Hundreds of Big Lots and Party City stores to close, as jobs bloodbath in retail accelerates

Chase Lawrence

Party City, a retail chain specializing in party goods founded in 1986 in Hanover, New Jersey, is soon to be out of business having filed for Chapter 11 bankruptcy protection on December 21 and announced the immediate layoff of all headquarter staff, as well as distribution center workers the day before. The announcement follows on the heels of retail chain Big Lots’ announcement that it will close more than 400 of its 900 stores after filing for Chapter 11 bankruptcy in September. Big Lots, founded in 1967 in Columbus, Ohio, as Consolidated Stores and later renamed in 2000, joins the ranks of dozens of retail outlets going out of business.

The majority of the 700 Party City stores in North America are set to close by February 28, excluding the 29 franchisee stores. The vast majority of the 6,400 full-time and 10,100 part-time Party City workers will suddenly be out of a job. Corporate employees were left without severance pay and with an immediate termination of benefits.

A Party City store in Chattanooga, Tennessee [Wikimedia Commons]

Stores outside the continental US which are not operated by Party City HoldCo will reportedly continue to operate.

The shuttering of these businesses is taking place amid a slaughter in the retail sector, including such well known chains as Macy’s, which is itself part of a broader assault on jobs. Recently hundreds of Stellantis Jeep autoworkers in Toledo, Ohio, were given layoff notices, part of 11,506 auto sector layoffs in November.

The shakeout in the retail sector is also part of a wider assault on jobs. Almost 46,000 auto layoffs in total were recorded in 2024, according to job placement firm Challenger, Gray & Christmas, including continuing layoffs at Ford, GM, Stellantis and Volkswagen Group.

Meanwhile, the tech sector worldwide saw over 150,000 layoffs among 539 tech companies this year. These layoffs contradict the claims of a “strong economy.” In reality, the US financial system is increasingly divorced from the real economy, with Wall Street kept afloat by an inflow of international investments. The situation is comparable to that preceding the stock market crash of 1929, with one Financial Times commentator calling it the “mother of all bubbles.”

A recording of the announcement of the “winding down” of Party City made by CEO Barry Litwin was posted to Tik Tok by a former employee. The closing was greeted with anger as shown in the Tik Tok comments. Some of the representative examples are listed below:

* “My daughter worked for Party City for 10 years, totally unacceptable. No severance pay or nothing, now she has to move out of her apartment and find a new career. She gave them so much how?”

* “‘You can get COBRA’ is like saying ‘You can move into a big loft in NYC’—that’s a pipe dream, it costs a fortune”

* “Worked at party city for 7 years ... found out Thursday right after clocking in. I really feel bad for all my managers most been there for 15+ and it’s their only source of income 🥲”

* “the CEO of Party City made $2,658,334 in total compensation. This included: $1,050,000 in salary, $1,561,368 in bonus, and $46,966 in other compensation…”

Party City, like many now shuttered retail chains, was a victim of financial parasitism, being taken over by private equity firms and saddled with debt. In 2012, private equity firm Thomas H. Lee Partners acquired majority control through a leveraged buyout, which involves a company buying out another using debt, which is then piled onto the purchased company. This “leveraging” no doubt played a role in the insolvency of Party City, with the company being forced to pay a significant amount of its profits towards debt repayments instead of investment in operating the business.

Big Lots cited high interest rates and inflation, which negatively affected sales, as a factor in its bankruptcy. A deal was reached with Gordon Brothers Retail Partners, which may stop at least 200 to 400 of the stores from closing and transfer the Big Lots brand to Variety Wholesalers. This would still result in the vast majority of its 1,300 remaining stores in 48 states closing, and the laying off of a corresponding—or greater—proportion of its 27,700 workers. This year 400 stores have already been closed before the decision to liquidate was announced.

Several creditors have already filed objections to the terms of the most recent deal, presented in bankruptcy court Monday. This follows the collapse of another deal to sell to Nexus Capital Management after it demanded more equity financing, i.e., the selling of parts of its ownership to investors for cash and $20 million in savings.

The company completed its Chapter 11 bankruptcy process last year, converting $1 billion out of its $1.7 billion in debt to equity shares to be owned by its lenders. Between 2022 and today, 80 stores were already closed.

According to data from research firm CoreSight, US retailers have announced more than 7,100 store closures through the end of November 2024, representing a 69 percent jump from the same period last year. The number of closings outnumbered the 5,900 openings of stores.

The chief executive of Coresight Research, Deborah Weinswig, stated that this “is the highest number of store closures seen since 2020, when the pandemic shutdown of physical stores and the resulting fallout caused mass closures.”

As CBS News reported in an article on the closings, some retailers report that while Walmart is able to find ways to appeal to financially strapped shoppers, “inflation-weary shoppers are cutting back or becoming more choosy in searching for sales and deals.”

“There is not enough growth in the retail market for every player to do well, which is why we are seeing polarized results,” said Neil Saunders, an analyst with GlobalData in a comment to CBS MoneyWatch on the closures.

In addition to a lack of sufficient growth in the retail market, the increasing dominance of e-commerce over the retail goods market has played a role in the downfall of brick-and-mortar stores.

“A lot of the store closures occurring this year are the result of companies like Shein, Temu and Amazon snapping up consumer dollars by making shopping easier and more affordable,” Weinswig said, adding that inflation has hit consumers hard.

US credit card defaults at highest level since Great Recession

Jerry White

Credit card defaults in the US reached their highest level since the 2008 financial crash during the first nine months of 2024, according to figures compiled by BankRegData and cited in a recent Financial Times article. Credit card lenders were also forced to write off $46 billion in seriously delinquent debt balances through September 2024, up 50 percent from the same period the year before, and the highest level in 14 years. 

