Genuine Progress Indicator

Alexander Di Franco TA Victoria Fast Geography 108 18 November 2012 The Motor city Industrial Hero to Zero The Genuine Progress Indicator (GPI) is a fantastic model to barroom the over on the whole well beingness of the economy in great detail. Opposed to the Gross Domestic harvest-tide (gross domestic product), which only takes into written report total dollar value, the GPI does just that, but also includes figures that represent the cost of the prejudicial effects related to sparing activity. It gives the important details of the economy and the state of the citizens within in it that the GDP just can non.Look at Detroit, Michigan the Motor urban center, was at one condemnation one of the nigh prosperous cities in the world, and a global industrial giant. Today, its a ghost town, non to maintain a hellhole. The collapse of the self-propelling industry from the early 2000s to the present has completely destroyed the designer global giant in every way. The precipitou s decline of the Detroit economy can be substantiated by development both the GPI and GDP method. Using academic and popular media references, these two approaches will be comp atomic number 18d using the issue of the collapse of the cable carmotive industry in the Motor City.The GPI approach represents this situation almost accurately, and is most relevant because it not only takes the financial state of Detroit into consideration it takes the environmental and well-being means of the citizens into consideration as well. The GDP does not. Through the disappearing nation, the rising rates of unemployment and poverty, and the exploding crime rate, it is clear that the be of the over every last(predicate) well being of this city are much more important than just the economic costs.The city of Detroit, Michigan was once the most prosperous, booming cities in the world, especially in the second half of the twentieth century. This was thanks to their automotive industry, the Big 3 . The Big 3 included Ford, General Motors, and Chrysler, who all have their world headquarters located in Detroit and its vicinity. During this time period, Big 3 sales had soared from 6 one thousand million units in 1950, to 17 million in 2000. To break this time period down in depth, from 1950 to 1991, the sales of the units increased by double-digit percentageages annually.In contrast to that, from 1992 to 2007, figures of annual sales rarely fluctuated by more than 3 percent per year (Klier, and Rubenstein 36). Consumers had an insatiable appetite for American vehicles manufactured by the Big 3 they were on top of the world so to speak. This surge in sales was not only bringing in great amounts of money into Detroit and its vicinity, it was bringing in great job opportunity, whether it was factory jobs or office jobs. This was rightfully the golden era for Detroit, and its populous prosperity was to be found everywhere.The statistics dont lie, stating that Detroits universe of discourse peaked at around 2 million in the 1950s (Linebaugh). During that time, it was the fifth Brobdingnagianst city in the USA only behind New York, Chicago, Philadelphia, and Los Angeles, and was in the top 10 as recently as 1990 (Linebaugh). With all going so well, it was just a matter of time before things turned for the worse. As the saying goes, all good things come to an end, and this describe Detroits ugly, disastrous transformation in a nutshell. According to CNBC, Detroit is the 3rd worst city to live in the USA, and is the most dangerous (Crowe).What was the gas pedal for this metamorphosis from prosperity to urban decay? Its quite simple their automotive giants were getting proscribed performed by foreign competitors such as Toyota, Honda, and Hyundai. One of the factors that lead to this was that the Big 3 became complacent and absolute due to the fact that they had little to no foreign competition prior to this decade. Thus they had an extremely large portion of the North American foodstuff share. Because of this arrogance and complacency, both fibre and reliability began to suffer.The foreign automakers rated consistently higher in both quality and reliability. An different was the fact that the Big 3 depended critically on selling large volumes of light trucks (minivans, SUVs, and pickups) these vehicles were their hindquartersbone (Klier, and Rubenstein 36). As gas prices began to rise, and take downtually soared, consumers were looking for more cheap alternatives, with regards to fuel-efficiency. This was one characteristic all of the Big 3s light trucks lacked. What was the alternative? Foreign-headquartered automakers (such as Toyota, Honda, Hyundai, and so forth fuel-efficient vehicles. These vehicles would cut down the time and money consumers would spend at gas pumps, which was extremely attractive. The statistics of the Big 3s production of light trucks from 2007 to 2009 do not lie. In 2007, 10. 4 million light trucks wer e produced. In 2009, this number decreased by a staggering 46% to 5. 