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Trust is Everything When Saving America
Family businesses may have to save America. Let me explain.
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Not so long ago, a more innocent time, we trusted the future would be brighter than the past. The world was not without trouble, but the idea of trusting in our future was rock solid.
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This is no more. Trust in the future has collapsed.
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It’s not me saying this, it comes from a recent worldwide research study, the 2023 Edelman Trust Barometer survey of some 32,000 respondents in 28 countries.
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It asks: Will you be better off five years from now?
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Only 40 percent of Americans say they will be, down a frightening 13 percentage points from 2019, according to the survey. This is considered a collapse in trust.
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It’s not just in the America. Some 24 countries are seeing all-time lows in economic optimism.
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Why has trust taken such dark turn?
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Two key factors drive distrust, according to the report. They are incompetent and unethical governments and polarizing media echo chambers.
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Today, according to the report, business and business leaders are seen as the only competent and ethical bodies of trust. In fact, US trust in business has jumped six percentage points since 2022 and worldwide employer trust levels are at 78%, while government and media are trusted at 50%.
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Business is now being asked to step into the “trust void” left by government and magnified by media.
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You say, “Come on, really, is it that bad out there?”
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When the Edelman researchers asked about personal economic fears, loss of job (89%) and inflation (74%) ranked at the top.
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When asked about societal fears, the top worries were climate change (76%), nuclear war (72%), food shortages (67%), and energy shortages (66%).
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The combination of economic and societal fears is the double whammy driving trust into the ground. This is where family businesses save America.
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Business appears to be the single bright light of faith out there. And family businesses, to be specific, are the most trusted of all businesses, the report says.
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When asked if their employer “could be trusted to do what is right,” family businesses scored highest, with 67% trusting family businesses to do right.
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Privately-held business were next, but nearly ten points (58%) lower. Publicly traded (55%) and government-owned businesses (50%) ranked lowest in the trust department.
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Recently, I posed this question to Bill Rock, CEO of MLR Media, publishers of Family Business Magazine, and he had any interesting take on the subject.
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“Family businesses know how to balance purpose with profit,” Bill said. “Long-term values, value-driven principles, community giving, fair wages, supporting stakeholders, these are all in the DNA of a family business,” he added. “Family businesses are a brand of capitalism that is really the model for the future.”
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I think he is right, but it will be no easy task changing the trajectory of things.
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In the U.S., pessimism and polarization are even more apparent along political lines, the study shows.
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Republicans (50%) say our differences are entrenched and polarization is insurmountable, while Democrats have a substantially less dire view of the future. Only 33% of Democrats say things are un-fixable.
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But what about those big pesky societal fears, like climate change and food shortages and energy costs? How do family businesses address those mega issues? Stay away? Double down?
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The research shows people want businesses to engage even more in these large societal changing issues, not less.
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In fact, “more climate change engagement” by business ranks at the top of the list, with 53% saying businesses are not doing enough.
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When it comes to economic engagement, the research says CEOs are obliged to pay a fair wage (84% of respondents), pay fair taxes (78%), and retrain employees (78%).
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Our annual research confirms family businesses lead the way in all these categories. They are engaged. They are leading the way. They are balancing purpose with profit for the long-term, pay above average wages, give to the community, and retain and retrain employees. These are the reasons family businesses are more trusted.
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So, perhaps we are at an inflection point. Maybe family businesses are going to have to step up even more and show America the way to a brighter future.
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It’s time for our government leaders to see this too. Through our Congressional Family Business Caucus, our legislators can now hear, see, and understand the power of family businesses. Afterall, government leadership ranks lowest in trust, and trust is everything when it comes to leadership.
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Family businesses have the opportunity to turn feelings around about our collective futures, and maybe in the process save America.
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Pat Soldano is president of Family Enterprise USA and Policy and Taxation Group. Both organizations are fighting for families and family businesses by reducing or eliminating unnecessary taxes and government regulation.
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Policy and Taxation Group is the Voice for Family Offices and Successful Individuals in Washington, DC focused exclusively on the critical tax and economic policies that impact them. Since 1995, PATG has been the leading advocacy group working to reduce and eliminate estate tax, gift tax, and generation skipping transfer tax while blocking increased income tax and capital gains taxes, the creation of a wealth tax, and other hostile tax policies that punish hardworking taxpayers and success.
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