daly and John Cobb created the Index of Sustainable Economic Welfare (ISEW) with Clifford Cobb in 1989. These indices deduct from GNP many environmental and social costs, arriving at a significantly lower "net GNP." They have been adapted widely in Europe, Australia, and the United States as the Genuine Progress Index (GPI) by 1995. Other approaches include the Fordham University Index of Social Health devised by Marque-Luisa and Marc Miringoff, also a consultant on our Calvert-Henderson Quality of Life Indicators.

  To mixed reviews, the Clinton Administration attempted to "green" the GDP by means of an Integrated Environmental and Economic Satellite Account (IEESA) developed by the Bureau of Economic Analysis (BEA) of the Department of Commerce in 1994. The Congress directed the BEA to halt this work and charged the National Research Council to review the entire issue. In late 1999, the Council issued its report, Nature’s Numbers, urging that the BEA be funded to re-start this effort. The World Bank in 1995 issued its own Wealth Index, which redefined "the wealth of nations" in significant ways. The World Bank now defines 60 percent of this wealth of nations as "human capital" (social organization and human skills and knowledge), 20 percent as environmental capital (nature’s contribution), and 20 percent as "built capital" (factories, finance, capital). This caused a major change in the economics profession, with many of its best minds embracing pieces of the new thinking including Joseph Stiglitz, now the bank’s chief economist, Harvard University’s Jeffrey Sachs, and the Massachusetts Institute of Technology’s Paul Krugman.

  Perhaps the most influential, widely used and quoted new formula is the United Nations Human Development Index (HDI), produced by the UN Development Programme every year since 1990. The HDI began by weighting per capita income (in terms of Purchase Power Parity), education, and life expectancy to produce a rank for every one of the 187 member countries of the United Nations. The HDI updates and enhances its methodologies regularly, to include military vs. civilian budget ratios, environmental factors, poverty gaps, gender, and human rights data. The HDI has become a world benchmark on government performance and has given rise to some 50 national HDI versions.

  The most pressing methodological debate over new measures of wealth, progress, and human development has concerned the extent to which money coefficients and macroeconomic models can capture broad new areas of concern: human rights, health, education, environmental, and overall quality of life. Such methods currently weight all data from different economic sectors into one index. Many believe, as we do with the Calvert-Henderson Quality of Life Indicators, that aggregating all these "apples and oranges" into one index is inappropriate and often confusing. Another issue concerns the use of "satellite accounts" for such environmental and social data. This designation indicates lesser value for such data. We further believe that the diverse areas of quality of life covered in the Calvert-Henderson approach deserve their own metrics, specifically metrics that are most appropriate within the diverse disciplines that study such fields. For example, money coefficients cannot quantify human rights, air and water quality, recreational satisfaction, education, health, public safety, or national security. Money measures and percentages of national budgets can give clues about quality of life but are often simply input data. Composite indices do not measure outcomes or results. In all the indicators we created, with the help of our experts in each area, we present a model linking the major factors and processes, providing a roadmap of how decisions flow through various institutional structures to create outcomes. These systems models help identify why in each area, our country has succeeded or fallen short in achieving its stated policy goals.

  In examining each area or domain of quality of life, we have been in a process of discovery. Surprises came as we rethought how each indicator contributed to or, in some cases, diminished our overall quality of life. We identified the "holes" in the statistical pictures and where data-gathering needs new focus.

  Most of all, in this five-year research project, we all came to appreciate each others’ expertise and began to see a bigger picture. Thus, our 12 unbundled indicators came together as a broader pattern represented on our cover, while at the same time, retaining the richness and detail of each of the 12 domains. This systems approach allows us to display the wealth of diverse data rigorously without the loss of detail, which plagues any single index approach.

  In each indicator, the domain it covers is related to all the other indicators. The 12 indicators were selected using many sources. Firstly, they are major areas of public concern as reflected in public opinion polls, the media, political campaigns, and debates over decades. Secondly, these domains are most often covered in many of the existing sets of local state, national, and international statistics we reviewed. However, few integrate so many diverse elements as in the Calvert-Henderson Quality of Life Indicators or include such groundbreaking approaches. Each one of our indicators is grounded in current demographic data, allowing revealing insights often invisible in highly averaged indices. Furthermore, in two separate polls on governmental reform by the highly respected Americans Talk Issues Foundation, Americans were asked if they approved or disapproved of the following proposal:

"In the same way we’ve developed and use the Gross National Product to measure the growth of the economy, [we should] develop and use a scorecard of new indicators for holding politicians responsible for progress toward other national goals, like improving education, extending health care, preserving the environment, and making the military meet today’s needs."

  In these two surveys in March of 1993, 72 percent of the American people agreed that such quality of life indicators were needed. These results were verified in a debate format where an opposing view was offered in the second survey in January of 1994:

"Opponents say that eventually economists will be able to calculate a single indicator of progress, a kind of enlarged GNP, that bundles into this money-based statistic our progress in all major areas including the economy, health, education, the environment, and so forth. This single number would be easier for everyone to use to rank ourselves against other nations and to judge the performance of our political leaders."

