Of course, this adjustment still doesn't begin to deal with land use issues or the additional infrastructure costs related to a mobile, and sprawling, population. But despite the fact that environmental cleanup costs are separately tabulated in the GDP, they have not received significant attention from policymakers or economists concerned with growth. Two other measures stand out in sharp contrast to our inability to measure the damage done to natural capital. The first is the computation of the unemployment rate following the Great Depression. The second measure on which we focus a great deal is the level of personal income.
Income makes possible consumption of goods and services, and thereby a higher standard of living.
We are all aware that only goods and services produced in the market are measured in the national accounts. We know that leisure and household production are both omitted. We know that more of each of these is generally sacrificed in order to gain more income and market goods. Households actually provide more total hours of market labor today than they did several generations ago due to more two-worker families. While it is true that much of this increase in market labor time is offset by fewer hours of household production it is still quite interesting that large increases in affluence have not led to a demand for more leisure time.