Australia: Warehouse job cuts ahead as supermarkets increase automation

Martin Scott

Australia’s major supermarket chains are expected to outlay around $10 billion in capital expenditure over the next three years, in a bid to drive down labour costs and cash in on the growing online grocery market.

The major component of this investment is in new, highly-automated distribution centres, which will replace smaller warehouses across Queensland, New South Wales and Victoria, destroying thousands of jobs.

Vanderlande automated pallet building system at Melbourne South Regional Distribution Centre (Source: Youtube/Primary Connect)

The motive for this is clear. The forthcoming closure of Woolworths’ Yennora, Minchinbury and Mulgrave distribution centres is expected to cut the company’s wage bill by $135 million per year and bring $65 million in other annual cost savings. Coles’ “Second Century” strategy aims to slash a billion dollars by 2023, relative to 2018 costs.

These sweeping restructuring operations are driven by the profit demands of the companies’ major shareholders, which include the world’s largest banks and investment funds.

The intensifying onslaught on working-class jobs is only possible because of the role played by the unions, particularly the United Workers Union (UWU), which has coverage over most supermarket distribution centre workers. The UWU serves as an industrial police force of management, suppressing any genuine opposition to warehouse closures.

This was expressed sharply in the recent Smeaton Grange dispute, where 350 locked-out workers resisted the union’s campaign to ram through a sell-out enterprise agreement for 14 weeks, before the financial pressure created by the union’s refusal to provide strike pay finally forced a “yes” vote.

The UWU made no attempt to mobilise its members working in other Coles warehouses, ensuring the lock-out had minimal impact on the company’s operations and profits.

The UWU operation at Smeaton Grange was not an aberration, but a pledge from the union to Australia’s major supermarket chains that it will do everything do enforce the cuts they are demanding.

Woolworths, Australia’s largest supermarket chain, several years ahead of major competitor Coles, in terms of automation, is expected to invest more than $1.8 billion in 2021, up from $1.6 billion last year.

In May, the company’s supply chain arm, Primary Connect, began construction of a new National Distribution Centre (NDC) at Moorebank, in southwestern Sydney. The 40,700 square metre facility, set to open in 2023, replacing the current NDC in Mulgrave, Victoria, will feature “wall-to-wall automation” from Dematic, and service more than 1,000 stores.

The Moorebank site will also house a slightly smaller Regional Distribution Centre, fitted out with end-to-end robotised case picking technology from Vanderlande. The warehouse, which will supply around 200 stores, is set to open in 2025.

The location was chosen to allow the company to profit from the federal government’s investment of more than $550 million in the Moorebank Intermodal Terminal, which provides a direct rail link to Port Botany, and an upgrade to the M5 Motorway—Moorebank Avenue intersection.

Woolworths also plans to build a 60,000-square metre fresh food distribution centre in Wetherill Park, to replace its Minchinbury warehouse.

The closure of the existing distribution centres in Yennora, Minchinbury and Mulgrave will destroy 1,350 jobs.

Coles has revealed it plans to spend $1.1 billion this year and $1.4 billion in 2022 on warehouse automation and e-commerce, around 50 percent more than its average capital expenditure in recent years.

The company is building two 70,000 square metre distribution centres, equipped with WITRON automation technology in Redbank, southwest Brisbane and Kemps Creek, western Sydney.

These facilities, set to open in 2023, will replace existing warehouses at Smeaton Grange, Eastern Creek and Goulburn in New South Wales, as well as Forest Lake and Heathwood in Queensland. These closures will result in the destruction of around 2,000 jobs.

Aldi sold its six distribution centres last year to finance the construction of three new automated facilities in New South Wales, Victoria, and Queensland. The discount supermarket chain plans to open the first of these new warehouses in Sydney, in 2024 or 2025.

Metcash, a wholesale distributor that supplies most other Australian supermarkets, will invest $375 million over the next three years in refurbishments, e-commerce and warehouse upgrades. This announcement has prompted criticism from financial analysts, who argue it will not be enough to allow the company to compete with the major chains.

The introduction of sophisticated automation in distribution centres will also impact jobs in retail stores. The new technology is able to build pallets according to the layout of individual supermarket aisles, reducing the amount of back-of-house sorting required. One analyst, quoted by the Australian Financial Review in 2018, speculated: “Woolworths hasn't talked this up ... but they could save four people per store.”

Both Coles and Woolworths are also building smaller automated fulfilment centres to capitalise on the boom in online shopping. Growth in the segment was accelerated with the onset of the COVID-19 pandemic last year, with Woolworths reporting 92 percent growth in the six months to December and Coles 48 percent. Over the same period, in-store sales increased by 9.3 percent for Woolworths, and 7.2 percent for Coles.

Woolworths received planning approval in June for a 20,000-square metre online fulfilment centre in the western Sydney suburb of Auburn. The facility, expected to open in 2024, will operate 24/7 and employ only the equivalent of 250 full-time workers to process 50,000 orders per week, double the rate of manual facilities.

The shift to dedicated online fulfilment centres will lead to job cuts in retail stores, where orders are currently picked and packed from supermarket shelves.

A report conducted by Australian Catholic University (ACU) researchers for the UWU, surveyed workers one year after they were retrenched, when Woolworths closed its Hume distribution centre in 2019. The facility was shuttered, destroying 680 jobs, when the company opened its Melbourne South Regional Distribution Centre (MSRDC), the first of these highly automated warehouses.

Of the 64 workers surveyed in August 2020, 28 percent reported being unemployed, despite nearly one third having applied for more than 30 jobs since the warehouse was shuttered. Only 11 percent were in permanent jobs, while 23 percent were employed through a labour-hire company and 17 percent had found only casual positions. Only one of the surveyed workers did not report a reduction in income after the closure.

The report noted that in August 2016, the official unemployment rate in Broadmeadows, where the Hume warehouse was located, was already at 15.9 percent, more than twice the national average of 6.9 percent. By October the following year, the official Broadmeadows figure had climbed to 26.7 percent. Significantly, the distribution centre was less than two kilometres south of Ford’s car assembly plant, which was closed in October 2016.

