“It’s hard to know whom you can trust anymore—at least that’s the attitude of many Americans today. Therein lies a crucial challenge for the world’s largest economy,” writes Betsey Stevenson in “Want to Help the Economy? Learn to Trust,” published on July 5 in Bloomberg View.
“Five years ago, Justin Wolfers and I examined data showing that trust in institutions such as Congress, banks and big business had plummeted during the recession, hitting an all-time low,” she writes. “Because historically trust had fallen as unemployment rose, we argued that it would increase as unemployment declined. We were wrong.”
Stevenson goes on to explain why trust is “essential to the economy,” which populations trust least, and how we can begin to rebuild trust by addressing key policy challenges including segregation and income inequality.
“Companies need to revive training programs that create accessible career paths for more of their workers,” she writes. “Policy makers must provide new ideas for restoring greater equality and wage growth for the median worker—and devote a lot more resources to programs such as early childhood education and care, paid family leave, mid-career training and income supplements for the working poor.”
Betsey Stevenson (@BetseyStevenson) is an associate professor of public policy and economics at the Gerald R. Ford School of Public Policy. She served as an appointed member of the White House Council of Economic Advisers (2013-2015) and as chief economist of the U.S. Department of Labor (2010-2011).