  Only 22 percent of respondents found this opposing view to be convincing, and when the original question was asked again, support went up to 79 percent (Kay 1998). Now, a word about each of our indicators, regarding the rapid transformation our society is experiencing, and how each indicator may evolve to capture such changes in our world. The indicators are presented in alphabetical order to reflect our belief that each domain is equally important in understanding quality of life in a holistic manner.

Education

  Our Education Indicator gives an overview of current educational issues. Swirling around the debates over educational reform, school vouchers, "charter" schools, and home schooling are those on the shift to today’s globalized information-based economy. Knowledge is now widely recognized as a key factor of production. The World Bank and other multilateral institutions now agree that investments in education (particularly at preschool and K through 12 levels) are the new keys, along with investments in health, to economic development. Nothing is changing our business and academic institutions faster than the new definitions of human and intellectual capital. As many new Internet-based, e-commerce businesses know, a company cannot "own" the part of its knowledge base that resides in the heads of its employees. The rise of generous stock options, partnerships, and Employee Stock Ownership Plans are all related to this new evaluation of intellectual capital on which all technical and social innovation is based. Today, more than ever, education is a basic human right in many other countries as well as in the United States. Furthermore, levels of education will drive all the world’s economies toward development, depending on how they structure and invest in educating our most precious resource: our children.

Employment

  The field of employment and work has changed immensely in the past decade. We have come from a recession in the early 1990s to the lowest (4.1 percent) unemployment recorded since the 1950s. This has caused a rethink of the Non-Inflation Accelerating Rate of Unemployment (NAIRU) used by the Federal Reserve Board in setting interest rates. A NAIRU under 5.5 percent was thought to be inflationary. Today, our economy is running at higher levels of employment without this expected rise in inflation due, many say, to the "New Economy" factors mentioned earlier. Our Employment Indicator reminds us that a large but not well measured percentage of productive work is unpaid. This unpaid work in caring for elders, the sick, and children in home or volunteer organization settings is unaccounted for in the GNP. Many organizations in the nonprofit, civic sector of our society now call for full recognition of the value of this caring work. Some call for housework and parenting to be paid, through statutory pension benefits or in marriage contracts. This area of concern will likely grow as both parents in families are in the paid work force. The "family values" debate encodes many new dilemmas faced by parents as they juggle two jobs plus child care and elder care as our population ages. Worldwide, the United Nations HDI in 1995 estimated unpaid work by the world’s women at $11 trillion and by men another $5 trillion. This $16 trillion total was simply missing from the 1995 World GDP of $24 trillion. In addition, our indicator tracks the growing ranks of the self-employed, part-timers, and the composition by gender, ethnicity and age of the U.S. workforce.

  And whatever happened to the promise of the Industrial Age for more leisure, as machines and automation took over production tasks? Today, Americans work longer hours than their counterparts in Europe and Japan. Yet, there is much debate over the statistics on work and leisure, as we learn in our Re-Creation Indicator.

Energy

  This indicator is a key to the overall efficiency of our economy. Our GNP has been growing with less energy input in the past 25 years, since the first OPEC oil embargo in 1973. But the United States still lags Japan and Europe, using almost twice the energy they use per unit of GNP. This puts the United States in an uncompetitive position in our older manufacturing sectors even as our Internet-based "New Economy" grows. Our reliance on low-fuel efficiency cars and fossil fuels decreases our flexibility. All these issues of restructuring our economy came to a head in the debate over climate change. The fossil fuel industry lobbied hard and spent millions on ad campaigns to oppose the 1997 Kyoto Agreements to reduce fossil fuel carbon emissions. Yet the scientific evidence now overwhelmingly points to the need to reduce such emissions. Many analysts, including Amory Lovins of the Rocky Mountain Institute in Colorado, believe that the fossil-industrial transition to the Information Age and what I have called the Solar Age will usher in a prosperous, profitable economy based on renewable resource use and deeper knowledge. Thus energy-efficiency can mean less waste, higher, cleaner profits, more comfortable homes, communities, and travel with less pollution. The transition from here to there is illuminated in the Energy Indicator.

Environment

  This indicator seeks to embrace the interactions between human society and our economic processes and the natural world, its resources, and other species. Naturally, such a task is too enormous to do more than find within the model some key "surrogate" indicators as proxies for such a vast area. We are learning more about our environments locally and about planetary ecosystems, the crucial role of biodiversity, and human effects on the ozone layer and climate.