Unsurprisingly, given its provenance, the report draws the same conclusion as the UWU—increased automation will inevitably lead to the destruction of thousands of jobs, and there is nothing that workers can do except hope for a slightly improved redundancy package.

The reality is, the UWU, and its predecessor the National Union of Workers, played a key role in the Hume shutdown, suppressing opposition to the announcement and diverting workers’ anger into appeals for improved redundancy payouts and for the company to offer a handful of workers redeployment to the MSRDC, 73 kilometres away.

The union has performed the same function at other distribution centres, including Coles warehouses in Goulburn, slated to close in October, and at Smeaton Grange.

This is among the sharpest expressions of the corporate, anti-working-class character of all the unions. Taking their pro-capitalist and nationalist program to its logical conclusion, they have become thoroughly integrated into company managements, and directly preside over the destruction of jobs and the gutting of conditions.

The unions’ assertions that technological progress, including artificial intelligence and automation, inevitably leads to a worsening of the social position of the working class, is based on the bureaucracy’s support for capitalism and the dominance of social life by the banks and the major corporations.

In reality, the issue is who owns, controls and profits from the technology.

In the hands of the capitalist class, every technological development means a new opportunity to slash labour costs and drive up profits. In the hands of the working class, automation could be harnessed to shorten working hours—without reducing pay—and eliminate onerous tasks, while also increasing productivity, to meet the needs of all.

This would free up precious hours for workers to engage in leisure and cultural activities, profoundly improving quality of life for the entire working class.

This is the perspective for which workers must fight—a socialist future, where the wealth of the billionaires is expropriated and the major corporations and banks are placed under the democratic control and ownership of the working class.

Unemployment Record Now Far Ahead of Recovery from Great Recession

Dean Baker

The July employment report again showed very strong gains in both the establishment and household survey. In addition to showing 943,000 new jobs in July, the numbers for April and May were also revised up substantially so that the average over the last three months is now 832,000. At that pace, we would make up the jobs lost in the recession in seven months.

The 0.5 percentage point drop in the household survey was also impressive. We didn’t get down to 5.4 percent unemployment following the Great Recession (GR) until March of 2015. The Black unemployment rate fell 1.0 percentage points to 8.2 percent, a level not reached following the GR until May of 2016. The unemployment rate for Hispanics dropped 0.8 percentage points to 6.6 percent.

Not all the news in the household survey was positive. The unemployment rate for Black teens rose from its record low level of 9.3 percent to 13.3 percent, but this is still lower than any pre-pandemic level.

Unemployment for Asian Americans Above Level for Whites, Reversing Pre-Pandemic Pattern

The unemployment rate for Asian Americans fell from 5.8 to 5.3 percent, but it is still 0.5 percentage points above the rate for whites. It had generally been slightly lower before the pandemic. It’s not clear whether this is the result of discrimination or small businesses owned by Asian Americans continuing to feel the impact of the pandemic.

Share of Unemployment Due to Quits Rises, but Still Low

The share of unemployment due to voluntary quits rose 0.9 percentage points to 10.8 percent. However, this is still low; it should be around 14-15 percent in a strong labor market. The share of the unemployed who reported being on temporary layoffs fell to 14.3 percent, which is a normal level. It had been over 70 percent during the shutdowns last spring.

Share of Long-Term Unemployed Still High

The share of long-term unemployed (more than 26 weeks) fell 2.8 percentage points in July, but it is still very high at 39.3 percent. It was only above this level in the recovery following the Great Recession.

Unincorporated Self-Employed Rises in July

The number of people who reported being unincorporated self-employed rose by 425,000 in July, which puts it almost 800,000 above the 2019 average. This could mean many people are starting small businesses as a result of changes in their situation in the pandemic.

Women Accounted for Most of the New Jobs in July

Women accounted for 649,000 of the new payroll jobs in the month. Their share of payroll employment is now 49.9 percent. It had been just over 50.0 percent before the pandemic.

Hardest Hit Sectors Were Big Job Gainers

Local government education added 220,700 jobs, restaurants added 253,200 jobs, hotels added 73,700 jobs, and arts and entertainment added 53,000 jobs. However, employment in all four sectors remains well below its pre-recession level. In percentage terms, the hardest hit sector is motion pictures. It added 17,800 jobs in July, but jobs in the sector are still 30.2 percent below its pre-recession level. Manufacturing and construction both had good gains in the month, adding 27,000 and 11,000 jobs, respectively.

Nursing Homes Continue to Shed Jobs

Nursing homes shed another 1,500 jobs in July, which puts employment 215,600 (13.6 percent) below the pre-pandemic level. This is likely due to the difficulty in finding workers and also reduced demand as the result of many nursing home deaths in the pandemic.

Mixed Evidence on the Labor Shortage Story

The Employment Cost Index (ECI) for the second quarter showed that many of the claims about soaring labor costs were not true. The ECI rose just 0.7 percent in the quarter and is up just 2.9 percent over the last year. However, wages do appear to be rising rapidly at the bottom.

Pay for production and nonsupervisory workers in leisure and hospitality is up 13.0 percent from its year-ago level. It has been rising at an annual rate of 24.3 percent for the last three months (May, June, and July) compared with the prior three months (February, March, April).

The average hourly wage overall is up 4.0  percent for the last year. That is somewhat more rapid than the pre-pandemic clip but can certainly be supported by the rapid productivity growth we have seen in the pandemic. It is important to remember that there was a large shift from wages to profits in the first quarter.

Hours Are Little Changed

There was little change in the length of the average workweek, another piece of evidence for a labor shortage. Average weekly hours for production workers were unchanged in July at 34.2. This is up from 33.7 pre-pandemic, but below the 34.4 peaks in Jan and March. In leisure and hospitality, average hours increased by 0.2 hours to 25.3, the same as the high reached in April.

