Religion and the U.S. Economy

Economist Steve Horwitz once made the point, “Critics of markets sometimes say “you can’t eat GDP.” What they miss is that you can’t eat, or learn to read, or go to school, or leave a bad marriage, or do pretty much any of the basics that we might see as required for a flourishing life without the wealth and time created by the market economy.” This is why I tend to focus on economic growth: it is growth that lifts people out of poverty. This is why I’m happy to report that religion, according to a new study, is good for the economy.1 As reported in Christianity Today,

Specifically, religion is a $378 billion to $4.8 trillion boost to the US economy, the Grims found. Even at the lowest estimate, religious organizations make more than the global revenue of Apple and Microsoft combined; at the high end, religion makes the roughly the same amount as a third of the United States GDP.

The researchers’ first estimate only takes into account “the revenues of faith-based organizations falling into several sectors: education, healthcare, local congregational activities, charities, media, and food.” The largest chunk of these–healthcare–raises about $161 billion a year. Congregations raise $84 billion a year, religious schools raise $74 billion, and religious charities bring in $45 billion. Furthermore, the money is increasingly spent on social services like food assistance, parenting classes, and drug and alcohol abuse recovery programs ($9 billion in 2012).

“Their second estimate—that religion has an economic value of $1.2 trillion—adds in the price of social services provided by congregations,” the article continues.

Churches sponsor more than 1.6 million social services programs in America each year, and provide 7.6 million volunteers. More than 9 in 10 congregations actively recruit volunteers for outside projects (93%), half allow their building to be used for non-congregational purposes (50%), and close to half have groups that think about how to meet community needs (48%).

The Grims also added in the halo effect a community receives from the benefits of having a church nearby: it encourages investment in family and children; stimulates the local economy by buying goods and services; provides a place to host weddings, funerals, or large community events; may run schools or day cares; provides outdoor space for leisure activities; and augments the city’s social services.

The result: $418.9 [billion] worth of value.

When religious businesses are considered, the estimate is $1.2 trillion. “The study wasn’t perfect, the Grims admitted. It didn’t add in any of the financial or physical assets of religious groups, or subtract any negative impacts of religious groups, like fraud or abuse of children by clergy…Still, they wrote, “the data are clear.””

Glad to see religion making a big impact in the real world.