4 million (Klier, and Rubenstein 36). The foreign automakers fuel-efficient vehicles took the market by storm in that period, and completely dominated the US automakers in the market share.This was the nail in the coffin for the city of Detroit. The one main thing that drove their economy through its history was suitable more and more irrelevant as the time passed. No one was buying American do vehicles. It got to the point where General Motors and Chrysler had to be bailed out by the government. To Detroits fairness, the economy is on its way back up today, and the automotive industry is starting to regain around ground, but the city of Detroit will neer be the same, not thus far close to what it used to be.How has this historical collapse affected the Motor City today? It begins with the population. As previously mentioned, Detroits population peaked at nearly 2 million people in the 1950s. This is the high est their population was, and ever will be. Kate Linebaugh of The Wall highroad Journal states that as of 2010, Detroits population had fallen back 100 years. The population as of that date was 713,777, the lowest it has been since 1910, 60 percent less than its peak in the 50s, and 25 percent less than it had been in 2000 (Linebaugh), which is short unbelievable.Also, Detroit is now the nineteenth largest city in the USA behind Indianapolis, and Columbus (as it used to be in the top 5, and top 10 as previously stated) (Linebaugh). The population is literally disappearing as time moves on. Along with this issue, is the skyrocketing poverty and unemployment rate. The current unemployment rate is 19. 6 percent, which is almost double the national rate, and the highest the city has even seen (Daily Mail Reporter). This number has been on a smasher rise within the past decade, and as a result has put ore and more people on the streets, being homeless. 34. 5 percent of Detroits popula tion is below the poverty line (US Census Bureau). Also, the rate of violent crimes is at 2,137 per 100,000 residents, which is the highest in the USA preceding(prenominal) St. Louis and Oakland. This statistic makes the Motor City Americas most dangerous city for the fourth year in a row (Fisher). The city is in complete ruin it seems like absolutely everything is going descending(prenominal). With all going so wrong, especially in the last decade, how on earth could the GDP of Detroit increase at all?Take a look at the numbers from the recent decade. From 2001, there is a steady increase in the GDP until 2007, until a short but steady decrease until 2009, where it goes up over again from there (BEA US Department of Commerce). This is a completely inaccurate representation of the state of Detroit overall. With the collapse of the automotive industry, which lead to all the problems previously mentioned (population diminishing, poverty and unemployment rate rising, and crime rate sky rocketing) the GDP is not an appropriate measure or representation of the Detroit economy overall.This is due to the fact that the GDP just takes into account total dollar value, and not the well being of the citizens or any environmental factors. According to the GDP, Detroit has been brining in increase amounts of money from one year to the next in some periods of this collapse, but the overall state and well being of the city and its population has been on a constant downward spiral. To truly consider and represent the real state of the Detroit, and what is really going on within the economy and the well being of its citizens, the GPI must be used.If the GPI were taken in contrast to the GDP of Detroit since 2001, it would steadily be going downhill and opposed to the fluctuating GDP, which was mostly increasing (with exception to 2007-2009). All the situations Detroit is encountering as a result of the auto industry collapse bring the GPI downward. For example, take the ci ties record high unemployment rate. In Clive Hamiltons article about the GPI, he talks about the issue of unemployment and underemployment. He says that genial costs of unemployment lead to declining levels of health, increased amounts of suicide, and increasing levels of crime. Also there are the psychological osts of unemployment, which include trauma, stress, and family breakdowns (Hamilton, 20). Therefore, unemployment is a major negative factor on the GPI. Also, Hamilton talks about defensive expenditures, saying that GDP counts them as additions to output, however GPI deducts them, because they are undertaken to offset some decline in tender welfare (Hamilton, 16). For example, this means that the record-high crime levels in Detroit create additions to the GDP because there would be a need for more police, more medical staff, and things would need to be repaired. On the other hand, the crime would deduct the GPI.This is because the cost of more police, medical staff, and rep airs are undertaken to offset the decline in social welfare that crime causes. Lastly, the diminishing population of Detroit is a no brainer as a deductive quality of the GPI. Clearly people want to leave, or avoid living in the city of Detroit in this era. The social welfare of the citizens is at an extreme low. It is clear that the GDP cannot represent the economic state of an area in nearly as much detail as the GPI can. This is why in my opinion the GDP is not relevant in terms of an indicator of an economys overall well-being.I strongly believe that the GPI gives a more accurate representation of the overall state of the economy thus should be used as the primary economic measure rather than the GDP. Detroits GDP was on the rise for most of this decade, even through the historical collapse of its worldwide automotive industry. However, it is clear that the welfare of its citizens and the state of the city are and will continue to be at a devastating low. This is made clear thro ugh Detroits disappearing population, the rise of unemployment and poverty rates, and the skyrocketing crime rate.With all of these factors considered in the GPI, as well as dollar value, the GPI ultimately triumphs over GDP and gives people a true assessment of an economy overall, that the GDP simply fails to do. Works Cited Klier, Thomas H. , and James Rubenstein. Economic Perspectives. Economic Perspectives. Q II (2012) 35-54. Web. 11 Nov. 2012. Linebaugh, Kate. Detroits Population Crashes. Wall Street Journal 23 3 2011, n. pag. Web. 13 Nov. 2012.