A customer uses a Visa credit card to pay for gasoline at a gas station in Mundelein, Ill., Feb. 8, 2024. [AP Photo/Nam Y. Huh]

These figures reveal widespread social distress and economic insecurity in America’s supposedly booming economy. With rising expenses and stagnant wages, tens of millions of workers and lower middle class people have been forced to rely on their credit cards to pay for food, gas, medicine, clothing and other living costs. Hit by elevated interest rates, they have not been able to make their credit card payments. 

“High-income households are fine, but the bottom third of US consumers are tapped out,” said Mark Zandi, the head of Moody’s Analytics, told the Financial Times. “Their savings rate right now is zero.” 

[Photo: Federal Reserve Bank of New York]

After government stimulus checks allowed borrowers to pay down their credit card debts in 2020 and 2021, credit card debt has risen by a combined $270 billion in 2022 and 2023, according to the Federal Reserve Bank of New York. It surpassed the $1 trillion mark in mid-2023 and reached $1.66 trillion in the third quarter of 2024. The average American household credit card debt was $10,757 in the third quarter, according to personal finance web site Wallet Hub.  

“Nearly half of Americans still have debt from the holidays from last year,” said WalletHub writer and analyst Chip Lupo, adding that a third of respondents to his organization’s survey reported they would spend less this year on holiday shopping. 

Unable to pay off their balances in full, borrowers sent the credit card companies $170 billion in interest payments in 2024. As of last Friday, the average credit card interest rate was 20.35 percent, according to Bankrate.

These loan shark rates have allowed the biggest credit card lenders—Visa, Mastercard and Capital One—to reap record profits. Visa, the largest, booked $19.7 billion in 2024 profits (up 16 percent from FY 2023) and enjoyed a 55 percent profit margin (up from 52 percent in FY 2023); 2024 revenues shot up 10 percent to $35.9 billion.

But financial pressure on credit card holders has led to a spike in defaults and delinquencies. The percentage of overall loans that have been marked as unrecoverable has now hit 6.1 percent, from 5.2 percent a year ago, according to Capital One, the US’s third largest credit card lender. Credit card delinquency rates, considered one step from loans that must be written off, peaked in July, according to data from Moody’s. Rates remain higher than pre-pandemic levels with $37 billion in balances at least one month overdue. 

[Photo: Federal Reserve Bank of New York]

All forms of household debt are reaching the breaking point. The Federal Reserve Bank of New York’s survey of household debt and credit released last month showed that aggregate balances increased by $147 billion in the third quarter of 2024, a 0.8 percent rise from 2024Q2. Balances now stand at $17.94 trillion and have increased by $3.8 trillion since the end of 2019, just before the pandemic recession.

A breakdown of these debts include: 

• Mortgage balances grew by $75 billion during the third quarter of 2024 and totaled $12.59 trillion at the end of September. 
• Balances on home equity lines of credit (HELOC) rose by $7 billion, the tenth consecutive quarterly increase after 2022Q1, and there is now $387 billion in aggregate outstanding balances.
• Auto loan balances rose by $18 billion, and now stand at $1.64 trillion. 

• Student loan balances grew by $21 billion, and now stand at $1.61 trillion.
• Other balances, which include retail cards and other consumer loans, remained effectively flat, with a $2 billion increase.

Household budgets eaten up

The average family budget is being all but eaten up by high living costs, according to data from the Consumer Expenditure Survey from the US Bureau of Labor Statistics (BLS). 

• The average household earned $101,805 in 2023 before taxes. Average net income was $87,869 a year, according to the BLS.  
• Out of this, the average household spent $77,280 on various expenditures in 2023, up $4,313—or 5.9 percent—from 2022.
• Housing ($25,436 or 32.9 percent), transportation ($13,174 or 17 percent) and food ($9,985 or 12.9 percent) make up the largest portions of the household budget. 

What this means is that after monthly expenditures, which have risen, households have virtually nothing left to spend on what the Bureau of Labor Statistics defines as “discretionary spending.” This include elemental necessities, such as clothing, education, household goods and personal care, along with such requirements for a healthy and enjoyable life as entertainment, travel, leisure and eating out. 

“Many Americans spend a sizable amount of their income to keep a roof over their heads, food on the table and a means of transportation,” the Bankrate article on the government’s household survey noted. “Inflation has cooled significantly from its 40-year-high in 2022, yet prices remain elevated on various goods and services, leaving consumers with less money in their budgets for such financial matters as savings and debt repayment.” 

It continues: “Only 16 percent of U.S. adults say they have enough emergency savings to cover between three and five months’ worth of living expenses, while 27 percent report having no emergency savings at all, Bankrate’s 2024 Emergency Savings Report found.”

In many parts of the country, after-tax household incomes are far less than the $87,869 figure cited by the Bureau of Labor Statistics. According to Smartasset’s federal income tax estimator for 2024-25 taxes, net income would be far lower in Houston ($85,569), San Francisco ($81,661), Chicago ($81,000), Detroit ($79,503) and New York City ($78,283). The subtraction of $77,280 in yearly expenses or even more in higher-cost areas is what has left many households with a negative net income, forcing them further and further into debt.

Particularly crushing has been the cost of housing, which has jumped 30.4 percent nationwide between 2019 and 2023. The average monthly rent rose to $2,009 in October 2024, while property taxes and mortgage balances increased.

A survey by the US Census Bureau showed that half of renter households (21 million) were “cost-burdened” in 2023, meaning they spent more than 30 percent of their income on housing. 

But even more staggering was a November 2024 report by Redfin that showed more than one-fifth of US renters reported spending their entire regular income on rent. A Redfin-commissioned survey conducted by Ipsos in September 2024, found that 20 percent of respondents had to work second jobs to afford rent, 14 percent relied on family cash gifts and 13 percent had to pull money out of their retirement funds early.  

