2.3: Economic Benefits When Businesses Earn Profits

Standard of Living

Successful businesses help to raise a country’s standard of living because they create the goods and services that are the basis of our standard of living. The standard of living of any country is measured by the output of goods and services people can buy with the money they have. It’s the ease with which people living in a time or place are able to satisfy their needs and wants. It is generally measured by standards such as income per person and poverty rate. Other measures are also used, such as access to and quality of health care, income-growth inequity, availability of employment, environmental quality, and educational standards. One measure of the standard of living is the Human Development Index (HDI), which was developed by the United Nations. Canada was ranked #18 out of 193 countries and territories worldwide on the 2023/2024 HDI report  (Refer to Table 2.1).^[1]

Quality of Life

Businesses play a key role in determining our quality of life by providing jobs, goods, and services to society. Quality of life refers to the general level of human happiness based on factors including life expectancy, educational standards, health, sanitation, and leisure time. It takes into account not only the material standard of living, but also more intangible aspects that make up human life. Building a high quality of life is a combined effort between businesses, government, and not-for-profit organizations. In a Mercer Insights report for 2023, Vienna, Austria, ranked highest in quality of life, followed by Zurich, Switzerland; Auckland, New Zealand; and Copenhagen, Denmark. It may come as a surprise that not one of the world’s top cities is in the United States: seven of the top 10 locations are in western Europe, two are in Australia/New Zealand, and one is in Canada (#8 on the list). At the other end of the scale, Baghdad, Iraq, is the city scoring the lowest on the annual survey.^[2]