  While our Environment Indicator recognizes these broad concerns, we focus attention on indicators closest to the lives of a majority of U.S. citizens. Air and water quality became our focus, since people cannot survive without acceptable air and water quality. The National Research Council’s 1999 report, Nature’s Numbers, also notes "Greater emphasis should be placed…on measuring actual human exposures to air and water pollution" (Recommendations 4.3 and 5.9). Through these lenses we can understand better the causes of degradation and pollution and the many steps needed to reverse these threats. As our systems approach reveals, many other domains of quality of life, such as infrastructure design, energy use, shelter, health, employment, public safety, and national security, all impinge on our environment for better or worse.

  Sheer population increases show by most forecasts a rise of between 8 to 10 billion people on our planet early in the new millennium. However, the huge global gap between rich and poor still shows that per capita consumption of energy and resources in the United States is some 50 times greater than that of 2 billion of the world’s poor and undernourished. Thus, the most potent threat to the environment is waste and over-consumption, with the United States as the world’s chief polluter. As we see in our other indicators, the potential for redesigning our infrastructures and production methods using better information and "greener technologies" can also benefit the world’s climate and ecology as well as our own quality of life.

Health

  Our Health Indicator begins by explaining that the United States provides more health care services at higher costs per capita than any other country in the world. This enormous sector of our economy is becoming a top focus of national concern since it delivers only modest improvements in health status in some areas and none in others. Of growing concern are the some 50 million Americans who have no health insurance and the debate over a "Patient’s Bill of Rights" to hold health maintenance organizations and insurance companies more accountable for decisions over patient treatment.

  This indicator offers a model of our current system that helps to clarify the situation as a systemic set of issues. Health is being redefined beyond the medical intervention model. Today, Americans are focusing on prevention, stress-reduction, and life-style choices. Tobacco and alcohol use and even the availability of guns are issues entering the public health debate. More Americans now consult "complementary" and "alternative" health providers than visit conventional medical doctors and facilities. This is a paradigm shift that is restructuring the entire medical-industrial complex and its technocratic, bureaucratic approach, which represents more than 13 percent of our GNP.

  How will we integrate these two very different approaches to health? How will we provide for those left out of the current system, especially children? An October 1999 study in the Federal Reserve Bank of New York’s Economic Policy Review cites the effects of urban poverty. Fifteen-year-old black and white males life expectancy rates were compared in several cities. In areas of New York City that were predominantly low-income and African American, only 37 percent of the population was expected to live to age 65. In Detroit, the figure was 50 percent. White fifteen-year-olds in poverty areas of Detroit and Cleveland did a little better. In Detroit, 60 percent were found likely to live to age 65 with 64 percent likely in Cleveland. Average life expectancy for all U.S. whites is 77 years compared to 62 years for blacks. Our indicator allows us to see such gaps, which, of course, relate to similar data in our Income, Shelter, Safety, Education, and Human Rights Indicators.

Human Rights

  This indicator views the state of human rights in the United States in broad areas: fundamental rights to the security of person and the U.S. Bill of Rights and Amendments to the Constitution, including freedom of expression, religious freedom, right of assembly, and voting rights. Beyond these basic rights, the model embraces an evolving international view embodied in the Universal Declaration of Human Rights.

  These and other human rights issues are of great concern in Europe, Japan, and Canada and serve as a cornerstone of U.S. foreign policy. Today a crucial issue is to what extent the sovereignty of a nation must be balanced with the human rights of its citizens. Many other countries include in human rights economic, cultural, and social rights (to education, social participation, health care, leisure time, and to social security). Another evolution concerns the embracing of women and children in the definition of human rights – now widely recognized – if not fully achieved. This indicator is crucial to quality of life in the United States and worldwide.

Income

  Our indicator dissects conventional macro-statistics to reveal important information concealed by the averages. Although U.S. incomes at the low end have been essentially flat for over a decade, there are now signs of increase due to the "New Economy" phenomenon. Yet the gap between rich and poor Americans is still historically high, an issue that does not bode well for any democracy. Other issues include the extent to which technology and globalization are squeezing the incomes of less skilled Americans. These issues also relate to our Employment and Education Indicators. And what are we to make of the 1995 national survey by the Merck Foundation and the Harwood Group that found 28 percent of Americans had opted for lower incomes and moved to rural communities in order to improve their quality of life? Clearly, values are changing and new trade-offs are being made between more money and more time, tranquil and less-polluted environments.

Infrastructure

  This indicator unpacks macro-statistics to reveal an ongoing debate: to what extent has our country been overlooking the vital role its infrastructure plays in undergirding our economy. Historically, infrastructure referred to highways, railroads, harbors, bridges, aqueducts, public buildings, dams, and the like. As our industrial societies evolved, we added airports, communications systems, energy supplies, water, and other utilities. Today, we think of infrastructure as including education, research and development, computerized "backbone" systems, and all taxpayer-supported systems that we use in commerce and on which large sectors of our economy rely. A recent trend picked up by our indicator is that of the privatization of growing areas of our formerly publicly owned infrastructure, including electric utilities, phone, water, and other services. Such publicly-funded investments used to be "expensed" items in our GDP accounts. As of 1996, a more realistic asset budget in GNP now accounts for such investments as "assets" since they often have a useful lifetime of 50 to 100 years or more. This accounting change has contributed to the budget surplus. This indicator is related to most other indicators, as infrastructure is the key to energy-efficiency, whether our cities sprawl over virgin lands and farms, or whether we infill older or vacant land in our cities. These factors, in turn relate to environmental protection, pollution, housing , education, public health, and safety.