The high cost of housing has caused a record number of young Americans (31 percent) to move back in with their families or never move out. Nearly one-third, or 31 percent, of Generation Z adults—born between 1996 and 2012—live at home with parents because they cannot afford to buy or rent their own space, according to a 2023 report by Intuit Credit Karma. One-quarter of young adults live in a multigenerational household, up from just 9 percent five decades ago, according to Pew Research, due to financial pressures, including ballooning student debt and housing costs.

Boeing workers on the picket lines in Everett, Washington

Commenting on the precarious situation young workers in particular face, a Stellantis worker at the Sterling Heights Assembly Plant in suburban Detroit told the World Socialist Web Site, “The company fired all the workers who were supplemental employees, and many still don’t have jobs. Unemployment is paying six or seven hundred dollars a week, and that doesn’t make it. No wonder people are resorting to violence and robbing stores. Something needs to change, and in a hurry.”

The rising cost of living has been a major factor in the growth of the class struggle over the last two years, including the strikes by 33,000 Boeing workers and 47,000 East and Gulf Coast port workers in 2024. As a young striking Boeing worker in Everett, Washington, told the WSWS, “Rent in the Seattle area is roughly $3-$4,000 for a single-family home. I don’t know how anyone can afford to live here. We definitely can’t.” He concluded: “New hires, old hires, retirees, we’re sticking together for a common goal, and that’s better quality of life for each of us and our families.”

These conditions led to the electoral debacle for the Democratic Party and its candidate Kamala Harris, who expressed nothing but indifference to the social catastrophe confronting the working class and a single-minded focus on expanding American imperialism’s wars.

UK Labour government expels record 13,500 asylum seekers and migrants since coming to office

Margot Miller

The UK Labour government has set a record for migrant removals, expelling almost 13,500 since it came to office in July and exceeding the previous Conservative government’s rate of deportations.

The news was reported by the Home Office this month with the headline, “Huge increase in migration returns and illegal working arrests.” Home Secretary Yvette Cooper boasted, “The number of operations and arrests are up, and we are on track to meet our target of increasing removals to the highest level in five years.”

Deportations to seven countries have been carried out, including Brazil, Pakistan, Nigeria and Albania. The Guardian reported, “Sources in the [Home Office] department confirmed that 37 people were removed on the Pakistan flight. One of those forcibly removed was a refused asylum seeker whose wife was a dependant on his asylum claim”, adding “The Home Office removed him but left his wife in the UK.”

To expedite the removals, the government carried out workplace raids, targeting “nail bars, supermarkets and other relevant industries including car washes and construction.” The Home Office report continued, “…illegal working operations and arrests since the new government came into power are up by almost a third on the same period last year.”

A Home Office Immigration Enforcement vehicle in north London [Photo by Philafrenzy / Wikimedia / CC BY-SA 4.0]

In a December 23 update, the Home Office’s Immigration Enforcement department noted that, just in London, “Nearly 1,000 enforcement visits have been carried out across the capital since the summer, thanks to a crackdown on illegal working by the Home Office’s Immigration Enforcement team. Between July and November, 996 visits resulted in 770 arrests and 462 premises receiving civil penalty notice referrals.”

To beef up the capability of the Immigration and Enforcement agency further, an extra £5 million was announced for body-worn cameras to aid 1,200 frontline officers in the collection of evidence against errant employers. New fingerprint kits costing £3 million will be purchased to improve identity checks.

The government has also redeployed an extra 1,000 employees to Border Security. This enabled the return of more than 800 migrants on 33 charter flights to countries in Europe, Africa Asia and South America since July.

While denying the right of asylum to people displaced and/or without a livelihood—due, among other factors, to over 30 years of NATO wars in the Middle East and North Africa and routine imperialist plunder of the majority of the world’s economies—inhumane anti-immigrant policies are framed by Labour as preventing exploitation at work, and “smashing the [people smuggling] gangs”.

Cooper stated, “Illegal working is a blight on our economy. It is deeply exploitative and undercuts those employers who do the right thing and play by the rules.” This is a cynical ploy to blame migrants in cheap labour jobs for driving down wages, aiding the scapegoating efforts of Nigel Farage’s Reform UK party.

To demonise asylum seekers and immigrants further, the Home Office reported that of the 13,500 removed, 2,100 were criminals convicted of “drug offences, theft, rape and murder,” without breaking down this figure.

The department is also launching a publicity campaign directed at prospective migrants warning of “exploitative practices” and “dire and inhumane living conditions” should they come to Britain. So impressed with the government’s ruthless purge of immigrants was the right-wing Daily Express that it ran with the headline: “Yvette Cooper tells illegal migrants ‘don’t come to Britain—you’ll hate it.’”

But for the mouthpieces of the most right-wing sections of the media, no number of deportations is ever enough with a constant drumbeat demanding more. The Telegraph complained that Cooper had not set a timetable for reducing small boat crossings from France, lamenting the arrival of 609 people in nine dinghies December 12—a daily record since October 18.

The nominally liberal Independent reprimanded Labour for failing to include targets to reduce migration, both legal and illegal, in the review of its six missions. The publication complained that small boat crossings are on the rise, with 34,880 people arriving this year, including 21,306 since the general election. It cautioned that former Conservative Prime Minister Rishi Sunak’s failure to “stop the boats” helped bring down his government.

Interviewed on the BBC’s Sunday with Laura Kuenssberg, Cooper declared that “border security is one of the [government’s]foundational issues, before you even get to any of the missions.”

Julia Tinsley-Kent, head of policy and communications at the Migrants’ Rights Network, accused the government of “criminalising migration”, adding “people are forced into making dangerous crossings because safe routes do not exist… Punishing migrants without permission to work or reside … pushes [them] into exploitative conditions.”

Emma Ginn, director of the charity Medical Justice, said, “The new data being celebrated by the government includes real people who have been unable to access legal representation, nor the medical and expert evidence needed to properly present their case, meaning some may face real risk on forced return to their country.

