Sunday, August 9, 2020
A Pandemic Side Effect: Permanent Job Losses
More jobs are disappearing for good, dashing hopes of a rapid economic rebound.
August 7, 2020 Megan Cassella POLITICO
https://portside.org/2020-08-07/pandemic-side-effect-permanent-job-losses
Tens of millions of Americans have lost their jobs in the coronavirus recession, but for many of them the news is getting even worse: Their positions are going away forever.
Permanent losses have so far made up only a fraction of the jobs that have vanished since states began shutting down their economies in March, with the vast majority of unemployed workers classified as on temporary layoff. But those numbers are steadily increasing — reaching 2.9 million in June — as companies start to move from temporary layoffs to permanent cuts. The number is widely expected to rise further when the Labor Department reports July data on Friday.
Workers themselves are growing increasingly pessimistic as the permanent losses spread beyond the service industry to occupations like paralegals and financial analysts who weren’t initially affected by the shutdowns. Nearly half of American families whose households have seen a layoff now believe that job is probably or definitely not coming back, an AP-NORC poll found late last month. That marks a steep drop from the April survey, which showed nearly four in five respondents expecting their job loss to be temporary.
The rise in permanent job loss is the latest signal that the economic damage from the coronavirus is likely to be long-lasting, and that the Trump administration’s dream of a quick, V-shaped recovery is at odds with what workers are seeing across the country. That could create the need for even more government spending and long-term solutions beyond the temporary fixes that Congress has been debating.
“This recession has been really confused, because what we had was really a suppression where we told everybody to stay home — and that wasn’t really job loss,” said Betsey Stevenson, a former chief economist at the Labor Department and a member of the Council of Economic Advisers during the Obama administration. “The real question is, when you end the suppression, how many jobs are left? And boy, it sure looks like we lost a whole lot of jobs.”
Permanent layoffs have already begun spreading beyond industries directly affected by the pandemic. Nick Bunker, the director of economic research with the Indeed Hiring Lab, found that while permanent losses were concentrated in April in service-sector occupations that have been the hardest hit — waiters and retail salespersons, for example — they had spread by June throughout the labor market.
The trend appears poised to get worse. The number of Americans applying for unemployment aid has risen in recent weeks after months of steady decline, as the coronavirus surges across much of the country and a majority of states have either paused or reversed reopening plans. Another 1.2 million workers filed a new unemployment claim last week, the Labor Department reported on Thursday, marking the 20th consecutive week that applications have risen above 1 million. More than 32 million people are receiving either state or federal unemployment benefits, according to the most recent data.
Layoffs taking place now are more likely to be permanent rather than a temporary furlough. A Goldman Sachs analysis from July 31 found that 83 percent of job losses since February had been deemed temporary. But of all new layoffs in July in California, which it used as an example, only 35 percent were temporary.
“What’s happening now is more companies that thought they could survive are giving up,” said Nicholas Bloom, an economics professor at Stanford. “The most painful time to lose your job may well be coming up.”
The permanent losses hold greater weight than temporary layoffs, economists say, because they are far more likely to lead to long-term unemployment that would prolong any economic recovery. While a furloughed worker is likely to get his or her job back as soon as consumer behavior returns to normal, a permanently laid-off worker has to wait for an employer to create a new job, then apply and get matched with the right one.
“That’s what recessions are made of — that’s why they are so costly. That’s why they take so long to clean up,” said Adam Ozimek, chief economist at Upwork, a platform that connects businesses with freelancers.
Workers who remain unemployed over the long term end up increasingly less likely to return to the labor market for a number of reasons: Their skills may erode; they may lose motivation or employers may discriminate against them, Bloom said. Even after returning to the labor market, they could see effects like lower pay that linger throughout their careers.
“The reason that’s important from a macro perspective is, if you have this army of long-term unemployed, it becomes almost impossible to have a rapid rebound,” said Bloom, who co-authored a study in May that found that 42 percent of recent layoffs were likely to become permanent.
Economists argue the growing trend toward permanent job losses highlights a need for further federal spending to support laid-off workers, to keep consumer spending close to normal levels and to help small- and medium-size firms in particular weather the shutdowns.
Without more aid, business closures are likely only to increase, in turn keeping unemployment high. A recent Goldman Sachs survey found that 84 percent of business owners who had received loans under the Paycheck Protection Program said they would exhaust the funding by this week. And only one in six reported being “very confident” they would be able to maintain their payroll without further aid.
As more businesses close, it also becomes harder to restart the economy once consumer demand does start to return because there are fewer places for people to spend their money.
Even when consumers want to go out to eat or travel again, “That’s going to take a long time to turn into job benefits if you’ve had massive amounts of small business closures there,” Ozimek said.
Regardless of whether the July data shows the headline unemployment rate rising or falling for the month, the share of permanently unemployed workers is likely to continue to rise, complicating the administration’s touting of what President Donald Trump has previously called a “rocket-ship” economic recovery. And it underscores that even if states begin to reopen their doors in the near future, any return to normal for the labor market is likely years away.