National Security

  The U.S. public’s view of national security has been changing for over a decade. Even before the end of the Cold War, Americans were identifying global economic competitiveness and environmental pollution as issues of national security beyond traditional military views of defense.

  Our National Security Indicator reveals how Americans, Congress, the Executive Branch, and a host of institutional players actually shape our current national security policy. This inside view from a retired military officer, identifies other potential lags in the military view of national security. These relate to prevention of threats and conflicts. These must be addressed via intelligence, diplomacy, treaty-making, surveillance, and verification most often involving allies and multilateral agencies including the United Nations.

  Short-changing such anticipatory, preventive policies inevitably leads to more drastic, expensive military interventions such as those that might have been prevented in Bosnia, Kosovo, East Timor, and other trouble spots. Yet our indicator shows an alarming drop-off in such preventive activities, including deteriorating U.S. embassy facilities, cuts to State Department diplomatic activities, pull-backs from international peace-keeping and surveillance operations with our allies and the United Nations. As this volume goes to press, the Congress voted to pay some of our now $1.6 billion arrears owed to the UN. The public debate about a "new isolationism," the changing meaning of "national sovereignty," and globalization will continue for years to come. Our National Security Indicator will provide an ongoing roadmap to clarify these issues, which are fundamentally linked to all other areas and indicators of our national life.

Public Safety

  Our indicator maps the rapid evolution in the debate about this aspect of our quality of life. As our society became more complex, the views that safety was a personal affair and risk-taking a private choice evolved. While individuals are still largely responsible for their behavior, today we live in an interdependent world. Many risks of daily life (e.g., exposure to toxic wastes, gun violence in schools, car and highway design, and risks in foods and other products) are involuntary and often unavoidable. Thus our indicator also captures these new concerns in public safety and links today’s risks to health, education, and cultural factors. Crime statistics and the tragedies of gun violence are seen in this larger setting. This systemic view provides insights for individual risk-reduction and may help us rethink our views on improving public safety.

Re-Creation

  This indicator goes beyond the material aspects of our existence and our focus on healthy bodies and well-educated minds to our spirits and how we re-create ourselves. Of course body, mind, and spirit are all integrated within our lives. We all have diverse ways of expressing these aspects of our being and personal development.

  Our indicator embraces all these aspects in mapping our extraordinarily diverse forms of recreation from volunteering in community projects, helping preserve wildlife, and serving the poor to attending concerts, museums, or just enjoying bowling, hunting, and fishing. The model traces how we organize and spend our private and public resources on such recreational activities. The indicator embraces self-improving experience (from religious, spiritual pursuits to other forms of self-development); patronizing the arts; physical sports and fitness; do-it-yourself crafts; gardening; home-improvement; hobbies; vicarious experience (TV, video games, and the Internet); socializing and home entertaining; travel and tourism (now the world’s biggest industry); games of chance and betting; and chemical escape (alcohol, tobacco and drugs).

  This indicator is a fascinating panorama of these evolving activities of Americans, which together form the largest and fastest-growing sector of our services-dominated economy. Statistical and methodological debates abound on the size and shape of this emerging "Attention Economy" (Henderson 1996). How can we resolve the debates about work and leisure time? As in all our indicators, we become vividly aware of the crucial nature of statistics and the assumptions and paradigms driving their collection.

  The rapid evolution of the entire field of self-development and re-creation augurs additional social and political change. Today’s drive for self-development-an essentially spiritual need-is now spilling over into our material lives through the growth of socially responsible investment and in communities opting to honor their local past and culture by building museums and art galleries, as LORD Cultural Resources Principal, Kathleen Brown continues to document. Over 109 million Americans volunteer at least 3.5 hours a week in their communities, and the nonprofit, voluntary sector contributes between 7 percent and 10 percent of the GNP (Independent Sector 1999). A 1999 poll cited in Business Week, found that 78 percent of Americans say that they feel the need in their lives to experience spiritual growth, up from 20 percent in 1994. Our Re-Creation Indicator will keep us aware of such changes.

Shelter

  This indicator dissects the macro-economic data to reveal a "good news, bad news" picture. The American dream of home ownership has never been so fulfilled, with a record 66.3 percent now owning homes. A majority of Americans are well-housed with over two-thirds in affordable, physically adequate, uncrowded housing. The bad news is that shelter deprivation still exists in spite of our economic expansion. Some 5.3 million low-income renters are in distress and an additional half to three quarters of a million Americans are homeless at any given time. These statistics seem to be a reflection of our national poverty gap shown in our Income Indicator. The state of shelter in the United States also affects opportunities for social mobility, education, and energy efficiency, and thus is related to many other indicators, including Employment, Health, Energy, and Environment.