“Our volunteer doctors have visited some of them and documented their physical and psychological scars of torture as well as deterioration due to the notoriously dangerous UK immigration detention conditions. Many have been forcibly separated from their family, their friends and their community.”

According to the International Organization for Migration (IOM), 77 people have died attempting the hazardous English Channel crossing this year. Another three were reported dead today. The IOM calls for an end to preventable deaths and wants safe and legal means of entry. But the Labour government, like its counterparts throughout the European Union, is determined to seal the borders.

On December 10, Cooper co-hosted alongside Germany a meeting in London with the Interior Ministers of Belgium, France and the Netherlands to coordinate efforts to stop migrant flows. The day previous, the UK signed a “joint action plan on irregular migration” with Germany.

In September, Starmer held a “fantastic” meeting with the Italian Prime Minister, the neo-fascist Georgia Meloni, singling out her anti-immigration policies against refugees as a model to be emulated. Meloni’s party the Brothers of Italy is the scion of Mussolini’s Republican Fascist Party.

Italy has opened two detention camps under Italian jurisdiction in Albania to hold up to 3,000 migrants at any one time while awaiting processing, at an initial cost of 16.5 million euros.

Cooper declared in November that Labour wanted to fast-track deportations of “people who are arriving from predominantly safe countries…”, adding “What Italy is looking at with Albania is being able to take those fast-track decisions”.

Regardless of the political coloration of the governments in Europe, the political establishment is adopting the policies of the far-right. Meloni’s latest fans include Spain’s Socialist Party led government, which has just granted her “one of the highest honours of the Spanish state: the Grand Cross of the Order of Isabella the Catholic.”

The Italian premier’s politics are of a piece with those of Marine Le Pen in France and US President-elect Donald Trump. The latter has declared his administration’s aim from day one will be to deport 11 million undocumented immigrants, including children born on American soil.

Billionaire Elon Musk, who is to lead a US Department of Government Efficiency under Trump, is promoting the global fascist right, including, in the UK, Farage and Reform UK.

South Korea’s acting president impeached amid ongoing protests

Ben McGrath

The acute political crisis in South Korea continues to deepen as the National Assembly, led by the main opposition Democratic Party (DP), voted to impeach acting president Han Duck-soo on Friday. Han, who is also prime minister, assumed presidential duties on December 14, when President Yoon Suk-yeol was also impeached and suspended from office over his failed attempt to impose martial law on December 3.

Protesters hold placards showing images of impeached President Yoon Suk Yeol, right, and acting President Han Duck-soo during a rally demanding Han's impeachment outside National Assembly in Seoul, South Korea, December. 27, 2024. The signs read "Impeachment immediately" [AP Photo/Ahn Young-joon]

The DP submitted the motion against Han to the 300-seat parliament on Thursday. It passed the following day 192-0, with the DP’s 170 seats and the rest from minor parties or nominal “independents” aligned with the Democrats. All 108 members of the ruling People Power Party (PPP) boycotted the vote. Although a parliamentary minority, it holds ruling party status as President Yoon comes from the PPP.

The PPP is seeking an injunction to reverse parliament’s decision last Friday. While the South Korean constitution requires a two-thirds parliamentary majority to impeach a president, a cabinet minister can be impeached by a simple majority. The party argues that since Han is serving as the acting president, the two-thirds majority rule should apply to him.

Han publicly accepted his impeachment, stating, “I respect the decision of the National Assembly, and in order not to add to the confusion and uncertainty, I will suspend my duties in line with relevant laws, and wait for the swift and wise decision of the Constitutional Court.” The court rules on whether impeached officials are removed from power or not. He has been replaced as acting president by Finance Minister and Deputy Prime Minister Choi Sang-mok.

Han, appointed by Yoon to his cabinet, and the PPP have stonewalled impeachment proceedings against Yoon. In impeaching Han, the DP cited his refusal to appoint three new Constitutional Court justices to fill existing vacancies, as well as blocking bills to establish special counsel probes into Yoon’s attempt to impose martial law and into his wife, Kim Geon-hui, who is accused of corruption.

The DP also accused Han, in his capacity as prime minister, of failing to oppose Yoon’s attempt to impose martial law, essentially a coup plot, which Han admitted to learning about nearly two hours before the president made his declaration.

In order to remove a president from office, six of nine judges on the Constitutional Court must approve. They have 180 days from Yoon’s suspension to make a decision. Currently, there are only six judges on the court, with three vacant seats since October. This means if only one justice sides with Yoon, he would return to office with all presidential powers, including over the military.

The Constitutional Court is one of the country’s two top-level judicial bodies, alongside the Supreme Court. The president appoints all nine justices; however, only three are directly chosen by the chief executive. Three justices are nominated by the chief justice of the Supreme Court and the other three are nominated by the National Assembly.

At present, two justices were directly appointed by Yoon’s predecessor, Moon Jae-in, a Democrat. One was directly appointed by Yoon. The other three were chosen by the Supreme Court. The National Assembly is now wrangling over the appointment of its three allotted judges, with the PPP claiming that an acting president cannot legally appoint the justices. Han had sided with the PPP.

Mass protests are continuing against Yoon and the PPP, which demonstrators see as an accomplice in the president’s attempt to impose a military dictatorship. On Saturday, upwards of 500,000 protesters gathered in Gwanghwamun, Seoul calling for Yoon’s removal from office and arrest. They also called for the dissolution of the PPP. Police claimed only 35,000 took part, a drastic undercounting meant to downplay the protests in hopes of preventing them from growing.

Notably, many anti-government protesters on Saturday also waved Palestinian flags in opposition to Israel’s more than year-long genocide in Gaza and expansion of war throughout the Middle East, which has been backed by Seoul. It is a recognition that the attack on democratic rights is not limited to a single government, but is being carried out by the ruling class around the world. It is also a sign of the anti-war sentiment that exists within the South Korean population.