Very Solid Jobs Report

The job growth figure was again better than most economists had predicted. It appears that the spread of the Delta variant had not had a major impact on the labor market, at least through the middle of July. If its spread can be contained we will likely continue to see strong job growth, coupled with declines in unemployment.

Trudeau appoints loyal servant of ruling elite to Canada’s Supreme Court

Hugo Maltais

Canadian Prime Minister Justin Trudeau appointed Ontario Court of Appeal Judge Mahmud Jamal to the Supreme Court of Canada on June 17 as the replacement for Rosalie Abella, who had reached the mandatory retirement age of 75. Justice Jamal took office July 1.

Justice Jamal’s appointment was welcomed by the political establishment, the corporate media and the legal community across Canada, with his South Asian ethnic background inevitably cited as bringing much needed “diversity” to the country’s highest court. Born in Kenya in 1967 to parents of Indian descent, Jamal is the first Justice of “color” in the history of the Supreme Court. The fact that he is also bilingual has pleased Quebec nationalists.

By focusing reactions to Jamal’s appointment on his ethnicity, the ruling elite seeks to cover up the main reason he was chosen—that he has proven throughout his career to be a faithful representative of the Canadian corporate elite.

Justice Mahmud Jamal (Photo Credit : Canada Supreme Court website)

After a detour through England, Jamal’s family settled in Edmonton, Alberta in 1981. He has made much of his immigration and ethnic minority status. In a pre-appointment questionnaire and his appearance before parliament’s Justice and Human Rights Committee, he spoke of the discrimination he had experienced and the challenges he faced as an immigrant.

However, Jamal has not shared the experience of the majority of immigrants in Canada as exploited workers in low-paying jobs who struggle to make ends meet. As a Supreme Court justice, he will earn $379,900 per year, not including other benefits, a salary that places him comfortably in the top one percent of Canadians.

His career path is one of privilege and reward for services rendered to the Canadian ruling class.

After graduating from one of Edmonton’s top high schools, Jamal studied at the London School of Economics, the University of Toronto’s Trinity College, McGill University and the prestigious Yale University. He was called to the Ontario Bar in 1996 and began practicing at Osler, Hoskin & Harcourt, a prestigious national law firm that charges hundreds of millions of dollars in fees each year to its wealthy clients. He became a partner in the firm in 2001 and remained there until his appointment to the Ontario Court of Appeal by Trudeau in 2019.

Jamal’s annual salary while at Osler has not been made public, but the average compensation for Canadian associate lawyers is estimated at $217,000 per year. There is no doubt that the compensation for a high-profile lawyer in the Toronto head office of a firm such as Osler would be much higher and likely reached $1 million per year.

In addition to this privileged lifestyle, his career in private practice has brought him into close contact with the financial and business elite. The clients he represented before the courts are a veritable Who’s Who of Canada’s corporate elite. They include all the major Canadian banks and their lobby group, the Canadian Bankers Association, major insurance companies, Dell (a personal computer manufacturer and the 34th largest company in the world, according to Fortune 500), mining companies Placer Dome Canada (which owned 16 mines in seven countries when it was bought by Barrick Gold in 2006) and Inco (which was bought by Brazilian giant Vale in 2006 and whose Ontario operations were recently the scene of a militant strike ), General Motors of Canada, Petro-Canada and Honeywell (the fourth largest conglomerate in the world with a market value of over $160 billion).

It is sufficient to mention a few specific cases to demonstrate that Jamal was willing to do anything to serve the parasitic class that runs Canada:

*Class action lawsuits against tobacco companies

For more than a decade and until his appointment to the Ontario Court of Appeal, Jamal represented Imperial Tobacco Canada (IT) in a class action lawsuit that resulted in his client and two other tobacco companies being ordered to pay more than $15 billion in moral and punitive damages, the highest damages ever awarded in Quebec judicial history. The Quebec Superior Court found that the three major tobacco companies (IT, JTI-Macdonald and Rothmans, Benson & Hedges) were responsible for nicotine addiction and fatal diseases among Quebec smokers. The evidence showed, among other things, that these companies knowingly concealed scientific information they had held since the 1960s about nicotine addiction and the link between smoking and lung cancer.

Jamal’s client was ordered to pay substantially more damages than the other two tobacco manufacturers because of its “particularly unacceptable behavior.” Among other things, IT destroyed incriminating documents during the legal process to avoid having to produce them as evidence.

Since the 2015 Superior Court ruling, the three manufacturers have done everything they can to avoid paying the amounts owed to their victims and the families of those who died. They launched an appeal, which was rejected by the Quebec Court of Appeal while Jamal was still IT’s attorney, and began a restructuring under the protection of the Ontario courts that will likely allow them to pay only a tiny portion of the $15 billion, if anything at all.

*KPMG and tax avoidance

Jamal represented the accounting firm KPMG in a tax avoidance case after the Canada Revenue Agency (CRA) uncovered a shell company scheme set up in the early 2000s to allow dozens of its multimillion-dollar clients to hide money in the tax haven of the Isle of Man. KPMG has not been charged with anything, even though the firm profited handsomely from the scheme it created, by claiming a percentage of the taxes it “saved” for its clients. In order to recover the money, the CRA asked KPMG to provide the names of its clients. KPMG, represented by Jamal, refused and dragged out the case for years despite several court defeats. The company used a wide range of legal delaying tactics to shield a bunch of multimillionaire crooks from any repercussions and allow them to keep their ill-gotten gains.

*Imperial Oil’s attack on pensions

In 2009, Jamal represented Imperial Oil Limited, the Canadian subsidiary of oil and gas giant ExxonMobil, in a dispute with Ontario’s pension regulator. The regulator demanded that 409 employees, who were laid off or retired early, be removed from the company’s pension plan and transferred to an annual pension scheme managed by a licensed insurance company. Feigning concern for the employees it had thrown out without hesitation in previous restructurings, Imperial Oil challenged the regulator’s decision on purely economic grounds: It would have cost $16.5 million to create the annuity, and the company would have had to replenish the pension fund. During the hearing, in the presence of several pensioners, Imperial Oil sought to apply pressure by threatening to terminate the pensioners’ insurance if it lost the case. The court ruled in favour of the company.

