President Biden addressed Congress yesterday in his first State of the Union address. The speech, whose tagline is “building a better America,” comes as the country enters year three of the pandemic, grapples with rising inflation and faces a geopolitical confrontation with Russia.
In a show of support for Ukraine at the top of his speech, the president announced that the U.S. will close its airspace to all Russian flights and that the U.S. Department of Justice was assembling a taskforce to go after Russian oligarchs. Confronting the cost of imposing sanctions, President Biden announced that the U.S., along with 30 other countries, was releasing 60 million barrels of oil reserves, half of which will be from American reserves.
With the midterm elections on the horizon, the president focused the remainder of his speech on rallying Americans around the progress made in rebuilding the economy and highlighting legislative wins to date, including the bipartisan infrastructure bill and American Rescue Plan Act. In his speech, President Biden outlined a number of priorities that shine a spotlight on corporate America. Below are some key highlights and reputational considerations for companies and brands.
Key Takeaways & Communication Considerations
‘Made in America’ becoming a political expectation of companies: President Biden’s remarks on supporting American manufacturing were markedly similar to what his predecessor President Trump often dubbed America First. The commentary illuminates an economic consensus continuing to emerge between Democrats and Republicans which is increasingly skeptical of the impact globalization has upon the American worker and national security. Biden heaped praise upon Intel, Ford and GM for their respective commitments to manufacture chips and cars at home versus overseas. He also called upon Congress to pass the Bipartisan Innovation Act, which would support investment in emerging technologies such as AI to help the U.S. compete with China. Biden even suggested that inflation could be reduced if companies lessened their reliance on foreign supply chains. Companies planning announcements on investments overseas need to be mindful of the current tide in Washington, D.C., while those expanding at home should consider ways in which they can positively amplify their commitment to American jobs and manufacturing, along with local communities, with receptive stakeholders.
Tackling a perceived lack of competition remains an economic priority: President Biden reiterated his commonly used argument that a lack of competition within the U.S. economy is helping to drive inflation, announcing a “crackdown” on companies “overcharging” American consumers, citing industries including agriculture, healthcare and shipping. Given this line of argument will likely become a prominent Democratic talking point in the run up to the midterms, companies need to be mindful throughout the remainder of 2022 that added political scrutiny could come their way when communicating updates on business performance and cost pass throughs – as has been the case during the current earnings period. Communications teams should ensure alignment with their Investor Relations partners to understand how business updates could be perceived by a broader set of stakeholders beyond investors. Biden also announced his intention to name a chief prosecutor for pandemic fraud. Companies that sold high-demand essential goods during the pandemic should track this closely to understand the scope of the role, what constitutes fraud, and the industries that will be investigated as more specifics emerge in the coming weeks.
Legislative support for workers who seek unionization: The president reiterated his support for labor unions and urged Congress to pass the Protecting the Right to Organize (PRO) Act, a proposed bill that expands various labor protections related to employees’ rights to organize and collectively bargain in the workplace. The move comes on the heels of the COVID-19 pandemic and a workforce facing high levels of burnout and grappling with staff shortages, particularly those in frontline positions. The PRO Act would further bolster already growing grassroots unionization activity, like those recently seen by Starbucks employees in New York and Amazon employees in Alabama. Companies without unionized workforces should consider thinking through the reputational impact of navigating these activities, as well as the possible communications response scenarios if faced with attempts to vote for unionization – both with employees and external stakeholders.
Navigating hot button social issues: President Biden touched on a handful of social issues, including protecting Roe vs. Wade, advancing maternal health care, and providing all Americans, especially children, with greater access to mental health services on a parity with physical care. He also pushed for legislation and called for the advancement of the bipartisan Equality Act to protect LGBTQ+ Americans as state laws pop up targeting transgender Americans, as well as the Freedom to Vote Act, John Lewis Voting Rights Act and Disclose Act which would require greater disclosures around political contributions. Touching on police reform, the president stressed that the American Rescue Plan would help cities, states and counties hire more police and invest in proven strategies like community violence interruption. He emphasized the need to fund the police with the resources and training they need to protect communities. These societal issues have reputational implications for companies and brands as their consumer and employee base can often be divided. Whether a company/brand should take a stance and engage or avoid that specific topic is something every company will need to consider as these issues become center stage during the Midterms. Companies should be prepared to answer questions about their stance on these topics and have messaging in place to support their efforts to help protect the health and wellness of their employees, and potentially their communities as well.
Leaning on companies and big tech to tackle social media advertising and privacy: In his four-point Unity Agenda for the Nation, President Biden referenced the need to address the mental health of children and the harms of social media, urging that social media platforms be held accountable for the “national experiment they’re conducting on our children for profit.” He called for stronger privacy protections, banning targeted advertising to children, and demanded that tech companies stop collecting personal data on children. The conversation around privacy protections continues to evolve as companies amass large quantities of consumer data. The U.S.’s patchwork solutions and lack of federal regulations around privacy, unlike the EU’s GDPR, means companies are left to act on their own ethics, which puts them in the hot seat of public scrutiny. As data breaches become more and more common, companies should review their own privacy and data collection strategies as they could well find them in the court of public opinion. From a reputational risk perspective, brands that commit large advertising spend to social platforms should also be mindful of the perceived leverage they have when it comes to challenging platforms on issues such as advertising targeted at children as this becomes increasingly front of mind for parents across the country.
Ketchum’s Corporate Reputation specialty consists of cross-functional experts who have worked with multiple clients in creating and assessing plans across many of these issues. If you would like to explore developing or updating your communication preparedness plans, please contact Tamara Norman or John Bradbury to discuss how we can support you on these issues.
Contributers to this blog: John Bradbury, Jordan Campbell, Alla Shkiler and Lauren Hartung
