How do literacy rates impact the economy?

Literacy rates

How do literacy rates impact the economy?

Why are we so obsessed with the economy? It’s always at the forefront of politics and we do everything to ‘promote growth’. Thinking about things in economic terms has its merits. Gross Domestic Product, or GDP per capita, is the most widely accepted measure of the standard of living in a country. The idea is that, as GDP increases, people spend more money on the goods and services they want and need, leading to a ‘better’ life. 

This measurement is far from perfect. While GDP and standard of living correlate, what even is the standard of living? It’s different from quality of life, which relies on more subjective measurements such as happiness, and spending doesn’t always equal happiness. GDP also ignores a growing problem in many countries across the world: inequality. In the UK, the average income of the poorest fifth of the population shrank by 1.6% in 2018, while the average income of the richest fifth rose by 4.7%. GDP per capita averages everything out, hiding inequality. 

Should we get rid of the economy-first way of thinking?

In both, the Labour and Conservative party manifestos from 2017, economic principles were at the top of the list. When we think of improving people’s standard of living, well-being, or quality of life, our thoughts immediately go to ‘we need more money’. Often, more money would be helpful, but it’s not everything.

Focusing on the economy ignores other things that matter, which could, counter-intuitively, harm our economy in the long run. This includes things like the environment and education. As we put economic policies forward and give environmental concerns a lower status, we’ll reach a point where our environment can no longer support our productivity. Everything we do, and every business in the UK, depend on a stable environment. Without it, we’ll run into huge problems. 

Literacy and the economy

Another example is pushing proper education to the back of our minds in favour of austerity and funding cuts to improve our economic situation. In the UK, 25% of children leave primary school unable to read properly. This figure rises to 40% among disadvantaged children. When you start behind it’s hard to catch up, and many of these children never do, leaving school as a teenager unable to read and write properly. 

This affects future employment opportunities, well-being, health, and creates a cycle of poverty, and the children of adults who can’t read are less likely to be able to as well. If every child left primary school being able to read properly, our economy could be more than £30 billion better off by 2025. This is over £1,200 per household, simply by teaching children basic literacy. 

This affects the whole economy, but also individual businesses, with 40% of employers needing to provide basic literacy training to school and college leavers. The falling literacy rates in the UK are holding our economy back. 

Development as a freedom

For decades, our country’s main focus for development has been economic growth. Amartya Sen - an Indian, Nobel-Prize-winning economist and philosopher - came up with the view of development as freedom. He sees human development from a social point of view, challenging the mainstream concept of measuring development through economic growth. He suggests development is the freedom a person has to live a life they value, to have the capabilities to access opportunities, and to have the agency to change their own life. Levels of development depend on how well a society can allow its population to do these things.

A new mindset

Without being able to read, in the UK, young people are becoming trapped in poverty, experiencing poor health, low-skilled work, and missing out on vital opportunities more privileged members of society can access.

Maybe it’s time we put GDP to the back of our minds and instead take a fresh look at how we can become happier and more productive as a nation. Let’s grow by helping the most disadvantaged people in our society, one book at a time. 

At Coster Content, we work hard to make sure more families have the basic literacy skills needed to help them rise out of poverty and access more opportunities. We’re passionate about inspiring businesses to notice the huge literacy challenge we face. If you would like to know more, get in touch on 0161 413 8418.

Alia CosterComment