Australians are worried about the future as inequality takes hold
22 January 2020 at 5:04 pm
Many people are pessimistic about their economic prospects
Only a third of Australians believe their families will be better off in five years time, according to new research showing declining trust in institutions.
The latest global Edelman Trust Barometer found that 83 per cent of people feared losing their jobs due to factors such as automation, a looming recession and the gig economy.
In Australia, 53 per cent of people said they feared being left behind while only 32 per cent were optimistic their lives would improve in the coming years.
This research follows recent findings from Oxfam that showed Australia’s richest 1 per cent now have more than double the wealth of the nation’s entire bottom 50 per cent.
Richard Edelman, the CEO of Edelman, said we were living in a “trust paradox”.
“Since we began measuring trust 20 years ago, economic growth has fostered rising trust. This continues in Asia and the Middle East but not in developed markets, where national income inequality is now the more important factor,” Edelman said.
“Fears are stifling hope, and long-held assumptions about hard work leading to upward mobility are now invalid.”
Australia’s score for the Trust Index – the average per cent of trust in NGOs, business, government and media – dropped one point from last year to 47, which was lower than the global average score of 54.
While trust in NGOs increased in 16 of 26 markets with an average score of 58, Australia’s trust in the sector fell from 56 to 54.
NGOs were still the most trusted institution in Australia however, recording higher scores than business (52), government (44) and media (39).
This mimics the findings of Swinburne’s Australian Leadership Index, which found that charities were the nation’s highest-rated institution.
The trust barometer, which surveyed more than 34,000 people in 28 countries, also found that the public strongly supported businesses taking action on social issues.
More than nine in 10 respondents said it was important their employer’s CEO spoke out on issues such as income inequality and climate change.
Almost three quarters of people (73 per cent) believe a company can take actions that both increase profits and improve conditions in the communities it operates in.
The business community has already taken heed of this message. More than 180 chief executives from the Business Roundtable – which represents the CEOs of America’s leading companies – signed a new Statement on the Purpose of a Corporation last September.
While previous statements prioritised the needs of shareholders above all else, this new iteration commits CEOs to lead their companies for the benefit of customers, employees, suppliers and communities as well.
Edelman said business has “leapt into the void left by populist and partisan government”.
“It can no longer be business as usual, with an exclusive focus on shareholder returns,” he said.
“With 73 per cent of employees saying they want the opportunity to change society, and nearly two-thirds of consumers identifying themselves as belief-driven buyers, CEOs understand that their mandate has changed.”
Edelman has also updated the way it measures trust this year.
“People’s expectations of institutions have led us to evolve our model for measuring trust,” Edelman said.
“Trust today is granted on two distinct attributes: competence (delivering on promises) and ethical behavior (doing the right thing and working to improve society). It is no longer only a matter of what you do – it’s also how you do it.”
This year’s results showed none of the four institutions were seen as both competent and ethical.
Business was seen as the most competent institution, but was rated unethical, while NGOs were seen as the most ethical group but recorded a negative score for competence.
The full report can be seen here.