Judge Jamal has thus spent his career faithfully serving the ruling class, its banks, its large corporations and its wealthy shareholders. The emphasis on his ethnic minority background serves to cover up his role as a staunch defender of big business and to give a “progressive” veneer to an entirely reactionary appointment. It is also meant to bolster the reputation of the Trudeau Liberals as promoters of “multiculturalism” and self-proclaimed opponents of racism.

Courtroom in the current Supreme Court building (Image Credit Jamie McCaffrey/ Wikimedia CC2.0)

The fraudulent nature of this perspective becomes even more apparent if one examines the similarity of Justice Jamal’s profile to that of the last judge appointed by Stephen Harper’s right-wing Conservative government in 2014, Suzanne Côté.

Côté was also a wealthy partner at Osler, who spent her career representing banks and big business. She even defended Imperial Tobacco alongside Jamal. To avoid any discussion of her role as a legal mercenary for the ruling class, media coverage of her appointment focused on the fact that she was the first woman to have been appointed to the Supreme Court directly from a private firm. Côté's “feminist” appointment was even endorsed by the supposedly “left-wing” New Democratic Party.

Since her appointment, Côté has proven to be one of the most right-wing judges on the Supreme Court. This confirms once again the reactionary nature of identity politics, which downplays the central class divisions in society in favor of superficial distinctions of gender, ethnicity, language, religion or sexual orientation.

Identity politics is being promoted by powerful sections of the ruling elite to divert attention from growing social inequality under conditions of intensifying class conflict. It also serves to solidify the support of affluent sections of the middle class for the profit system by offering them access to well-paid positions in government, the corporate boardroom or academia on the basis of their identity.

One can say with certainty that the newly-appointed Justice Mahmud Jamal, notwithstanding all the hype about his ethnicity, the colour of his skin, and the importance of “diversity” and “inclusion,” will prove to be yet another implacable defender of big business and bitter opponent of the working class on Canada’s highest court.

Homelessness more than doubles as Irish housing crisis worsens

Dermot Quinn & Steve James

According to housing charity Focus Ireland, there are currently almost 8,000 people homeless in the Republic of Ireland. The number of homeless families has increased by 232 percent since July 2014. Currently, 928 families rely on emergency accommodation.

These figures do not include mainly young people living in squats or forced to “sofa surf” with friends because of spiraling rents. At root, the problem is soaring private rents as every form of accommodation is squeezed to extract the largest possible revenue stream by the financial oligarchy.

This year rents have soared further. Latest statistics from the Irish Central Statistics Office (CSO) show that a couple or single person would have to be earning up to €10,000 a month to rent in the capitol, Dublin where the average rental of a three bedroom house is €3,713. To buy a house in Dublin a worker would need to earn nine times the average industrial wage. Irish Banks now charge the highest mortgage rates of any country in the European Union. Dublin has the fifth longest average commute time in Europe—nearly one hour—after Budapest, Amsterdam, Paris and London, because of soaring housing costs.

Workers with a mortgage, renting, residing in or waiting for very limited social housing have all suffered under a system which has seen vast fortunes made by land speculators and “cuckoo” fund housing investors. Known officially as Real Estate Investment Trusts (REITs). these property investment companies were introduced in Ireland in 2017 by the then Fine Gael/Labour government. REIT speculators have made hundreds of millions of profit on the backs of working people's housing needs over the past decade. Benefiting from generous tax breaks, they buy up chunks of, or in some cases entire, suburban housing estates and then let them out at exorbitant rents. REIT rules require that over 80 percent of net rental profit must be distributed back to shareholders in the form of a dividend. REITs own around €3.7 billion worth of property in Ireland alone.

Irish Residential Properties Real Estate Investment Trust (IRPRE) is one such company and is now the country's largest residential landlord, owning more than 3,688 homes in Dublin and Cork. IPRE increased profits on rent by 32 percent to €58.3 million over the past year. IRPRE concentrate on two- and three-bedroom apartments, the vast majority of which cost between €1,000 and €2,500 per month to rent.

More outrage was generated in May, after it was reported that one investment outfit, British based Round Hill, pounced on a building development in Maynooth, Co Kildare, and bought up 115 newly built homes.

Round Hill describes itself as a “leading residential investor, developer and asset manager” and manages 110,000 “units” across Europe and the US. It “is currently one of the largest private landlords in multiple European countries”. The company moved into Ireland in 2018 armed with €1 billion to deploy in buying up property and the “build to rent” market. It has subsequently bought housing estates and blocks of flats across the island, part of a private rental boom in 2020 in which €1 billion worth of residential property was sold to big investors.

Round Hill is also a player in the lucrative student housing market and currently owns or is building student housing blocks in Cork and Dublin. Across Europe, Round Hill owns student accommodation in Ireland, UK, Germany, Portugal and the Netherlands. Currently student rooms in Cork are available for from a staggering €231.15 a week for 51 weeks.

Earlier this year, ensuring the flow of rental income of the REITs, Micháel Martin's three party coalition government made up of Fianna Fáil, Fine Gael and the Green Party, dropped the limited protection from eviction introduced last year in the Residential Tenancies Act 2020 at the height of the pandemic. From April 23, according to housing charity Threshold, over 1,000 evictions delayed in 2020, can now proceed. Hundreds of evictions were pushed through during the pandemic anyway.

Micheál Martin (credit: Wikimedia Commons)

Fine Gael Finance Minister Paschal Donohoe responded by bringing forward to the Dáil cosmetic changes designed to placate public anger. These included a 10 percent stamp duty on bulk purchases of properties by housing speculators. But the tax did not cover apartments. The following week Martin's government introduced huge tax breaks to investment funds leasing homes to local authorities.