  In summary, I hope that this brief overview of our Calvert-Henderson Quality of Life Indicators will whet your appetite to delve deeper into this volume. Perhaps you will keep it as a desk reference as your interest in some or all of these aspects of quality of life is deepened. We will continue tracking this holistic view of our lives, society, and the economy with the help of Flynn Research and Patrice Flynn, our co-editor.

  It only remains for me to thank Patrice and our co-editor Jon Lickerman, Director of Calvert Social Investment Research Department, and all his colleagues, including Bruce Kenney, Shannon Pearce, and Adrienne Fitch-Frankel, for their thoughtful and dedicated contributions to this project. I am deeply grateful to both Jon Lickerman and Patrice Flynn for their wisdom and tenacity in wrestling with the mountains of data that we sifted and sorted into our indicators. I salute all of our experts in each area for their insights, academic rigor, and willingness to work together with us on this lengthy project. I salute our CEO, Barbara Krumsiek, who recognized the value of this project in the first weeks of her tenure and gave us all wholehearted support. My deepest gratitude goes to my dear colleague of 20 years, D. Wayne Silby, co-founder of Calvert Group who quietly encouraged me to introduce it to our Calvert Social Investment Fund Advisory Council almost 10 years ago. Chaired by Tim Smith of the Interfaith Center on Corporate Responsibility, this Council, on which I have served since 1982, has been "family" to me. The Council embraced the Calvert-Henderson Quality of Life Indicators and recommended the project to the Calvert Group. The results are in your hands.

References

Henderson, Hazel. 1996. Building a Win-Win World: Life Beyond Global Economic Warfare. San Francisco, CA: Berrett-Koehler Publishers.
Henderson, Hazel. 1988. The Politics of the Solar Age: Alternatives to Economics. Indianapolis, IN: Knowledge Systems, Inc. and New York, NY: TOES Books.
Independent Sector. 1999. Giving and Volunteering in the United States Executive Summary. Washington, DC.
Kay, Alan F. 1998. Locating Consensus for Democracy: A Ten-Year U.S. Experiment. St. Augustine, FL: Americans Talk Issues Foundation.
National Research Council. 1999. Nature’s Numbers. Washington, DC: National Academy Press.

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  This volume is the culmination of a five-year research effort to paint a broad picture of the quality of life in the United States. It was created jointly by a multi-disciplinary group of practitioners and scholars from government agencies, for-profit firms, and nonprofit organizations who see the need for more practical and sophisticated metrics of societal conditions. The Calvert-Henderson Quality of Life Indicators allow individuals and/or groups to access in one place a comprehensive picture of the overall well-being of the nation in a manner that is easy to understand and use, statistically verifiable, grounded in theoretical and empirical knowledge about each domain, and rigorous in its treatment of the subject matter. The study offers a primer on the deeper trends and complexities that underlie oft quoted national statistics on quality of life. It is our hope that the Calvert-Henderson Indicators will be used to educate the public; broaden the national debate about our social, economic and environmental conditions; hold government and business accountable; and clarify the multiple choices we make as individuals in our work, education, leisure, and civic commitments.

  The Calvert-Henderson Quality of Life Indicators represent the first national, comprehensive effort to redefine overall quality of life using a systems approach. The variables included in our definition of national quality of life are diverse, complex, and wide ranging. The indicators include traditional economic measures of employment, income distribution, and housing, along with assessments of infrastructure, health, and education. Our approach reviews aspects of public safety and energy consumption and their relation to quality of life while tackling complex issues related to national security, the environment, human rights, and re-creation. We believe that all of these measurements are necessary to attempt a comprehensive view of national well-being.

  This report is a public education tool by which to distill and assess national trends. We report in-depth on major issues, some of which may be generally familiar to the readers and others unique to our work. We present comprehensive and complex views on each indicator, yet we do not offer a critique of what is working or what is not. The indicators suggest, for example, a growing divide in national incomes, significant improvements in national air quality, historically high home ownership rates, and a long-term decline in public infrastructure investment. We do not pass judgment on these trends, nor do we offer solutions or policy recommendations to some of the major challenges of our time. Our goal is more basic: to inform and present a framework through which to understand and assess salient national trends, using rigorous empirical techniques and reliable data.

  In this era of information overload, the availability of reliable information, accompanied by an analysis of how to make sense of national data, is more critical than ever. The old adage that in a democracy "information is power" remains. An informed citizenry that has the intellectual tools and critical judgment to make sense of a complex picture exponentially increases its influence. To be understood, statistics must be placed in context to enhance its meaning. The Calvert-Henderson approach was designed as a response to this observation. We dedicate a chapter to each of the 12 Calvert-Henderson Indicators to bring the readers up to speed on the state of each indicator. We describe in detail the cutting-edge thinking on the topic from the perspective of scholars and practitioners well-versed in the respective fields of study. Complex issues are deconstructed by each author; underlying elements driving outcomes are revealed and discussed. We intend for this report to inform the public debates within government, business, and communities on our national well-being.

