Economic wellness is often an indication of the overall well-being of a nation or area. So GDP is a rough measure of overall well-being, but is certainly very limited. For example, the income obtained from the output produced may be going only to a select few individuals creating a highly stratified society where the top live well but the bottom do not. GDP may be doing well, but it isn't spread out over the entire population. In these instances, it is not even enough to look at GDP per capita because it is not equitably shared.
Over the past few decades there has been an increase in perceived economic wellness and standard of living because of the increases in indicators like GDP. But wages for the bottom half of our population haven't grown at all in over 30 years. All the gains made in income have gone to the top.
Change in real hourly wages for Men from 1973-2004
Number in poverty and poverty rate 1959-2009
True economic and social progress cannot occur without equitable and fair distribution of wealth. Until that happens, GDP doesn't matter.
From the Compendium of the Social Doctrine of the Church:
The economic well-being of a country is not measured exclusively by the quantity of goods it produces but also by taking into account the manner in which they are produced and the level of equity in the distribution of income, which should allow everyone access to what is necessary for their personal development and perfection. An equitable distribution of income is to be sought on the basis of criteria not merely of commutative justice but also of social justice that is, considering, beyond the objective value of the work rendered, the human dignity of the subjects who perform it.
Authentic economic well-being is pursued also by means of suitable social policies for the redistribution of income which, taking general conditions into account, look at merit as well as at the need of each citizen.
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