Both Fine Gael and Fianna Fáil are notoriously close to the speculators who control the building industry. As far back as 1997, the Fianna Fáil government dropped any requirement for local authorities to build social housing. The Planning and Development Act in 2000 brought in by the same government enabled developers to buy exemptions from any ongoing social house building.

The housing boom has also seen an epidemic of shoddy construction. In June this year, 45 bus loads of protestors travelled from counties Donegal and Mayo to protest the miserable state of their homes. Around 5,000 homes are crumbling due to the use of substandard building blocks that contain high levels of muscovite mica, a mineral which absorbs water, causing concrete to crack and crumble. The government has offered compensation to homeowners, but only if they pay €5,000 for a housing survey, which many cannot afford.

Some of the worst housing defects date from the “Celtic Tiger” era housing boom. A Construction Defects Alliance of 400 or so homeowners saddled with unsalable shoddy and dangerous apartments reckons that as many as 100,000 homes have been built with elementary fire safety and construction faults, of which 21,000 have so far been identified.

Typical are recently publicised faults at the Park West apartments in Dublin, consisting of 257 flats built in 2003. Earlier this year residents were informed their flats, some costing over €400,000, had no fire stopping in common areas and inside apartments. Balconies are defective and the entire fire alarm system needs replaced. Total cost was estimated at around €5 million, which is likely to fall on the residents as builders are only liable for the first six years after construction is completed. In total the bill for faulty construction could run to over €1 billion.

The main political beneficiary of the housing crisis is Sinn Féin, the bourgeois nationalist opposition party, with opinion polls reporting that its support has grown since its dramatic election breakthrough last year. Sinn Féin support, 24.5 percent last year, is now recorded at 31 percent. The Irish Labour Party also won a recent by election in Dublin Bay South in the seat of former housing minister Eoghan Murphy. Neither Sinn Féin, the Labour Party or their pseudo-left satellite, People Before Profit, pose any threat to the interests of the ruling elite or offer any viable alternative to workers. The value of Sinn Féin’s posturing on housing, as on all social questions, can be measured by the party's aspiration to join a coalition government with either Fine Gael or Fianna Fáil, who form the current coalition, along with the Green Party.

Pedro Castillo’s rise to the presidency intensifies Peru’s crisis

Cesar Uco & Bill Van Auken

Since being sworn in as president of Peru on July 28, Pedro Castillo, the rural teacher and former strike leader, has sought to prove himself as a defender of private property and foreign investment.

Castillo won the presidency with the vote of the poorest and most exploited regions in the Andes and southern Peru. The narrow victory of just 44,000 votes over his far-right rival, Keiko Fujimori, daughter of the now imprisoned ex-dictator Alberto Fujimori, reflected deep and explosive divisions in a country dominated by social inequality and ravaged by the COVID-19 pandemic.

Opposed by decisive sections of the Peruvian ruling oligarchy and portrayed by the media and his right-wing opponents as a “communist” and “terrorist sympathizer,” Castillo is already signaling the bourgeoisie that his government—his populist promises notwithstanding—can be trusted to suppress any threats to profit interests or disruption of law and order.

Peru's President Pedro Castillo, center, and his Defense Minister Walter Ayala arrive for a military parade in Lima, Peru, Friday, July 30, 2021. (AP Photo/Guadalupe Pardo)

On his fourth day in office, August 2, Castillo sent his prime minister, Guido Bellido, to the province of Chumbivilcas in the department of Cusco, with the mission of ending a strike by seven peasant communities against the Chinese mining consortium, MMG Las Bambas, a US$5 billion investment. Bellido’s intervention succeeded in securing a 60-day suspension of the indefinite strike that threatened the export of copper to China. His mission to pacify the angry peasants was also aimed at blunting the right-wing media’s vilification of him as a “communist” and an enemy of private property.

The peasants had begun an indefinite strike on July 24 after suffering repression at the hands of the police, leaving six women and 10 men wounded by gunfire and tear gas bombs.

The betrayal of the peasants’ struggle, summed up in Bellido’s announcement that their demands “are not easily resolved,” has a precedent in the recent history of Peru. Four months after taking office, former President Ollanta Humala (2011-2016) betrayed a peasants’ struggle against another transnational seeking to exploit the Conga mining deposit. The episode defined the reactionary character of Humala, who, like Castillo, campaigned for the presidency based on nationalist and populist slogans along with vague promises of a redistribution of wealth.

Castillo, meanwhile, has rushed to reassure foreign investors. Reuters reported that the new president “has met with the Chinese ambassador and Chinese mining executives to discuss not just policies for their industry but also to strengthen a previous free trade agreement first signed in 2009.”

His meeting with Chinese investors was well received in international financial circles. “This doesn’t have an ideological character, this has a pragmatic character,” Jorge Heine, a professor of international relations at Boston University and a former Chilean ambassador to China, told Reuters.

Reuters added: “In addition to China, Peru also has a free trade agreement with the US and has been considered for decades a US ally.” The US ambassador was the first to recognize and congratulate Castillo after he was declared the elected president.

Castillo has pledged to impose additional taxes on the super profits of the transnational mining corporations to fund increased health and education spending. China has surpassed the US as Peru’s top trade partner. “Mining tax policy will be crucial to China, whose companies are important copper miners in Peru, the world’s No. 2 producer of the metal,” says Reuters.

The Anglo American PLC mining corporation’s chief executive Mark Cutifani dismissed any threats to profits from the new government, stating on Thursday that his company’s interactions with the incoming Castillo government had been “pretty positive.”

Castillo has further attempted to calm the financial markets with the appointment to two key ministries of individuals acceptable within Peru’s ruling establishment: Pedro Francke as Minister of Economy and Finance (MEF) and Aníbal Torres as Minister of Justice and Human Rights (MinJus).

