Australian Labor Party backs government’s tax cuts for the wealthy

Mike Head 

The Australian Labor Party demonstrated its support for even greater social inequality and enrichment of the wealthiest layers of society by voting for the Liberal-National Coalition government’s income tax cuts in both houses of parliament this week.

By voting for the Coalition’s plan, Labor further repudiated its bogus May 18 election campaign rhetoric against “the big end of town” and for a “fair go” for working people. Billions of dollars will be handed to the top 5 percent of the population—those taxpayers receiving more than $200,000 a year—while the millions of low-paid workers, students and welfare recipients trying to live on less than $41,000 a year will get nothing.

By 2024, according to Treasury estimates, a dual-income household on $400,000 will enjoy an annual tax cut of $23,280, but a single person on $30,000 will receive just $255, or $5 a week.

Labor’s vote is not an aberration. Over the past three decades it has assisted the corporate elite to slash taxes for the rich at the direct expense of the social conditions of the working class and basic services. As documented by this week’s latest International Labor Organisation social inequality report, this assault in Australia and globally has shrunk workers’ share of income internationally for the past three decades.

In fact, the three-stage tax package that sailed through the Australian parliament in just two days this week constitutes the biggest bonanza for the rich since the Hawke and Keating Labor governments of 1983 to 1996. Working hand-in-glove with the trade unions, those governments spearheaded the imposition of this process in Australia by cutting the top income tax rate from 60 percent to 49 percent, and the company tax rate from 49 to 33 percent.

Prime Minister Scott Morrison’s government secured as-yet unspecified deals with four Senate “crossbenchers” to pass the tax bill. Labor Party leader Anthony Albanese then promptly dropped all pretence of trying to defer discussion on the third stage of the package, which by itself will give the top 5 percent of taxpayers $33 billion over 10 years.

Pitching to the financial markets and upper income layers, Morrison blatantly hailed the outcome as a “reward” for “the hard-working aspiration of Australians” who were “putting the effort in, having a go.” By implication, anyone below $41,000 was not “having a go.”

Albanese said his party was concerned that the bill locked in “unaffordable” tax cuts from 2024-25. He said nothing about its transfer of wealth to the upper echelons. Instead, he declared that Labor had decided not to stand in the way of immediate relief for “working Australians.” Like Labor’s election promises, this is a total fraud.

In the first place, Albanese refused to commit Labor to opposing the handout to the rich at the next election, saying it would reassess its position based on economic circumstances at the time. In reality, his backing for the tax cuts flows from his post-election vow that Labor would support “successful” people and “wealth creation,” seek closer relations with big business and pursue bipartisanship with the Morrison government.

Even the tax refunds in the first stage of the package, which taxpayers have been promised once they lodge their 2018–19 tax returns, will be regressive. That is, they will favour more affluent layers at the expense of the poor and low-paid. Dual-income households on $100,000 to $150,000 will get the maximum annual benefit of $2,160, whereas households up to $60,000 will get just $510, or less than $10 a week.

All workers on less than $41,000, plus aged pensioners, welfare recipients and the unemployed workers on below-poverty line Newstart payments, will not even get that. The median wage is just above $45,000, so more than half the population will receive zero.

Despite government denials, the bipartisan passage of the tax package inevitably means further severe reductions to already deteriorating social programs, including public healthcare, education and housing. The $158 billion package augments the $144 billion, three-stage, tax cuts passed last year, taking the total size of the tax cuts to $302 billion over 10 years.

Like the government, Labor’s main concern was to try to halt a slide into recession and shore up profits. Both claimed that this year’s tax rebates will boost the slumping economy, because cash-strapped and heavily-indebted households will have no choice but to spend the money. This drew an appreciative response from major retail operators like Harvey Norman executive chairman Gerry Harvey, who said: “It has been flat for the past 12 months. Profits are good, sales are good, but this money will help drive growth.”

However, the pittances offered to eligible workers cannot overcome the slide into slump, which is being produced by the mounting trade war by the US against China, falling house prices and reduced real wages. In the latest indicators, job vacancies across Australia fell by more than 1 percent during the three months to May, and retail sales rose just 0.1 percent in May, compared with April.

By 2024, the income tax system will be transformed into a virtual flat tax regime, with a 30 percent rate applying from $45,000 to $200,000. This is a major step toward eliminating the progressive tax principle that resulted from generations of struggles by working people.

The tax package is only one of many “tests” set by the ruling class for the new Labor leadership under Albanese. Friday’s editorial in the Murdoch flagship, the Australian, praised him for not seeking to block “significant personal income tax cuts,” and for displaying “bipartisanship” on key issues during the parliamentary question time on the same day.

Among the next “tests” are to change “workplace relations” to “encourage private sector investment.” These are code words for driving down wages and conditions, casualising the workforce and further tightening the legal penalties against industrial action in order to compete globally to attract capital.

