Rising income inequality is undermining confidence in capitalism around the world, according to a survey conducted by public relations firm Edelman ahead of the gathering of business and political leaders in Davos, Switzerland.
Among those surveyed in the report published yesterday, 56 percent thought that capitalism was doing more harm than good, despite another year of solid economic growth and near-full employment in many developed nations.
The stark finding could cause a stir among the business executives and political leaders as they make their way to the annual meeting of the World Economic Forum.
“We are living in a trust paradox,” said Richard Edelman, the CEO of Edelman, which has been conducting its survey of trust for 20 years.
“Since we began measuring trust, economic growth has fostered rising trust,” he said.
Although that relationship between economic growth and faith in the system remains in developing areas such as the Middle East and Asia, the survey found that rising inequality in many rich countries has contributed to a weakening in trust in capitalism.
“Fears are stifling hope, and long-held assumptions about hard work leading to upward mobility are now invalid,” Edelman said.
Corruption, corporate misbehavior and fake news are eroding trust, he said, as are fears over automation in the workplace, a lack of training, immigration and the gig economy.
The survey showed that 83 percent of employees globally were concerned about their jobs.
Business and non-governmental organizations are the institutions that people most trust to deal with global issues, a blow to governments riven by populist and partisan politics, it showed.
Climate issues are among the most important, and business leaders can no longer brush aside consumer concerns as brands can be quickly tarnished if they are deemed to be unethical, it said.
“There is a growing risk of brands getting sucked in and CEOs have a mandate from customers and employees to act,” Edelman said.
The survey involved 30-minute online interviews in 28 countries from Oct. 19 to Nov. 18 with more than 34,000 people worldwide.
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