Francke, a professor at the Pontificia Universidad Católica del Perú and former World Bank official, served as Castillo’s emissary to Peruvian capitalists along with Wall Street and foreign investors during the run-off election contest, assuring them that he would carry out no nationalizations or any other inroads on private property.

Aníbal Torres is a professor at the Universidad Nacional Mayor de San Marcos. Since Castillo’s placing first in the first round of the election on April 9, Torres has served as Peru Libre’s main legal advisor in confronting the protracted and unfounded claims of election fraud brought by the camp of his rival, Keiko Fujimori.

The appointment of Francke and Torres followed Castillo’s naming a cabinet comprised largely of provincial and inexperienced politicians, some belonging to the inner circle of Vladimir Cerron, the founder of the party that ran Castillo for president, Perú Libre. It is a corrupt regionalist party that employs pseudo-Marxist rhetoric, along with a reactionary social agenda, to appeal to the indigenous population’s deep hostility to the ruling elite based in the capital, Lima.

Perú Libre originated in 2008 under the name of Regional Political Movement Peru. Cerron is facing corruption charges for heading during his governorship of the department of Junín (2011-2014, 2019-2020) the gang known as “Los Dinámicos del Centro,” which engaged in influence peddling and the illegal sale of drivers’ licenses.

Wearing his traditional straw hat and suit with indigenous designs, Castillo used his inaugural speech to declare that “foreign criminals will have 72 hours from today to leave the country.” He also attacked unemployed youth saying, “Young people who do not study, or work, will have to go into military service.”

The first statement was meant to scapegoat immigrants—more than a million Venezuelans have come to Peru—for rising unemployment, hunger and crime. The second was a clear threat that the new government will not tolerate uprisings of the youth nor of the working class and the poor.

Still fresh in the memory of the youth is the attack they suffered at the hands of the National Police in November of last year, when they rebelled against the attempt of the president of Congress, Manuel Merino, to take over the presidency of the republic, after the Congress ousted President Martín Vizcarra in a parliamentary coup. Police shot two young protesters to death and wounded over 100 more.

A series of strikes and demonstrations have broken out throughout the country in recent months, including a 48-hour strike last week in protest over the increase in prices of basic foodstuffs that left the city of Cuzco without public transportation. There have also been revolts in mining areas, plus multiple road blockades by peasant communities complaining about the devastation of their lands by mining transnationals.

Castillo called on the ronderos, peasant security patrols, to collaborate with the police in the fight against crime, while “respecting their autonomy.” The ronderos developed as an arm of counterrevolutionary repression during the dirty war waged under the Peruvian dictator Alberto Fujimori against the Sendero Luminoso, a Maoist guerrilla movement. Together with the army, they engaged in war crimes against the civilian population. Castillo’s bid to incorporate them into the repressive apparatus of the state, reportedly to include government funding, threatens to further the consolidation of a police state.

In his speech, Castillo also emphasized opening the schools beginning in 2022, thus ignoring the imminent threat of a third wave of the coronavirus. In Peru, the Delta strain has already been detected in the capital, Lima, and the most populous city in the south of the country, Arequipa. The coronavirus pandemic has already claimed the lives of 200,000 citizens, leaving Peru with the highest death rate per million inhabitants in the world and more fatalities in absolute numbers than Russia, the UK, Italy or France.

The rabidly anticommunist sections of the Peruvian bourgeoisie, having failed in their efforts to overturn the election, are now concentrating their fire on Castillo’s cabinet, claiming its members are incompetent, corrupt and sympathizers of Sendero Luminoso. Leaders of the right-wing majority in the Congress have threatened to not ratify their nominations, including that of Castillo’s prime minister, Guido Bellido.

They have also singled out Castillo’s nominee for foreign minister, Héctor Béjar, an 85-year-old university professor who participated in a short-lived Castroite guerrilla movement in the 1960s. He has aroused the ire of the right by stating that the Castillo government will withdraw from the Lima Group. Originally comprised of 11 Latin American countries and Canada, the group was formed in 2017 to support Washington’s regime change campaign against Venezuela. Mexico, Argentina and Bolivia have already withdrawn from the group.

Behind the attacks on the cabinet appointments, the Peruvian right, which controls the Congress, is preparing the ouster of Castillo himself. Right-wing politicians are increasingly raising the prospect of Congress declaring a “presidential vacancy” based on the supposed “moral incapacity” of Castillo to hold the office.

Several hundred demonstrators gathered in Lima’s Plaza San Martín Saturday to demand Castillo’s immediate ouster, while appealing to the Peruvian armed forces to intervene.

When this same form of constitutional coup was carried out last November to remove President Martín Vizcarra, it triggered the largest demonstrations in Peru in the last two decades, forcing the congressional leader designated as Vizcarra’s successor to resign. The removal of Castillo by these methods would likely ignite far greater upheavals.

If Castillo’s government survives these challenges, its ascendance will not signify a revival of Latin America’s “Pink Tide” and a new era of social reforms, even of a minimal character. Having guaranteed the sanctity of private ownership and the interests of the mining transnationals, its policies will be dictated by the Peruvian bourgeoisie and the international markets, even as the Peruvian right and the military prepare a coup.

“Younger, sicker, quicker”: Doctors plead for vaccinations as US hospitals fill with young patients

Norisa Diaz

As the Delta variant of coronavirus continues to overwhelm the globe, a growing number of young people in their twenties, thirties, and forties are being intubated and succumbing to the virus, particularly in the poorest states in the Southern United States where vaccination numbers are the lowest. The phrase now used by doctors to explain this new stage of the pandemic is “younger, sicker, quicker.”

With many states breaking infection records daily, Florida is the epicenter of the crisis in the South. On Saturday, Florida reported 23,903 new cases of COVID-19 in a 24-hour period, raising the state’s total number of cases to 2,725,450. The Florida Hospital Association reported a record high for the state's hospitalization rates, with 13,348 patients hospitalized as of Saturday.