A counterprotest of Yoon’s supporters took place approximately a kilometer away, which police also estimated at 35,000 participants. Organisers ludicrously claimed three million people took part, a fact easily disproven by photos of the rally. Yoon is also widely despised with over 75 percent of the population supporting his removal from office.

While large by any measure, Saturday’s anti-Yoon rally was significantly smaller than the two million who demonstrated at the National Assembly on December 14 to demand Yoon’s impeachment. The Democrats are downplaying the continuing danger to democratic rights, seeking to direct public anger behind the actions of the National Assembly as well as the impeachment of figures like Han Duck-soo.

The DP and their supporters in smaller fake “progressive” parties and the trade unions conduct the rallies, like the one on Saturday, as campaign events and present Yoon’s removal from office as practically a done-deal. All the problems workers, farmers and youth face are laid at the feet of Yoon, giving the impression that if only he were gone, social and economic problems would be resolved.

As well, the DP’s allies in the Korean Confederation of Trade Unions (KCTU) have ended their token “indefinite general strike,” which was nothing more than scattered protests and short, partial walkouts designed to let workers blow off steam without affecting big business or the government.

Yoon’s coup attempt was not ultimately the result of one man’s predilection for authoritarianism. It was a product of the crisis of capitalism, which is unfolding around the world. The ruling classes are increasingly turning to far-right and fascistic figures, notably Donald Trump in the United States, to impose their will on the working class.

The DP and its allies are seeking to limit the protests to the safe channels of the National Assembly and court system in order to protect the capitalist system itself, thereby covering up the potential for another declaration of martial law should Yoon resume office. This is in a country that was dominated by dictatorial and military rule from its founding as a state in 1948 through the 1980s. Behind the façade of democratic reforms erected after mass protests in 1987, the military and state apparatus retain tremendous influence.

The Democrats’ perfidy has only emboldened Yoon. He and his legal team have largely rejected cooperation with the impeachment and investigation into his martial law declaration. For nearly two weeks, Yoon refused to accept documents from the Constitutional Court related to hearings in his impeachment trial.

On Friday, Yoon’s legal team did finally accept court documents at the last minute before the first impeachment hearing. Yun Gap-geun, one of Yoon’s lawyers, claimed that the documents were delivered “illegally” and that they were unable to prepare properly. The next hearing is scheduled for January 3.

Yoon has also ignored summons from the Corruption Investigation Office for High-ranking Officials (CIO) to appear for questioning, including a third summons requesting he appear this past Sunday on charges of insurrection and abuse of power. It is possible the CIO will request an arrest warrant for Yoon, but this will by no means resolve the ongoing political crisis.

Rising rents leads to increasing poverty in Germany

Tino Jacobson & Markus Salzmann

More and more households in Germany are affected by poverty. One of the main reasons for this is the rapid rise in rents. According to a study by the Paritätischer Welfare Association, which, unlike conventional studies, also takes housing costs into account, 17.5 million people in the country are now affected by poverty, 5.4 million more than previously calculated.

Current housing adverts for Frankfurt am Main

According to the study, people are considered poor if they have less than 60 percent of the median income at their disposal. According to the study, this puts the poverty rate across Germany at 21.2 percent, compared to 14.4 percent according to conventional calculations. This means that poverty is far more widespread than officially recognised.

According to the association, millions of people remain invisible in the usual poverty statistics because their housing costs are not considered. “Anyone who only considers income, but not the fact that people have less and less money at their disposal because they have to pay high housing costs, overlooks the extent of poverty in Germany,” the analysis states.

Young adults between the ages of 18 and 25 are particularly affected by poverty at 31 percent and pensioners at around 27 percent. Single parents are also disproportionately affected at 36 percent.

The unemployed face the greatest risk of slipping into poverty. Here, the poverty rate adjusted for housing costs is 61.3 percent. Citizens allowance (basic income support), which is already far too low, will not be increased in the coming year so as not to burden government budgets, meaning that an increase in poverty is inevitable.

Households in Bremen (29.3 percent), Saxony-Anhalt (28.6 percent) and Hamburg (26.8 percent) are most affected by housing poverty. While the poverty rate in Berlin is 13.7 percent according to conventional calculations, this rises to 20.8 percent when housing costs are taken into account. The situation is very similar in Brandenburg. The difference between the calculations is most pronounced in Hamburg and Schleswig-Holstein.

The fact that poverty is increasingly being caused by sky-rocketing housing costs is shown by the fact that more and more households are having to spend an ever-larger proportion of their income on housing.

While an average of 21.5 percent of income was spent on housing in 2020, this proportion had risen to 25.2 percent by 2023. For households affected by poverty, the figure is a staggering 46 percent.

The policies of federal and state governments of all political colours have led to a massive increase in rents in recent years, which are becoming almost impossible to afford for ever larger sections of the population. At the same time, property companies are making fantastic profits.

In Berlin, rents literally exploded between 2014 and 2023. During this period, the average rent rose from €8.10 to €16.35 per square metre.

Rents for new lettings in Berlin and Potsdam have risen more than in any other region in Germany. According to the report, Potsdam recorded the largest increase of all districts and independent cities for first-time and re-letting with a rise of 31.2 percent in 2023. It was followed by Berlin with an increase of 26.7 percent.

On average across Germany, rents for first-time lettings and re-lettings rose by 7.3 percent in 2023. Berlin is now the second most expensive city in Germany at over €16 per square metre. Rents are only higher in Munich, at more than €20 per square metre.

With the planned end of the so-called rent cap at the end of 2025, rents will continue to rise exorbitantly. With the rent cap, new lettings may not be more than 10 percent above the local comparative rent, although this only applies in special situations anyway and can be easily circumvented.

