Rising inequalities erode trust in capitalism – survey

DAVOS, Switzerland – Rising income inequality is undermining confidence in capitalism around the world, according to a survey conducted by public relations firm Edelman ahead of the elite rally in the Swiss ski resort of Davos.

Of those polled in the report released on Monday, 56% believed capitalism was doing more harm than good despite another year of solid economic growth and near-full employment in many developed countries.

This brutal finding could cause a sensation among business and political leaders as they head to the annual meeting of the World Economic Forum.

“We live in a trust paradox,” said Richard Edelman, CEO of Edelman, who has been conducting his trust survey for 20 years. “Since we started measuring confidence, economic growth has fostered growing confidence. “

While this relationship between economic growth and faith in the system remains in developing regions such as the Middle East and Asia, the survey found that rising inequalities in many wealthy countries have contributed to a weakening of confidence in capitalism.

“Fears are stifling hope and long-held assumptions about hard work leading to upward mobility are now invalid,” said Edelman.

Corruption, business misbehavior and fake news erodes trust, Edelman said, as do fears about automation in the workplace, lack of training, immigration and the odd-job economy. According to the survey, 83% of employees worldwide are concerned about their jobs.

Businesses and NGOs are the institutions people trust most to deal with global issues, a blow to governments torn by populist and partisan politics.

Climate issues are among the most important and business leaders can no longer ignore consumer concerns, as brands can quickly be tarnished if found to be unethical.

“There is a growing risk that brands will be sucked in and CEOs have a mandate to act from customers and employees,” said Edelman.

Most recently, BlackRock CEO Laurence Fink said his company, which manages some $ 7 trillion for investors, will put climate change and sustainability at the heart of its approach to investing. And Credit Suisse, following a protest against its activities at a branch in Switzerland, said it would stop investing in new coal-fired power plants.

Consumer goods giant Unilever, the maker of Sure deodorants or Comfort softeners, has pledged to cut its use of virgin plastic in half by 2025.

“Businesses are a catalyst for change,” said Edelman.

The survey involved 30-minute online interviews in 28 countries between October 19 and November 18 with more than 34,000 people worldwide.

Pan Pylas, The Associated Press

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