According to figures from the Centers for Disease Control and Prevention (CDC), more than 80 percent of people between 65 to 74 are fully vaccinated, but the figure is less than half of that for ages 18 to 39. Across the South, cases are skyrocketing and the trends are toward a lower age group—particularly among those ages 18-49, who now make up 50 percent of all cases.

A medical student performs an endotracheal intubation on a dummy. (AP Photo/Aaron Favila)

Doctors and healthcare staff throughout the region are pleading for the population to get vaccinated. Compared to an earlier time in the pandemic when the majority of deaths were among the elderly, health care staff are seeing large numbers of young people in the prime of lives, often parents with young children, succumbing to the virus.

Dr. Brytney Cobia of Grandview Medical Center in Birmingham, Alabama made an appeal in a Facebook post, stating that “One of the last things they do before being intubated is beg me for the vaccine,” Cobia wrote. “I take them by the hand and tell them I’m sorry, but it’s too late. A few days later, when I call the time of death, I hug [their] family members and tell them that the best way to honor your loved one is to get vaccinated and encourage everyone you know to do the same. “

In disbelief at their loss, Cobia stated that patients and their families explain to her the various reasons that discouraged them from taking a vaccine: “They tell me they didn’t know. They thought it was a hoax. They thought it was political. They thought that because they had a certain blood type or a certain skin color, they would not get as sick. They thought it was ‘just the flu.’ But they were wrong. And they wish they could go back. But cannot.”

Alabama and Mississippi have the lowest vaccination rates in the nation with only 35 percent of residents fully vaccinated against COVID-19, according to data from Johns Hopkins.

In another powerful statement, Dr. Michael Bolding at Arkansas’ premier Washington Regional Medical Center recently made an impassioned plea in a Facebook video to beg Arkansas residents to get vaccinated, describing the conditions faced in the hospitals. “Recently I’ve seen a dramatic rise in twenty-year-olds and thirty-year-olds, unvaccinated patients, who are not coming in to the ER requiring a little bit of oxygen and being hospitalized for a day or two, but younger healthier patients with no comorbidities ending up on ventilators, BiPAP, high flow oxygen and extremely sick.

“I have had to call multiple mothers and fathers of preschoolers in their 20s and 30s and tell them that their spouse may not survive this hospital stay. I cannot explain in words the fatigue that your local hospital providers have right now.

“What I really wish you could see, is to look into the eyes of a young father or a gentleman who knows that they may be short for this world because they didn’t get their vaccine, and the regret and remorse on their face—and fear. I can’t show you, I can’t describe, it will certainly be with me forever, but that look on a patient's face would be more motivating than anything to go ahead and get your vaccine if you have not already.”

Scott Harris, chief executive of the Alabama Department of Public Health told the Washington Post, “We find that there’s a lot of mistrust with messages that come from state government, from public health, in particular, from the media,” he said. “It’s just a multilayered problem. There’s just a lot of different people who have a lot of different reasons for not getting the vaccine. And it’s just hard to address them in a big way.”

In Tulsa, Oklahoma, Dr. Ryan Parker, chief of emergency medicine for Saint Francis Health System, told the Tulsa World, “I’ve had a lot of ‘I was going to wait and see what it did for other people,’ ‘(see) if other people had side effects,’ or ‘there are too many unknowns.’”

“My youngest patient is 20 years old. So 20s to 50s is a very common age group right now, which is very scary,” added Dr. Kamran Abbasi. “It breaks my heart. We’ve got people coming to the ER, and I’m admitting them to the hospital. They realize this is worse than they thought it was going to be—whatever perception they had of COVID was incorrect. Now they’re here and they feel horrible and they’re terrified.”

Dr. Mike Angelidis, chair of Saint Francis’ hospitalist services and chief of internal medicine, stressed, “There is so much ‘wait and see,’” and confusion about side effects with regards to the vaccine. “What I try to tell patients is that this is different than any other vaccine we’ve had in a lot of ways, and one of those ways is the widespread use of it. There is so much research and data on these vaccines. But they already have these ideas about it ... Where are they getting their information from, and why are they so scared? It’s very frustrating.”

In addition to the impassioned pleas from frontline doctors and healthcare workers, a growing number of parents who have lost their children are speaking out.

Christy Carpenter of Alabama lost her 28-year-old son Curt, who was also unvaccinated. She told the Washington Post that her family had not received the vaccine because they had concerns about how soon it was rolled out. She said her son was healthy prior to catching the virus, and that he initially believed the pandemic to be a “hoax.” She said his last words were: “This is not a hoax, this is real.”

In St. Louis, Missouri, Kimberle Jones lost her 37-year-old daughter Erica Thompson, who was a mother to three boys, ages 8, 11 and 17, now orphaned. “I just watched my baby slipping away from me every day,” Jones told KCRG News. Thompson was in the hospital for a total of 50 days. She died July 4. “The doctor basically called and told me that she got to go on the ventilator or she’s going to die,” Jones said.

“My daughter was not vaccinated and I really do believe, I really do believe had she been vaccinated that she’d still be here with me today,” Jones added.

Father of five, Michael Freedy, 39, contracted the virus after going on holiday with his fiancée Jessica DuPreez. He died in hospital, where he was placed on a ventilator, on Thursday. Freedy sent DuPreez a heartbreaking message before dying of COVID-19 in hospital: “I should have got that damn vaccine.” Freedy leaves behind five children—the youngest of them just 17 months old.

In Los Angeles, 34-year-old Stephen Harmon died last week from COVID-19 just weeks after expressing his opposition to taking the vaccine. Dr. Oren Friedman, who treats COVID-19 patients at Cedars-Sinai Medical Center, told KCBS-TV the hospital has seen a tenfold increase in COVID-19 admissions, and that “Virtually every single person that is getting sick enough to be admitted to the hospital has not been vaccinated.”

“I can tell you that for the respiratory therapists and nurses and doctors that are having to go into rooms and take care of patients who are this sick at this stage—and to know that it’s preventable if people simply had taken the vaccine—it is an awful feeling of PTSD and frustration,” Friedman added.