Lukas Siebenkotten, President of the German Tenants’ Association, pointed out that with the end of the rent cap, “re-letting rents would skyrocket, as there would then no longer be an effective cap.” In short, rents will then rise even more sharply and poverty and homelessness will increase even further.

In addition, the number of social housing units has fallen dramatically. In 1987, there were still 3.9 million social housing units in Germany, but these have been reduced to just under 1 million today. In Berlin, there were almost 400,000 social housing units in the early 2000s, of which just 90,000 are still available. In addition, a further 47,700 will fall out of social housing by the end of 2026. In contrast, over one million people in the capital alone would be entitled to social housing.

The Berlin state government, made up of the Christian Democrats (CDU) and Social Democrats (SPD), has put together a massive austerity package for the coming year that will further exacerbate the situation. Social housing subsidies will also be cut by €150 million euros, which amounts to 10 percent of the previous subsidy amount of €1.5 billion. As a result, even fewer social housing units will be built in future. In addition, subsidies to limit rents in social housing will be cut by 45 percent. The Berlin Senate (state executive) is reducing the subsidies here from €7.1 million to just €3.9 million.

The cooperation agreement between the Senate and the state-owned housing companies, which has been in place since 2023, has allowed for an annual rent increase of 2.9 percent since 2024. The state-owned housing companies have announced further sharp rent increases for 2025. Tenants of Wohnbaugesellschaft Stadt und Land in Treptow-Köpenick can expect a rent increase of up to €11.24 per square metre.

On the other hand, the management boards of the state-owned housing companies are receiving generous salaries. Ulrich Schiller from Howoge, which made a profit of €79.3 million in 2023, received a total of €347,133 in remuneration last year. Sandra Wehrmann from Degewo, which made a profit of €82 million in 2023, received €351,671.

This remuneration is still low compared to that of the large property companies. In 2022, the former head of Deutsche Wohnen, Michael Zahn, received over €18 million in severance payments alone following the successful merger with Vonovia.

The rising burden of rents for millions of people is symptomatic of the prevailing capitalist socio-economic order. While a narrow layer at the top of society is shamelessly enriching itself at the expense of the population, all social achievements are falling victim to austerity measures. Instead of investing money in affordable housing, millions are being spent on war and strengthening the powers of the state.

Vera List Center Announces The 2025 Fellowships For Early Career Writers, Scholars and Artists

Application Deadline:

The application deadline is January 6, 2025.

Tell Me About The Vera List Center Fellowship:

The Vera List Center (VLC) Fellowship supports the development and presentation of ambitious art and research projects by national and international early or mid-career artists, writers, scholars, and activists. It prioritizes individuals from underrepresented communities in the art world and those whose experimental, political, or research-intensive practices often face limited support. This two-year, part-time, non-residential fellowship offers financial, curatorial, and professional resources to fellows, enabling them to develop and present their projects within the interdisciplinary context of The New School and VLC’s public programs. Fellows benefit from collaboration with VLC staff, faculty, and students, as well as access to institutional networks, fostering intellectual growth and professional development.

Which Fields are Eligible?

Social Sciences

Type:

Fellowship 

Who can Apply For The Vera List Center Fellowship?

Also, the eligibility criteria include:

• Open to journalists, scholars, activists, visual and performing artists, critics, public intellectuals, curators, and cultural practitioners.
• Applicants must demonstrate experience in conceiving, researching, and executing work or projects.
• Candidates must not be enrolled in a degree-granting program.
• Projects focused on promotion, funding business operations, or curating/documenting existing work are not eligible.
• Strong encouragement is given to candidates from diverse backgrounds worldwide, especially those lacking significant institutional support.

How are Applicants Selected?

• Artistic and/or scholarly excellence of the proposed project.
• Alignment of the project with the VLC Focus Theme: Matter of Intelligence.
• Long-term significance of the fellowship and project to the candidate’s practice.
• Feasibility and practicality of completing the project within the fellowship timeframe.
• Alignment between VLC and New School resources and the project’s needs.
• Contribution to advancing diverse insights into politically engaged art.

Required Documents:

Applicants are also to submit the following documents:

• A detailed project proposal outlining the fellowship project.
• Evidence of experience in researching and executing similar projects.
• Professional CV or resume.
• Samples of past work relevant to the proposed project.

Which Countries Are Eligible?

All countries 

Where will the Award be Taken?

The New School, New York City, USA (with intermittent short-term residencies for non-New York residents).

How Many Awards?

Not specified

What is the Benefit of the Vera List Center Fellowship?

Additionally, the benefits include:

• A $25,000 research stipend (subject to taxes and deductions).
• Budget allocation for travel, project production, and presentation.
• Access to The New School’s academic, library, and professional resources.
• Collaboration with VLC staff, faculty, and students.
• Professional and curatorial development support.
• Opportunities for public presentation of the project.
• Connection with VLC’s institutional networks and partners.
• Pairing with a VLC Board companion for guidance and mentorship.

How Long Will the Award Last?

2 years

How to Apply:

To begin your application, visit: Vera List Center Application Website.

America’s Invisible Sports Betting Epidemic

Stewart Lawrence

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The Cardsharps, c. 1594, by Caravaggio

What do Tiger Woods, Michael Jordan, Charles Barkley and Floyd Mayweather, Jr. have in common? They’re all sports superstars, of course. But they’re also something else: Hard-core gambling addicts.

Mayweather, Jr. regularly gambles as much as $400,000 on college football games. He reportedly once won $3 million on a single Orange Bowl contest. But his biggest bet – and loss — came in 2014, when he wagered $10 million that the Denver Broncos would win the Super Bowl. In fact, the Broncos were crushed 43-8 by the Seattle Seahawks in one of the biggest Super Bowl blow-outs in history.

