People sometimes ask us for help with using economic data for managing coastal areas, especially to tell compelling stories about why people should care about things like coastal resiliency. What they are often looking for is the BIG NUMBER that will make sense of everything. What are these big numbers, you ask? Ever heard a report on the TV or radio where they tell you THE number that tells us how our economy is doing? Depending on the day, these numbers seem to be coming from completely different places. One day it’s housing, the next it’s jobs, and on Thursday it’s Gross Domestic Product (GDP). These numbers are big and impressive, but what do they mean? Well, not that much by themselves. Let’s take a closer look.
What’s In an Indicator?
First off, what are indicators? Imagine someone goes to the doctor’s office. When the nurse takes them in, the first thing they always do is record their height, weight, and blood pressure. These are general indicators of a person’s health. Employment, wages, and GDP are all common economic indicators that tell us something about the economy’s health. When the doctor takes a look at the chart, however, he doesn’t just look at one of the measures by itself, he looks at them in conjunction with the others. For example, seeing that a person weighs 130 lbs doesn’t mean a whole lot unless you know that the person is male, 5ft 6in and 16 years old. Economic indicators work the same way. Like the doctor’s office scenario, one indicator, by itself, doesn’t tell you much. But a few indicators considered in light of one another and, voilà! –the picture gets a lot clearer. Let’s look at an example.
How Much Is That Job Worth?
It seems like, nowadays, everyone wants to know about jobs. But not all jobs are created equal. While some economic sectors tend to add a lot of jobs, they do not necessarily pay wages high enough for people to support their families. In a coastal setting, this is a common occurrence in the tourism and recreation sector. In 2010, there were almost 2 million tourism and recreation jobs in shore-adjacent zip codes, but those jobs only averaged around $21,000 in wages for the year. Other sectors dependent on the oceans and Great Lakes had much lower numbers of jobs, but much higher wages.
Did You Get Everything?
Sometimes, the job reports don’t cover all the jobs either. One of the most trusted sources of employment statistics come from the Bureau of Labor Statistics’ Quarterly Census of Employment and Wages, which shows that in 2010, 128 million people had jobs. These data cover people that work for someone else, but not people who are self-employed. To find that number, you’ll have to look at the Census Bureau’s Nonemployer Statistics. In 2010, that value for the U.S. was around 22 million self-employed people, or almost 15% of the workforce. Looking at these two values together can give you a more complete picture of the jobs market. Self-employed workers are even more important in specific types of jobs. In the living resources sector of the ocean and Great Lakes economy, almost 50% of the people are self-employed!
Communicating the information found from these indicators can be tough. Big numbers can get people’s attention, but they can lead people to incorrect conclusions if they are not used correctly. For example, you could state that in 2010, 52% of the U.S. population lived along the coast. This value is correct…when discussing coastal watershed counties (there are 769 of them). However, when discussing people most likely at risk from coastal hazards, it would be more correct to use only the coastal shoreline counties (39% of the population). The take-home message here is to use the right measure the right way.
Get Your Econ On
In short, using economic information isn’t that difficult if you follow these simple rules:
- Find what economic indicators help tell your story
- Identify the limitations of an indicator, and see if other datasets can help fill in the gaps
- Look at indicators together and see if they provide further context
- When communicating the information, be specific about what it means and what it is meant to be used for
- Remember that no single number will answer all of your questions…but it will get you started!