Friday’s editorial in the Australian Financial Review insisted that the tax package must be followed by further pro-business “tax reform,” such as increasing the rate and coverage of the regressive Goods and Services Tax and reducing the “internationally-uncompetitive 30 percent corporate tax.”

Only nine votes—all Greens—were cast against the package in the Senate. Greens leader Richard di Natale said it was a “dark day for Australian politics” that would “hurt people doing it tough and line the pockets of millionaires.” Yet his primary concern was to appeal to Labor to change course, and work in partnership with the Greens, or be further discredited politically.

“What’s the value of the Labor Party if they are simply a paler version of the Morrison government?” di Natale asked. “Labor needs to work with the Greens to take on this cruel government and campaign with us to reduce inequality and take action on climate change.”

This only serves to sow dangerous illusions in Labor and the parliamentary order, and head off an independent movement of the working class and young people against the entire corporate and political establishment. Moreover, when the Greens have had a say in government at the state and federal level, they have backed the austerity agenda of big business.

Indonesian factory fire claims lives of 30 women and children

Owen Howell

As many as 30 people were killed by fire on June 21 as a makeshift factory in the Indonesian province of North Sumatra burned to the ground. The building was a private home doubling as a cigarette lighter factory which employed only female workers. Among the dead were 25 women, as well as five children who had come to visit their mothers at lunchtime.

The workers all lived near the factory in Sambirejo Village on the poor outskirts of Binjai, a town about 70km west of the provincial capital Medan. Their work involved affixing metal heads onto the plastic bodies of thousands of gas lighters. On the day of the fire, police investigators report, one of the factory employees was testing a spark wheel that happened to be faulty. Sparks flew and ignited a gas cannister and other flammable materials lying about the room.

Local residents who were walking to the mosque for their Friday prayers heard a series of loud explosions from the vicinity of the factory. The building, made mostly of wood, was consumed in fire within minutes. The flames raged for around an hour before finally being extinguished by Binjai firefighters.

The workers and children inside were unable to escape as the front door had been locked and the back doors were already engulfed in flames. The windows were fitted with iron bars. The bodies were discovered lying together in a heap on the floor in the middle of the factory’s single room.

The Langkat Disaster Mitigation Agency (BPBD Langkat) quickly had the bodies removed and transported to a police hospital in Medan. Relatives of the victims were asked to provide DNA samples and help identify the workers’ remains, which in many cases were burnt beyond recognition.

Families of the dead workers became frustrated with the slow identification process. Some claimed that the process would have been much easier at the place of the fire, but was difficult now that the authorities had moved and separated the bodies. Some relatives had to wait for almost a week before they could bury their loved ones.

Indra Lesmana, 34, lost his wife, two sons, and sister-in-law in the blaze. He told Al Jazeera reporters that the factory had been equipped with just one small fire extinguisher, but the employees had never been trained to use it. Factory supervisors would visit from Medan to monitor safety and inspect the worksite for dangers, but only once a month. Many locals suspected it was an illegal factory.

An elderly woman named Ros came forward as the owner of the house and told investigators that she had been renting the property for four years to a Medan businessman. This man, Indramawan, was detained by police in Medan the following day, along with two of the factory’s supervisors. They are currently being investigated for “negligence” and face a penalty of up to five years in prison if found guilty.

Indramawan reportedly heads PT Kiat Unggul, a manufacturing business which owns three village residences in Langkat Regency operating as gas lighter factories, including the one in Sambirejo. He admitted to Binjai Regional Police that he did not have industrial or trade permits for the factory, nor were his female employees registered with BPJS Employment, the national health insurance system.

Many illegal Indonesian businesses manage to avoid government taxes and circumvent workplace regulations by not having the required permits. They often operate out of private homes in poor residential areas where they can find cheap labour to boost production for a lower cost.

Binjai police investigators questioned four survivors as to why the factory’s front door was locked. The young women—the only survivors—were alive because they had gone out the back door for their lunch break shortly before the explosion.

The workers explained that the door was locked for several reasons. Indramawan wanted it locked to ensure that children could not enter the workplace, as many of the women wanted to take care of their young children while working. He was also trying to hide the nature of his illegal operations by keeping the front entrance closed during the day. Lastly, he wanted to prevent any theft by workers.

Indramawan had been the business’s director for five years, but claimed to police that he was only continuing the work system previously implemented by others. One of the supervisors who was apprehended by police, Lismawarni, said she had not been aware that the factory did not have the appropriate permission from regional authorities.

Accidents at informal workplaces are widespread throughout Indonesia. In October 2017, a fireworks factory in the industrial district of Tangerang outside Jakarta exploded, killing at least 49 people and leaving 46 injured. It was the deadliest industrial disaster in the nation’s history.

Two welders were ordered by their boss, the factory’s operations director, to work on a roof below which were stashed the raw materials for 4,000 kg of gunpowder fireworks. Welding sparks flew down from the rooftop and ignited the fireworks, causing a massive explosion that destroyed the warehouse and swept through the adjacent factory building.