Jordan, meanwhile, is fond of betting on golf, including his own head-to-head contests with Woods and Barkley. He once lost a $1.25 million golf competition with Richard Esquinas, a private businessman from San Diego.

There are rumors, never confirmed, that Jordan’s gambling habit – which includes unsuccessful betting on poker and roulette at casinos in Atlantic City — was a major reason behind his retirement from basketball.

Woods, it seems, has a penchant for card gambling. He reportedly bets $25,000 a hand when he plays his favorite game – Blackjack — and is known throughout the casino circuit as a high-roller player.

According to one source, “he’s even received a $1 million betting limit by the MGM Grand in Las Vegas, where he always requests for the table to be filled with beautiful girls.”

None of these sports celebrities seems to have lost it all gambling – and they have the talent and drive – and above all, the money — to rebuild their fortunes after suffering major reversals.

But the average Joe is rarely so lucky.

The “mainstreaming” of sports betting

Sports betting, mostly illicit, has existed on the margins for decades.  But these days there are more legalized gambling opportunities than ever, thanks to a landmark 2018 Supreme Court decision that lifted the federal ban on sports betting.

Since then, 38 states, including Nevada, New Jersey and Connecticut, as well as Washington, DC have legalized the practice, with another 21 states considering similar laws.  It won’t be long, industry experts say, before sports betting is as commonplace — and frequent – as purchasing a ticket to a movie.

Sports betting is not the only form of legalized gambling, but it’s spreading faster than most. In part, that’s because it appeals most heavily to younger demographics, especially Millennials.  About 86% of all sports betting occurs online or with mobile apps, a practice which favors youth cohorts.

Men are also the primary sports betters, about 90%, according to Helixa, a user-insights platform.  Young African-American and Hispanic males are disproportionately high users. More than half fall into the 18-34 age bracket.

In 2021, as the COVID-19 pandemic spread, there was an 80% increase in the practice.  Currently, more than 20% of Americans place a sports bet monthly.

But these numbers are paltry compared to what’s coming. Some of the country’s largest and most populous states, including New York, California and Texas, have yet to legalize sports betting, but almost certainly will within a year or two – barring a pushback from Congress or from federal regulators

Goldman Sachs estimates that the combination of legislative initiatives and wider consumer adoption could push online sports betting from $900 million in 2021 to a $39 billion market in 2033 – a 300% increase.

Prop betting is more widespread

Another factor fueling sports betting growth is that more kinds of sporting events are being targeted by betters than ever before.

In past decades major sporting events like the National Football League Super Bowl, the Major League Baseball World Series and the NBA Championship Finals were the main venues.  Many work colleagues and neighbors placed friendly bets with each other.  Some risk takers, like Floyd Mayweather, Jr. placed huge bets in Las Vegas, hoping for a jackpot.

But these days no sporting event, however small, is safe from the predatory clutches of gamblers and their “enablers.” Currently, the one main restriction on legal betting is college sports, but it may be only a matter of time before this restriction falls, too.

Another accelerating factor is that gamblers no longer just bet on the final outcome of sports events, or the “spread” – the point difference between the game’s winner and loser.  Increasingly, they also bet on the performance of individual athletes (for example, whether a quarterback will throw a touchdown, and how many) or on the outcome of individual plays (will the kicker’s field goal be successful?)

These so-called “proposition” or “prop” bets have transformed sports betting into a live ongoing practice, with gamblers placing bets continuously as a sporting event unfolds.  Typically, prop bets are fairly small – for example, $50-$100 on the success of a field goal kick, rather than $1,000-$5,000 on the game’s final outcome – but over the course of a single sporting event, their value quickly adds up.

Finally, it’s worth noting that sports betting is especially lucrative as a source of advertising revenue as well as tax revenue for fiscally-strapped states.  Consumers also tend to be more receptive to taxes on betting than on other activities.  All of these factors are acting as huge accelerants to the sports betting trend.

Risk of gambling addiction growing

Arnie Wexler, a compulsive-gambling specialist, predicts that “mainstreaming” sports betting will unleash “a volcano of gambling addiction in America.”  Prior to the legalization of sports betting, researchers estimated the lifetime gambling addiction prevalence rate at about 2% for “pathological” gambling and about 4% for the less severe condition dubbed “problem” gambling – or 6% total.

That may not sound like an epidemic, but it means that more than 15 million Americans, many of them poor and middle class, are suffering the fall-out from spending and losing hard-earned money on gambling.

And the numbers are getting worse. The National Council on Problem Gambling, a Washington-based nonprofit, estimates that gambling addiction, much of it sports-related, has doubled over the past two years.  State governments are aware of the problem but tracking and treating people with gambling problems is not yet a top priority, Wexler and others say.

Some sports betting centers have tried to limit the amounts that bettors can wager on a specific sporting event.  And a few states, while legalizing sports betting overall, still restrict online betting, which helps. But these measures are only slowing down the trend, Wexler and others say.  And many of these restrictions are poorly enforced, or easy to evade.

The larger problem, perhaps, is that compulsive gambling is something of an “invisible” addiction. Many Americans that gamble compulsively – like alcoholics – deny they have a problem, until it spirals out of control.  And the fall-out can be severe. Gambling addicts can rack up massive credit card debt, drain their retirement and savings accounts and eventually sell off valuables and even furniture to feed their “habit.”

While some are forced to stop – or “white knuckle” – their addiction because they simply run out of money, others are so addicted they turn to illegal activity – forging signatures on checks or other forms of outright theft, including embezzlement – just to secure more funds to gamble.  Gambling addiction is also linked to other addictions and mental disorders including depression, chronic anxiety and substance abuse.

With the rise of unregulated sports betting, and the introduction of more sophisticated and mobile betting technology, industry experts like Wexler say these problems are beginning to skyrocket.  Already more consumers are asking for help.  Calls to a national hotline for gambling addiction increased by 33% during 2020-2021.