  Although this study is not prescriptive, we are not impartial to national trends. We share a deep concern, accompanied by optimism, regarding the many findings that come out of this report. We believe that a broader, deeper, and more inclusive national debate about "what matters" is essential. As Hazel Henderson says, "we measure what we treasure." Therefore understanding the complexities of income distribution, environmental quality, and the status of education, among other issues, is essential to drawing a clearer picture of the health of the nation.

I. Origins of the Report

  This study grew out of an 18-year relationship between an international futurist and an asset management firm. Calvert Group is a 23-year-old asset management company that is a leading specialist in the field of socially responsible investing. Hazel Henderson is an independent futurist, author, and pioneer in the field of sustainable development. Dr. Henderson authored and helped steer the quality of life conceptual approach for this project, which is based on her Country Futures Indicators©, and Calvert Group lead the research effort.

  So it might be asked, why is an asset management firm toiling in the field of quality of life indicators? The answer lies in Calvert’s specialty in socially responsible investing (SRI). At its core, SRI is about assessing the societal impacts of investments. Calvert and its cohorts apply an investment strategy that integrates portfolio management with the promotion of a healthy, equitable, and sustainable society. Simply put, we invest in companies that treat their workers well, minimize their environmental impact, contribute to their communities, and make healthy and socially useful products.

  Over the course of our practice in socially responsible investing, it became evident that there were no broad indicators by which to guide our unique investment strategy. Yes, our portfolio managers had traditional economic indicators to help guide their financial investment decisions. Routine releases of the Consumer Price Index, housing starts, consumer credit, manufacturing orders and capacity utilization, job vacancies, growth in average earnings, productivity, and unit labor costs all provide information to navigate the direction of economic cycles and investment strategies.

  Yet no such measurements existed to assess how a specific company contributes to or is affected by broader societal and environmental trends. While Calvert analysts had developed sophisticated tools to analyze a specific company’s environmental impact, for example, there were no reliable indicators to determine the larger environmental trends. How was it that we could analyze the environmental impact of a major chemical company, yet we could not ascertain the overall quality of the environment in which it operates? Company management typically insists that it is improving its overall environmental record. We did not have the tools to assess whether indeed environmental quality was improving or worsening as a result of a company’s behavior.

  In a similar vein, when reviewing how to invest in the fast food industry, analysts had no indicators that would elucidate how further investments in an inherently low wage industry might impact broader socio-economic trends. What were the trends in national income distribution? What were the demographics of this traditionally low wage segment of the workforce? Was this growth industry contributing to increased national income disparities or simply providing a low rung step in the ladder of economic development for workers?

  As a leading practitioner in the field of socially responsible investing, Calvert analysts did not have tools similar to those available to traditional investment professionals. We understood the need for a broader array of socio-economic indicators. We also began to understand that there was little information available to understand the relationships between economic forces and societal or environmental impacts. This dilemma led Calvert into the field of quality of life indicators.

  Calvert analysts had a hard time separating their professional responsibilities from their roles as citizens. We saw that there was a broader audience who might benefit from analytical tools that take a comprehensive view of societal trends. Within the asset management business there are many proprietary tools, but very few are shared with the public. Calvert eventually decided to open up the process of developing quality of life indicators, work with a group of independent experts, and take our findings public. As this project unfolded, we at Calvert eventually understood our work as one of public education.

  On a personal note, the editors of this volume individually received their introduction to the subject of quality of life indicators in various ways. Hazel Henderson’s alarm in having to wash off pollutants from her daughter Ali’s tiny body resulted in her leading a group of citizens to develop the now well-known air quality index in New York City in the 1960s. Hazel went on to dissect the problems of macroeconomic indexes and lend her support to Marian Chambers’ Jacksonville Quality of Life Indicators in the mid-1980s, setting a precedent for community indicators project. Jon Lickerman received his introduction to the subject while working as a researcher and manager at Working Assets (now Citizens Trust) in San Francisco in the 1980s. Patrice Flynn became involved with quality of life indicators at the Urban Institute while working on the National Neighborhood Indicators Project in the 1990s. We have all watched the quality of life movement ripen and provide essential information for scholars, practitioners, funders, policy makers, and leaders in the United States and abroad.


II. Quality of Life Indicators Studies

  The Calvert-Henderson Quality of Life Indicators deal with the application of statistics to the measurement of environmental, social and economic conditions over time. The project rests on the wealth of knowledge gained from four major fields of research. The first is the field of sustainable development or environmental indicators, which began in the 1950s in the United States, and has gained increasing attention among scholars, advocates, and elected and appointed leaders. A December 1998 report, spearheaded by David Berry with the U.S. Interagency Working Group on Sustainable Development Indicators, entitled Sustainable Development in the United States, provides a valuable reference point on the state of sustainable development research.

