Household wealth optimism has fallen, Edelman’s global survey shows

DAVOS - Barely two in five people believe their families will be better off in the future, according to a regular global survey that also identified growing levels of distrust in institutions among low-income households.

The Edelman Trust Barometer, which for more than two decades has polled the attitudes of thousands of people, found that economic pessimism was at its highest in some of the world’s top economies such as the United States, Britain, Germany and Japan.

It further confirmed how societies have been divided by the impacts of the Covid-19 pandemic and inflation. Higher-income households still broadly trust institutions such as government, business, media and non-governmental organisations. But alienation is rife among low-income groups.

“This has really shown the mass class divide again,” said Mr Richard Edelman, whose Edelman communications group published the survey of more than 32,000 respondents in 28 countries interviewed from Nov 1 to Nov 28, 2022. “We saw it in the pandemic because of differential outcomes in terms of health, now we see it in terms of the impact of inflation.”

The World Health Organisation and others have noted the higher toll of the pandemic on the poor, with those on low incomes suffering most from costlier basic items.

Globally, only 40 per cent agreed with the statement “my family and I will be better off in five years” against 50 per cent a year before, with advanced economies most downbeat: the US (36 per cent), Britain (23 per cent), Germany (15 per cent) and Japan (9 per cent).

Fast-growing economies saw much higher scores, with only China bucking the trend with a 1 percentage point rise to 65 per cent despite the economic disruption caused by its now-relaxed zero-Covid policies.

Such anxieties reflect deep uncertainty about the state of the global economy as the Ukraine war continues and central banks hike their lending rates to tame inflation. The World Bank has warned of a recession in 2023, while a World Economic Forum survey shows two-thirds of private and public sector chief economists expect a global recession.

While Edelman’s longstanding Trust Index posted an average 63 per cent trust level in key institutions among high-income US respondents, that figure fell to just 40 per cent among low-income groups. Similar income-based divergences were present in Saudi Arabia, China, Japan and the United Arab Emirates.

In some, that hinted at outright polarisation, with high levels of respondents agreeing with the statement “I see deep divisions, and I don’t think we’ll ever get past them” in countries as different as Argentina, the US, South Africa, Spain, Sweden and Colombia.

While such attitudes reflect current events, the ebbing of trust in government in particular has been a key theme of the survey for several years, with trust levels this year sharply lower than the relatively healthy ones scored by business.

Mr Edelman attributed that to positive perceptions of company furlough schemes during the pandemic, applause for company moves to exit Russia over the Ukraine war, and a sense that companies have started to up their games on diversity and inclusion.

He said respondents by a six-to-one margin wanted business to engage more on issues from reskilling to climate change and suggested this should encourage them to brush off accusations such as the “woke capitalism” charge voiced by US Republicans.

“I think our data gives a lot of ammunition to the CEOs who have recognised that business has to be an important force in societal issues,” said Mr Edelman. REUTERS