“So are we moving in the right direction? I think not,” said Stevenson, now a professor at the University of Michigan. “I think most people went home from work in March, April or May and thought, ‘Surely they’re going to bring me back to work.’ And what’s happened is fewer of them were brought back than were expecting it.”
Susan Rice’s Considerable Past Fossil Fuel Investments
One of the finalists in Joe Biden’s “veepstakes” is a longtime investor in fossil fuels, financial disclosures reveal.
Walker Bragman
Aug 7
This report was written by Walker Bragman.
Former National Security Adviser Susan Rice, reportedly one of two finalists in Joe Biden’s vice presidential search, had millions invested in fossil fuels and energy companies as recently as 2015. The revelations come as Biden has faced renewed questions about his commitment to environmental policies that would combat climate change.
A financial disclosure form obtained by TMI reveals that Rice had investments in at least five such companies, including as much as $100,000 in TransCanada, which is behind the controversial Keystone XL pipeline. Rice also had over $1 million invested in pipeline firm Enbridge as well as more than $2 million split between fossil fuel companies Cenovus, Encana, and Imperial Oil -- all companies with significant involvement in developing the tar sands of Alberta. The investments netted as much as $237,000 in dividends that year.
In addition, Rice reported significant holdings in Canadian banks which fund pipeline projects, according to the disclosure.
A veteran of multiple Democratic administrations, Rice has a traditionally impressive resume on paper. She worked as a consultant for McKinsey & Co. before serving as Assistant Secretary of State for African Affairs under Bill Clinton, UN Ambassador under Barack Obama and National Security Adviser. But her record has made her a controversial candidate for VP. Pledged delegates for Vermont Sen. Bernie Sanders have urged Biden to avoid naming her to the ticket, and have also urged him to remove a number of other foreign policy hawks from his team. Among other things, the delegates cited her past support for military intervention in Iraq, Libya, and Syria.
On Friday, environmental advocates criticized Rice’s past fossil fuel investments in a Politico report. In 2012, when Rice was a candidate to succeed Hillary Clinton as Secretary of State, environmentalists took aim at her for the holdings, even circulating a petition urging Obama not to select her.
Even then, Rice, whose net worth with her husband was estimated to be between $23.5 million and $43.5 million, had significant investments in Canadian energy interests, including as much as $600,000 in TransCanada. She also owned stock in Enbridge, Encana, Cenovus, and Suncor, along with other fossil fuel companies like Chesapeake Energy, Devon Energy, Royal Dutch Shell, Iberdrola, ATP Oil & Gas Corp., and energy utility TransAlta.
Rice would hardly be the first person with fossil fuel ties that Biden has brought onboard this cycle. Biden’s climate adviser, Heather Zichal, previously served on the board of a natural gas company, Cheniere Energy. One of his fundraisers, Andrew Goldman, co-founded a liquid natural gas company. Meanwhile, his national co-campaign chair, Louisiana Rep. Cedric Richmond, is a vocally pro fossil fuel Democrat. Topping the list, however, is fossil fuel lawyer and former Interior Secretary Ken Salazar, who Biden tapped to help with his Latino outreach.
Throughout the election cycle, Biden has attempted to thread a difficult needle, maintaining support from his big donors while assuaging the doubts of his party’s left flank -- particularly on the issue of climate change.
During the primary, the former VP promised no new fracking on multiple occasions despite releasing a climate plan in June 2019 containing language explicitly allowing for “new oil and gas operations.” After the primary, Biden was quick to establish a policy task force with his former rival Sen. Bernie Sanders which led to him making a number of concessions on his climate plan.
But early last month, Biden walked back his previous statements on fracking, telling an interviewer that “fracking is not going to be on the chopping block.”
Saturday, August 8, 2020
The United Auto Workers: A criminal conspiracy against the working class
https://www.wsws.org/en/articles/2020/08/07/pers-a07.html
7 August 2020
On Monday, General Motors submitted court documents showing that Fiat Chrysler gave United Auto Workers officials tens of millions of dollars in previously unreported bribes as part a massive criminal operation.
Private investigators working for GM have uncovered evidence of offshore bank accounts in Switzerland, Panama, Singapore, Lichtenstein and the Cayman Islands set up for the benefit of top UAW officials, including four of the last five UAW presidents. The secret accounts were part of a sophisticated scheme by Fiat Chrysler to funnel millions of dollars in illegal payments to union officers for their services in betraying workers.
These revelations point to a scale and extent of corruption within the UAW even greater than the findings of the federal investigation into bribery and kickbacks. So far, that investigation has led to the conviction of more than a dozen people, mostly UAW and Fiat Chrysler management officials.
The list of UAW officials now serving jail time includes former UAW President Gary Jones and former UAW vice presidents Joe Ashton and Norwood Jewell. Acting UAW President Rory Gamble is also under federal investigation for taking kickbacks.