  The Calvert-Henderson study also builds on the vast literature on social indicators. In the United States, the social indicators movement began in the 1960s with the well-known study by the American Academy of Arts and Sciences study for the National Aeronautics and Space Administration (NASA) from which Raymond Bauer coined the term "social indicators." The field of social indicators involves "issues related to variables and organizations that have an effect on the subjective and/or physical well-being of individuals, groups, communities, and/or society" (International Society for Quality of Life Studies). Kenneth Land’s forthcoming article in the Encyclopedia of Sociology is a seminal treatise on the origins and state of social indicators in the United States as we cross into the 21st century (Land 2000). The collaborators in the Calvert-Henderson project learned a great deal from the pioneers in the field of social indicators.

  The authors of the Calvert-Henderson Indicators also relied upon the solid research and analysis on economic indicators in the United States, mainly through the vast Federal government statistical system put in place in the 1910s and further developed in the mid-1940s. Scholars, business people, and citizens have come to rely upon these economic statistics, which are reported on a consistent basis. The monthly Economic Indicators, prepared by the Council of Economic Advisors for the Joint Economic Committee, provides a summary of these data. The fourth source of knowledge upon which the Calvert-Henderson Indicators grew was the growing body of information on socially responsible investing (SRI), which now represents an estimated $2 trillion in the United States alone. Over the past 15 years, SRI analysts have struggled to develop reliable metrics on company performance. The annual review by the Environmental Information Service, a unit of the Investor Responsibility Research Center, is a good source of information on measuring company social performance.

  Historical and contemporary efforts to assess the nation’s progress and well-being thus informed the design and development of the Calvert-Henderson Indicators. We believe the results provide a well-developed next step in the collective effort to measure quality of life from a holistic perspective. It is now common to describe the GDP as a less-than optimal measure of the progress of a nation or community. Numerous groups are developing alternative measures of progress and collecting many bytes of data. Missing at this junction, however, is a methodology for organizing, synthesizing, and analyzing these myriad statistics in ways that allow the bytes of data to be transformed into meaningful "indicators" to help citizens understand and influence complex socio-economic phenomena. The Calvert-Henderson Quality of Life Indicators provide such a methodology to add transparency and traction to the current efforts and advance the thinking about quality of life indicators.


III. The Calvert-Henderson Approach

  There is no existing indicators project that rivals or duplicates the Calvert-Henderson approach, which is unique in several ways. First, the approach was designed and implemented by a multi-disciplinary group of researchers, scholars, and practitioners with considerable expertise in creating and using indicators in their respective fields of study. The 15 authors who contributed to this study worked intensively with the editors to design the conceptual models and concurrently frame the issues. This process greatly informed the rigor and innovation of this study.

  Second, the indicators unbundle central social, economic, and environmental issues into 12 distinctive domains of quality of life. This contrasts with macro-economic indicators or recent "green GDP" analogues that collapse the elements into a single composite index, mask how figures are calculated, and cancel out countervailing forces. Third, the indicators reveal the underlying trends and deeper processes that accompany the daily reported news events. Fourth, all of the indicators identify interfaces with other domains, allowing a systemic overview of our society often concealed by aggregation of traditional indices.

  The Calvert-Henderson Indicators include traditional components of macro-economic indicators that directly affect Americans’ quality of life, including Employment, Incomes, Shelter, and Infrastructure. We include an indicator on the natural Environment, which has emerged as a separate field of indicator research and strongly influences overall quality of life. Energy use is included as a focus, since it has a major impact on environmental and economic quality. Traditional socio-economic domains include Health, Education, and Public Safety. We expanded our purview to include Re-creation, as leisure activities, art, culture, and humanities can also contribute to a high quality of life. Finally, we include the domains of Human Rights and National Security, which address fundamental rights we enjoy as Americans. They incorporate our basic political rights and our collective need to secure and maintain our way of life in a changing world of complex, geopolitical forces.

  Each indicator provides a road map into its subject, explaining leading concepts, and detailing national trends through time series data. National statistical information is presented on a host of variables included in each indicator. Data are primarily from the federal statistical system. Where federal data gathering is lacking, the authors make note and, in some cases, input data from private sources. The information is presented in a language that is accessible to those not necessarily schooled in the respective fields examined.

  Also unique to this project is the development of a model for each indicator that serves as a frame through which the underlying phenomena can be clearly organized, examined, and understood. The model outlines and prioritizes key concepts and relationships that are central to understanding each domain. The models immediately reveal to the reader what is and is not in the indicator, the type of data presented, and how to expand upon the information. As described in more detail in Chapter 3, the models provide the cornerstones through which time series data can be viewed and analyzed in order to provide meaning and context when dealing with complex issues.

