Social Costs of Economic Activity
(2012 $)
Social Costs of Economic Activity
Cost of Homelessness
Costs of Underemployment
Cost of Crime
Cost of Commuting
Cost of Vehicle Accidents
What are we measuring?
There are very real costs of our economy and society functioning in its
current form, some of which are unavoidable but could potentially be lessened
through governmental or behavioral change. These costs include homelessness,
un-and-under-employment, crime, commuting, and motor vehicle
accidents.
Trends 2012-2019
In total the social costs of economic activity increased by $1.62 billion (4.5%) from 2012 to 2019. This was largely driven by increasing costs of commuting and crime (although crime costs did fall from 2017 to 2018 and only slightly increased from 2018 to 2019. We did see falling costs of underemployment, which decreased by 34%, nearly $4 billion, from 2012-2019 and fell by nearly 10% from 2018 to 2019.
- Unemployment/Underemployment
Social costs of underemployment saw a 34% decrease from 2012 to 2019. A few factors that led to this decline can be found at both the policy and organizational level. EARN Maryland, a state funded organization which bridges Maryland’s skills gap, as well as policies initiated by Governor Hogan that aided in the creation of 62,800 jobs in the private sector during 2015, both contributed to lowering the social costs of underemployment.
- Cost of Crime
Social costs of crime saw a 4.5% increase from 2018 to 2019. The change in the number of murders between 2018 and 2019 was the most significant factor in raising the cost of crime, with there having been 54 additional murders from 2018 to 2019.
- Vehicle Accidents
Social costs of vehicle accidents saw a 20% increase from 2012 to 2019. This change was caused by increases in the number of fatal crashes and injuries caused by motor vehicle accidents, although these numbers have held relatively steady over the past four years.
Calculation
The methodology for calculating social costs was largely maintained from GPI
1.0, with the addition of the costs of homelessness. The number of homeless in
Maryland is from the State of Homelessness in America report from the Alliance
to End Homeless non-profit organization. The cost of homelessness was estimated
from several
reports to conservatively be $40,000 per year per homeless person. Please
see the following GPI 1.0 pages for descriptions of underemployment, crime, commuting, and motor vehicle accidents, all of which have the same methodology in 2.0 as was used in 1.0.
