Social Costs of Economic Activity

(billions 2012 $)

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 2012-2022

In total the social costs of economic activity decreased by $3.44 billion (11%) from 2012 to 2022. This was largely driven by falling costs of underemployment (6.5 billion), with a minor contribution from falling cost of vehicle accidents (19.4%, or 0.4 billion) and homelessness (25%, or 0.09 billion). Cost of crime increased by 60% over this period, although it fell by 50% in 2021, reflecting the COVID pandemic. The cost of commuting fell in 2020 and 2021 but recovered to prior levels in 2022 and had an overall increase of 18% over the 10 year period.

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.