  For example, assessing the quality of the environment is a huge task given its all encompassing domain. The Calvert-Henderson Environment model focuses on economic and industrial processes and their contributions to environmental quality through the lense of two key indicators – air and water quality – that can be monitored over time. Similarly, within the Income and Employment domains, there is a plethora of data and categories available for measuring economic activity. Thus the challenge was to develop conceptual models that would limit the purview and quickly identify what the respective authors viewed as key to understanding the phenomena today. In contrast, data on National Security and Re-Creation were not as readily available, thus the models are more theoretical, whereas the Human Rights Indicator is grounded in the U.S. Constitution and case law. In these ways, the Calvert-Henderson models reflect the unique nature of scholarly research and data collection in each field of study.

IV. The Calvert-Henderson Indicators

Brief descriptions of the 12 Calvert-Henderson Quality of Life Indicators are as follows:

• Education Indicator summarizes the quantity, quality and distribution of education in the U.S. defined as life-long learning and contributes to the broader dialogue on who learns what, where, when, and how throughout the life cycle.
  
  
• Employment Indicator describes the structure of employment in the U.S. as developed by the government and amended by private research efforts and helps clarify basic questions as to what constitutes "employment" and "unemployment" and what it means when figures fluctuate over time.
  
  
• Energy Indicator describes how much and how efficiently energy is consumed in the U.S. and provides feedback to the public on what can be done to reduce the environmental impact of energy consumption.
  
  
• Environment Indicator presents detailed information on the health of our environment with a special emphasis on the production-consumption process. A research focus on water and air quality offers data of primary interest to the general public.
  
  
• Health Indicator initiates a discussion on what constitutes "health" and examines the overall state of health of the people in America by age, race and gender.
  
  
• Human Rights Indicator examines the degree to which the Bill of Rights is protecting U.S. citizens and the level of citizen participation in the electoral process.
  
  
• Income Indicator focuses on changes in the standard of living as reflected in monetary measures of family income. The indicator examines and explains trends in the level and distribution of family income and wealth along with stagnant and unequal wage growth over the past 25 years.
  
  
• Infrastructure Indicator explains the importance of the physical infrastructure to our economy and provides an example of how to supplement our national accounts with an improved asset account to monitor our physical stock.
  
  
• National Security Indicator explains the process our nation takes to achieve a state of national military security beginning with the President’s National Security Strategy through the Congressional Budget Process. This includes both a diplomatic strategy and a military strategy, all of which are affected by public opinion and the perceived threat to security.
  
  
• Public Safety Indicator examines how effectively our society promotes private and public safety when faced with complex interrelationships between personal decisions, public actions, risks, and hazards in the environment that result in deaths from injuries.
  
  
• Re-creation Indicator provides a novel approach to identifying the myriad ways that Americans chose to re-create the self, to be revitalized in body and mind, and to reestablish social contacts through leisure and/or recreational activities.
  
  
• Shelter Indicator explores the type of housing Americans have access to, the level of affordability of that housing, and how housing in turn affects broader social outcomes.
  

  In sum, each quality of life indicator includes a unique conceptual model, national statistical trends, and analysis to bring the reader up to speed on the subject. Our intent is that the indicators serve as sophisticated primers on the respective topics. We do not attempt to unify the information or devise a new theory to measure or explain how society is doing overall. Further research will explore the relationships across domains and build on the foundation we have laid to define what constitutes quality of life for the core indicators and provide reliable, consistent, and verifiable statistics from which the reader can come to their own conclusions about quality of life.

  We envision multiple audiences using and benefiting from the Calvert-Henderson Quality of Life Indicators and the underlying models and data. For example, we hope that the models can become a starting point for community groups who want to quickly get a handle on an important issue and do not have the resources to fund such research locally. We invite groups to customize the models by adding components that are unique to a given community and/or deleting elements that are not applicable to the situation at hand. We offer the findings to professional journalists and reporters who are searching for reliable, consistent and verifiable data on key issues of concern to Americans coupled with a story to put the data in context. We envision this volume serving as a desk reference for social scientists and practitioners who are seeking in-depth analysis and statistics on a given topic. We also invite elected and appointed leaders to use the indicators to help reframe debates about what constitutes growth and quality of life in a locality, state, or the nation. We expect to continue researching and updating the indicators, and we welcome participation by other research institutes and foundations in this work.


References

Council of Economic Advisors. Economic Indicators. Washington, DC: United States Government Printing Office (monthly).
Land, Kenneth. 2000. "Social Indicators." In Encyclopedia of Sociology. Edgar F. Borgatta and Rhonda V. Montgomery (eds.). Revised Edition. New York: Macmillian (forthcoming).
U.S. Working Group on Sustainable Development Indicators. 1998. Sustainable Development in the United States: An Experimental Set of Indicators. Washington, DC (December).