Economic Optimism Suffers ‘Massive Collapse’, As People’s Distrust in Government, Media Grows: Report

Economic Optimism Suffers ‘Massive Collapse’, As People’s Distrust in Government, Media Grows: Report
Thousands of Slovaks rally to protest a defense military treaty between this NATO member and the United States, in Bratislava, Slovakia, on Feb. 8, 2022. (Pavol Zachar/TASR via AP)
Naveen Athrappully

People’s optimism in their country’s economy has suffered a “massive collapse” globally, based on a worldwide survey with over 32,000 respondents across 28 countries, signifying an increase in fears of job loss and economic inflation, together with growing distrust in governments.

Global economic optimism fell to 40 percent in 2023 from 50 in 2022 and 53 in 2019, according to the 2023 Edelman Trust Barometer report. Respondents from half the countries in the survey registered a double-digit decline year-over-year when it came to believing that their families will be “better off” in five years. Among developed nations, not a single country had more than 36 percent of its respondents believing their families would fare better within the time period.

Of the 28 nations surveyed, optimism fell to all-time lows in 24 countries. In the United States, optimism was only at 30 percent, the UK at 23 percent, Germany at 15 percent, and Japan at 9 percent.

Personal economic fears like loss of income were felt by 89 percent of respondents, followed by inflation at 74 percent. When it came to societal fears, climate change topped the list at 76 percent, nuclear war at 72 percent, and food shortages at 67 percent.

“We are in a period of huge systemic change in a multi-polar world, with divisive forces fanning economic grievance,” said Dave Samson, Global Vice Chairman Corporate Affairs, Edelman, according to a Jan. 15 press release.
“If neglected, the result will be increased levels of polarization, slowing economic growth, deeper discrimination, and an inherent inability to solve problems.”

Institutional Trust, Class Divide

Government was distrusted in 16 of the 28 nations, with 42 percent distrusting it in the United States, 37 percent in the UK, 33 percent in Japan, and 20 percent in Argentina.

Media was distrusted in 15 nations, with the distrust level at 43 percent in the United States.

Among institutional leaders, CEOs were only trusted by 48 percent of respondents, followed by journalists at 47 percent, and government leaders at 41 percent. These three made up the least trusted institutional leaders. In contrast, scientists were the top trusted institutional leaders, garnering the trust of 76 percent of respondents, followed by “my coworkers” at 73 percent, and “my CEO” at 64 percent.

Businesses were found to hold a 53-point lead over the government when it came to competence. As to ethics, it held a 30-point lead.

“By a six-to-one margin, on average, respondents want more societal involvement by business on issues such as climate change, economic inequality, and workforce reskilling,” said Richard Edelman, CEO of Edelman.

“But business must tread carefully, more than half (52 percent) of our respondents do not believe business can avoid being politicized when it addresses contentious societal issues.”

A class divide in trust was also observed. The average trust in institutions rose from 50 in 2012 to 62 in the latest survey among high-income earners. Among low-income earners, this trust only rose from 43 to 48.

Business, Consumer Optimism

Several other recent surveys have also shown that optimism among businesses and consumers has dimmed in the United States.

The NFIB Small Business Optimism Index declined by 2.1 points in December, which was the 12th straight month when it remained below its 49-year average.

“Overall, small-business owners are not optimistic about 2023 as sales and business conditions are expected to deteriorate,” said Bill Dunkelberg, the NFIB’s chief economist.

“Owners are managing several economic uncertainties and persistent inflation, and they continue to make business and operational changes to compensate.”

McKinsey’s American Opportunity Survey (AOS) report published last month found that people’s view on access to economic opportunity is increasingly negative, falling from 99 in April 2022 to 85 in November 2022.

The lack of optimism was found to “cut across all income levels, genders, and ages,” with the sharpest decline seen among those aged between 25 and 34 years.

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