The Conference Board of Canada released its Metropolitan Outlook yesterday showing a 1.58% growth in Halifax’s real GDP per capita for 2011. They even predicted a higher growth rate for 2012. As an economist, that’s the sort of news I like to hear.
Some people may see 2% growth as inconsequential, but this rate of growth is amazing. Looking at the province as a whole, over the past decade and a half real GDP per capita has increased by 2.19% per year. This means that every year, above and beyond increases in prices (inflation), everyone can buy 2.19% more goods and services than they could last year. This is exponential growth and it means great things for the future.
A simple growth equation shows us that it takes approximately 33 years, growing at 2.19% for our real income per capita to double. This means Nova Scotians will have twice as much purchasing power every 33 years (in about a generation). In 66 years, we will have quadrupled our purchasing power.
Say you make a decent living; you’re taking in an annual salary of $35,000 a year. You can afford the food you need, clothes, rent, the basics, and have a little extra money to spend from time to time. Now give yourself an extra $35,000 dollars a year to throw around, with your food, clothes, and rent already paid for. That’s pretty awesome. In a generation, people will be living this dream. In two, they’ll have twice as much as the generation before it.
This is why economic growth is so important. It’s why we should be striving to do more, to push ourselves into the future just a little bit faster. We should be looking at the economy as a tool to build our future, as an engine for growth that can be finely tuned. We shouldn’t balk at 2% growth; it’s a job well done.
Economic growth leads to a better quality of life, and we are rapidly approaching an unparalleled time of prosperity. By the time I retire, I will have a quality of life that puts my parents’ to shame. It’s a lot to look forward to.
Paul Jacob is the Research Coordinator at the Greater Halifax Partnership. He is a self proclaimed nerd and academic enthusiast.