The influx of young people admitted to hospitals includes not only adults, but large numbers of children, still too young to get vaccinated. For the week ending July 29, the American Academy of Pediatrics reported an 84 percent increase in new COVID-19 cases among children. Numerous hospitals have reported a large number of admissions of children and youth, with dozens in intensive care units and on ventilators.

The British medical journal The Lancet recently reported that 1.5 million children have been orphaned in the pandemic. The current deaths are even more tragic as the virus is cutting down young people and parents of young children in the prime of their life.

US Senate nears passage of infrastructure spending bill

Patrick Martin

Infrastructure legislation backed by the Biden White House and a substantial section of Senate Republicans cleared several procedural votes on the weekend and was set for final passage through the Senate by midweek. A bill to limit debate passed the Senate by 67-27 on Saturday, a second such vote passed Sunday by 68-29, and a vote to waive budget rules passed by 64-33 on Sunday evening.

The legislation would provide about $1 trillion to repair crumbling roads and bridges and shore up other critical pieces of economic infrastructure, including the electrical grid, water system and internet connections. Barely half the funds provided in the bill represents new money—about $550 billion in all—while the remainder represents reallocation of funds already appropriated by Congress, either in the $1.9 trillion American Rescue Plan enacted in March, or the series of bailouts and emergency measures passed last year under the Trump administration.

For example, $50 billion in spending under the Infrastructure Investment and Jobs Act comes from federal supplemental unemployment compensation, provided under the American Rescue Plan, which two dozen Republican-run state governments refused to spend when they terminated the supplemental benefits earlier this summer, in advance of the official September 6 cutoff.

Senate Majority Leader Chuck Schumer, D-N.Y. (AP Photo/Jose Luis Magana)

Another $50 billion is to come from recouping “fraudulent” unemployment compensation payments in 2020 and this year under the various federal supplemental programs. In plain English, impoverished and jobless workers will be hounded by debt collectors employed by the Biden administration to give back money they are retroactively deemed ineligible to receive.

The 11 Republican senators who negotiated the legislation with the Democrats flatly rejected even a penny’s increase in taxes on the wealthy and big business, and the Biden White House and Senate Majority Leader Chuck Schumer capitulated in order to obtain Republican support for the legislation.

This is essence of the “bipartisanship” hailed by the corporate media and touted by President Biden as his preferred approach. The Republicans dictate, while Democrats cite the necessity for bipartisanship as their pretext for moving ever further to the right.

Senate Minority Leader Mitch McConnell joined the faction of Republicans who voted for the infrastructure bill, but a majority of his caucus followed the advice of ex-president Donald Trump, who demanded rejection. In a fascistic statement issued before the vote, Trump ranted, “No deal is better than a bad deal. Fight for America, not for special interests and Radical Democrats. RINOs [Republicans in Name Only] are ruining America, right alongside Communist Democrats.”

Despite White House boasts that the bill will generate jobs, the total will hardly make a dent in the overall US economy, since it is only one-tenth the size of the $6 trillion in new spending authorized last year under the Trump administration, in the CARES Act and subsequent legislation. Most of these trillions went to bailing out Wall Street and corporate America, while a pittance was provided to workers and the unemployed.

While the amount of the investment in roads, bridges, water pipes, ports and internet connectivity is invariably described in the media as “huge” and “massive,” the actual scale is far more modest. The spending is spread out over five to ten years, meaning that $550 billion in new money averages under $60 billion a year—less than one-tenth of what the Pentagon spends every year on the vast US military establishment.

Thus the $110 billion for roads and bridges averages to $11 billion a year, compared to a recent industry estimate that $231 billion each year is required to maintain existing roads and bridges and repair those in poor condition.

Similarly, $39 billion for public transit is spread over ten years, and would not even cover the deficits and capital needs of the largest US system, the Metropolitan Transportation Authority, which serves the New York City area, let alone the needs of dozens of other transit systems around the country.

The budget for water infrastructure, including a much-touted plan to replace all lead piping in the country to avoid new catastrophes like that in Flint, Michigan, was cut in half, from an initial proposal of $111 billion to $55 billion, or $5.5 billion a year—less than half what the Pentagon spends on a single new aircraft carrier.

It is same with airports ($25 billion) and seaport infrastructure ($17 billion). No doubt these are socially necessary, but the amounts spread over ten years are pathetically small. There will still be pockmarked runways and ports choked with debris when this legislation has run its course.

Such comparisons demonstrate the vast scale of the unmet social needs in America, for which this bill is barely a Band-Aid, let alone a down payment.

Many of the provisions of the bill are nothing more than boondoggles for construction companies and other giant enterprises, whose lobbyists outside Congress and representatives in the Senate itself have spent the last week drafting special provisions in the 2,700-page bill that will benefit their corporate patrons.

Significantly, the White House aide who headed the negotiations with the Republican is Steve Ricchetti, a former corporate lobbyist who joined Biden’s vice-presidential staff in 2012 after many years as a representative of hospital chains, the pharmaceutical industry, and telecommunications companies.

There is another and quite sinister aspect of the infrastructure bill: many of its provisions are aimed, not at improving the lives of ordinary Americans, or even at improving the transportation facilities required by American corporations. They are instead part of a process of “hardening” American society in preparation for a full-scale military confrontation with China.

This certainly is a major purpose of such measures as $73 billion for the electrical power grid, including a transition from above-ground to underground lines, the $50 billion to help communities ward off cyber attacks, and the $65 billion to improve internet speeds to the level that would be required for effective American military operations in every part of the US.

Biden has made little effort to disguise the anti-Chinese thrust of much of the spending he has proposed, particularly in the area of electrical vehicles and cyber industry. Senate Republicans agree. One of the amendments still outstanding, and expected to come to a vote, is their proposal to add $50 billion to the Pentagon budget, for construction of “infrastructure” on US military bases.