GM launched the investigation as part of an attempt to reopen its lawsuit against FCA, claiming the payments to the UAW gave its rival an unfair advantage in contract negotiations. If GM felt it had to go to the courts, it is because the UAW’s corruption grew to such an extent that it undermined its own corporate interests.
The new court filings include evidence that Ashton served as a direct agent of FCA on the GM Board of Directors as part of a scheme codenamed Operation Cylinder aimed at forcing GM into a merger with FCA.
However, the real victim of this conspiracy was not GM, but the workers, who suffered devastating job losses and concessions.
Revealed in these documents is the fact that the UAW is not simply an agent of management in the exploitation of the working class, but direct participants and beneficiaries.
The bribery operation took place on a vast scale, with millions of dollars funneled through a sophisticated system of hiding transactions. The people doing this were not amateurs. For an operation of this size and sophistication, corruption is an inadequate term.
These documents expose the UAW as a criminal syndicate. If they are able to carry out crimes on this scale, who knows what else they are capable of? Suffice it to say that in 2018, a 21-year-old worker named Jacoby Hennings walked into a UAW office to make a complaint and did not walk out of the plant alive.
Criminality emerges from the very social being of this organization. These bribes were not an accident, a wart on an otherwise healthy organization. A whole system of oppression and exploitation finds its expression in these crimes.
As early as 1984 the Workers League, forerunner of the Socialist Equality Party (US), pointed to the development of corporatism in the UAW, warning of a parallel to Mussolini’s labor syndicates in fascist Italy. At that time, the UAW openly embraced the principle of union-management collaboration.
This led to the setting up of various joint programs and joint training centers, starting in the mid- to late 1980s, that served as a conduit for the funneling of corporate cash into the coffers of the UAW to the tune of hundreds of millions of dollars.
Corporatism grew naturally out of the nationalist and pro-capitalist program of the unions. Under conditions of the increasingly globally integrated character of production, the national-based strategy of achieving reforms proved worthless. In response, the UAW served up racist anti-foreigner demagogy combined with unbridled support for American capitalism. The UAW suppressed strikes and any form of resistance by workers to increased exploitation.
During the 1980s the UAW and other unions—the United Steelworkers, United Mineworkers, Teamsters, United Food and Commercial Workers—isolated and betrayed one strike after another and agreed to massive concession contracts. By the early 1990s, it was clear that a qualitative change had taken place in the relation of the unions to the working class.
The Workers League concluded that the unions could no longer be called “workers organizations.” The Russian revolutionary leader Leon Trotsky, writing in the 1930s, said of the leaders of the old American Federation of Labor, “Should these gentlemen … defend the income of the bourgeoisie from attacks on the part of the workers; should they conduct a struggle against strikes, against the raising of wages, against help to the unemployed [in other words what the UAW and all unions do today] then we would have an organization of scabs, and not a trade union.”
This is precisely the role of the UAW and the unions as a whole today. They are in the truest sense “an organization of scabs.”
For exposing this reality, the World Socialist Web Site and the Socialist Equality Party have come under relentless attack by all the middle-class groups of the pseudo-left such as the Democratic Socialists of America, Jacobin Magazine and Labor Notes.
Those who talk about the UAW and other unions as working-class organizations not only show themselves as completely removed from reality, but also display their indifference to the plight of workers who find themselves under the thumb of these gangsters.
All of the middle-class apologists for the unions stand exposed by the UAW’s corruption. They have their own insidious relationship with this system of exploitation. In an objective sense, it serves their interests.
The new exposures further confirm the urgent need to build independent workplace and factory committees under the democratic control of workers.
The UAW is collaborating with the auto companies to suppress opposition to the return to full production at North American auto plants in the midst of a deadly pandemic, even as management has abandoned the most minimal safety protocols. This has led to hundreds of infections, with the actual count being covered up by management and the UAW. More than two dozen workers have died at plants operated by the Detroit automakers.
Workers should recall the fact that the temporary shutdown of North American auto production last March only came about through wildcat actions taken by workers in the US, Canada and Mexico in defiance of the unions.
The fight to build independent rank-and-file safety committees at plants and workplaces must be expanded. Workers should follow the initiative taken by autoworkers in the Detroit area at Fiat Chrysler Jefferson North Assembly, Sterling Heights Assembly, Toledo Jeep and the Ford Dearborn Truck Plant, where safety committees have already been established.
A national and global network of these committees must be built uniting autoworkers with logistics workers, transportation workers, teachers, service workers and all sections of the working class to prepare a general strike for safe workplace conditions and the shutdown of non-essential production until the pandemic is contained.
The fight against the homicidal policy of the ruling class in relation to the pandemic requires a fight against capitalism. It means a confrontation with the Trump administration and the whole corporate-backed two-party political setup in the US.
In this struggle, workers confront in the gangsters in the UAW their bitterest opponents.
Shannon Jones
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