“It’s this ticking time bomb,” Keith Whyte, the executive director of the National Council on Problem Gambling, told NBC News recently. “We have to take action now.”

Will regulation help?

Despite acknowledging a growing problem, the sports betting world is divided over whether and how to regulate an industry that is being fueled by an insatiable popular demand.  Sports betting also thrives because it’s a source of revenue for cash-strapped states facing persistent fiscal deficits. Most states impose a flat tax or take a percentage of gross profits from sports betting companies; they also collect a one-time application fee for operating in the state. New York, for example, earned $700 million in taxes from sports gambling in 2022.

But the chase after easy money could surely use more guardrails both to protect consumers and to share the benefits from sports betting – and online gambling generally – more widely. Just last week, the US Senate Judiciary committee held its first-ever public hearings to discuss the sports betting epidemic and possible solutions, including federal regulations that could supplant the current patchwork of laws and guidelines passed by states thus far.  Most of those testifying said they supported legalized sports betting but felt that the industry – led by BetMGM and DraftKings  – was being granted carte blanche to advertise and promote the industry with virtual impunity, ignoring the mounting social costs.

Among the reforms suggested at the hearing were a crackdown on the unrestrained advertising currently underway on college campuses that is  luring youngsters to place sports bets, as well as more federal and state resources to support gambling addiction programs.

Keith Whyte, the afore-mentioned executive director of the National Council on Problem Gambling told the committee, “As of last year, for every dollar states have generated from commercial gambling, just .0009 cents were invested in problem gambling services. While substance use disorder is seven times more common in the United States than gambling disorder, substance use disorder receives 338 times more public funding,” he noted.

Predictably, sports betting industry representatives boycotted the Senate hearing, saying the committee members were recycling “myths” about the dangers of sports betting while minimizing its benefits to states and to individual consumers alike.  But critics say the industry is kidding itself and could soon face the same kinds of pressures that led the tobacco industry to face a massive, indeed crippling, crackdown, including injury lawsuits and tight restrictions on sports gambling venues and products, especially mobile apps that have allowed the industry to mushroom in the space of a few years.

The road ahead

Online gambling – especially the recent surge in sports betting – is just the latest form of addictive activity that provides a dysfunctional palliative for the social and psychological ills that so many Americans face as they struggle with low-paying stress-filled jobs, declining real wages and widening income inequality.  For a growing number, sports betting – like playing the lottery, but with better odds – offers the fantasy of scoring a quick kill – or amassing a large fortune – to offset their current financial predicament, or simply to distract them from a host of personal problems and gnawing anxieties.  Some modest sports bettors do gain from their small periodic investments, enough to keep them in the game and supportive of the practice overall.  But too many of the heavy users, whose numbers are growing rapidly, run the risk of losing it all while leaving their lives and families destroyed or damaged.

Nearly six years after the US Supreme Court declared sports betting a constitutional right, some of the unfortunate consequences of that decision are finally coming into focus. But while debate is growing, there’s little consensus on how far the federal government or state government can go to rein in an activity that the High Court has allowed to flourish with such impunity. Fortunately, at least a dozen states are still holding out on the issue, and twenty one states are still opposed to sports betting conducted online or with mobile apps, which has allowed the practice to skyrocket.  In addition, a majority of older voters, ages 65 and above, and women – in contrast to youth, especially men – still tend to express staunch opposition to sports betting, according to opinion surveys. Opinions among middle range age groups are more mixed.  Surprisingly, Republican voters – in Red-leaning states like Texas and Missouri – seem decidedly more inclined than their Democratic counterparts to oppose the expansion of sports betting.

This partisan split is also apparent at the national leadership level. There is some evidence, in fact, that senior Democrats, while alarmed at the sports betting trend, may be more inclined than their Republican colleagues to support the industry overall. Back in 2019, in a surprise move, then-President Trump’s Justice Department called for restricting the promotion of sports betting across state lines, consistent with the 1961 Wire Act. But two years later, President Biden’s DOJ challenged that interpretation, arguing that additional restrictions on online gambling – beyond those established by Obama in 2011 – were unnecessary.  Democrats, consistent with their views on marijuana legalization – or even, the legalization of prostitution – may be more inclined to treat sports betting as a personal freedom, or “choice” issue, rather than a social issue with public health consequences. Moreover, some of the leading gambling states that support sports betting – Nevada, New Jersey, Massachusetts and Biden’s own Delaware, where some of the major betting forms are based – also lean Blue on the political spectrum. More research is needed, but it could be that lobbying by the major sports betting firms – plus, pressure from Democratic voting constituents – explains what appears to be Democratic favoritism toward the industry at the highest levels of its leadership.

The same questions must also be raised about the incoming Trump administration. The president-elect owns several hotels with gambling casinos in Las Vegas and elsewhere. He’s also a diehard supporter of the unregulated free market. But he’s proven equivocal on the sports betting issue in the past.  His first administration took no formal action to promote the industry – quite the contrary.  And the proposed policy agenda for his new regime – Agenda 47, like his first administration – makes no mention of sports betting or gambling at all. (Neither, for that matter, does the policy agenda, such that it is, of his Democratic opponent Kamala Harris).

The upshot? Presently, there’s a dearth of public and political awareness of the scope of the sports betting industry and the benefits and risks of its rapid, largely unchecked growth. An explosion of consumer demand – stoked by rabid unchecked industry advertising – is driving the market to new heights, largely under the radar screen. But pushback from hold-out states – including Democratic California – is growing, and some prominent members of Congress on both sides of the aisle have finally begun to take notice. Fortunately, the industry – and the issue – is still in its infancy.  Which means there’s still time for a full-fledged national debate – and appropriate federal intervention – before sports betting becomes so deeply ingrained in the popular consciousness – and entrenched in state and local economies – that a discussion of meaningful reform becomes practically impossible.