As at the Sambirejo factory, employees were trapped inside as the rear exit was locked. With the building rapidly filling with smoke, they were left with no choice but to try to escape out the front through a wall of flames. Most of the survivors suffered severe burn injuries, two of whom later died in hospital.

After an investigation, the Indonesia National Commission of Human Rights revealed that the factory was falsely registered as a toy factory. Fireworks factories are illegal in densely populated areas such as Tangerang. It was permitted to hire only 10 employees, but had a workforce of 103 people at the time of the explosion, all criminally underpaid. Among the dead workers were several children between the ages of 14 and 16.

Saleh Partaonan Daulay, a parliamentary member of the National Mandate Party (PAN), told the press that he had asked the Minister of Manpower to immediately go to the scene of the accident. “The Minister must see it firsthand and meet with the victims and their families,” he said. “This is part of the responsibility that needs to be fulfilled.”

This response was aimed at quelling public anger and misleading people into believing that action would be done to prevent similar tragedies in the future. After the factory’s owner and operations director were arrested, the fire was ignored by the government and nothing was done to improve national safety standards.

Nearly two years after Tangerang fireworks disaster, the same hazardous working conditions and utter neglect of workplace safety continues, as the Sambirejo fire has demonstrated.

Hong Kong protests continue amid Beijing’s veiled threats of military intervention

Ben McGrath 

Demonstrations sparked by a Beijing-backed extradition bill are continuing in Hong Kong following the third mass protest in recent weeks on July 1. Approximately 8,000 people gathered Friday evening at Chater Garden in the city’s Central district. Another march is planned for Sunday that could again draw hundreds of thousands as social discontent mounts.

Friday’s demonstration was the second organized by the group known as “Hong Kong mothers.” Participants held signs denouncing police violence and demanding the complete withdrawal of the extradition bill that would allow those accused of crimes to be sent to the Chinese mainland, including political dissidents. The Hong Kong government has only suspended the bill indefinitely. Other signs expressed solidarity with young people facing uncertain futures amid a worsening global economic slump.

Student groups the same day rejected talks with Hong Kong’s Chief Executive Carrie Lam, who offered to sit down with them behind closed doors, in a maneuver likely meant to co-opt or intimidate the youth. Pang Ka-ho, one of the student leaders at the University of Hong Kong, said yesterday, “If the government could have had a sincere dialogue with young people before things deteriorated, it wouldn’t have come to this.”

Sunday’s march is scheduled to conclude at the West Kowloon Railway Station, where the high-speed train arrives from the mainland. Protesters also originally planned to march through a section of the city frequented by mainland tourists, but the police blocked it. A supporter of the protests stated online, “I don’t know how many mainland tourists will see our messages, but if the central government knows that we have shifted our focus to promoting Hong Kong values to mainland people, the Communist Party will be scared.”

Reaching out to mainland Chinese is an important step in the struggle for democratic rights. It is impossible for Hong Kong to exist as an isolated city. Governments and companies around the world are tearing up democratic rights to extract ever-greater profits from the working class and in a desperate attempt to prevent the explosion of mass unrest over social inequality. All sections of Hong Kong’s bourgeoisie support the attack on living standards, including the opposition pan-democrats.

The fight therefore is explicitly an international one, which means a fight for socialism against capitalism and the nation-state system. This is the political perspective that must be taken to the Chinese working class. Vague references to “Hong Kong values” only mask the political issues involved and divides the working class.

The necessity for a unified struggle is underscored by the danger that Beijing will send the military against the protesters. The Chinese garrison in Hong Kong conducted joint ground, aerial, and naval drills on June 26. The army’s newspaper PLA Daily reported that the exercises were conducted “with the goal of examining the troops’ combat capabilities in terms of emergency response and joint operations.”

The report on the drills was not published until July 2, however, the day after half a million people marched through the city. A group of protesters broke into Hong Kong’s Legislative Council where they smashed windows, painted anti-Chinese graffiti on the walls, and clashed with riot police.

An anonymous source in Beijing told the South China Morning Post, “The garrison holds such exercises regularly but the newspaper chose to publish details of these activities [on Tuesday] because it wants to tell the outside world that this is a sovereignty issue for China.” Beijing has blamed the protests on “foreign interference” and could use this as the pretext for deploying the army to put down the protests should Hong Kong authorities be unable to do so.

In another veiled threat, Zhu Yonghua, a naval commander who took part in the exercises, told the Chinese Communist Party’s organ, People’s Daily, that the drills were designed to “help the Hong Kong government protect the lives and property of its citizens.”

Foreign powers are certainly seeking to use the protests as a means for applying pressure to Beijing. Great Britain’s foreign secretary Jeremy Hunt warned Beijing Thursday that his government would not “just gulp and move on” and threatened possible sanctions.

Chris Patten, the last British governor of Hong Kong, wrote a comment for the Financial Times yesterday, arguing, as did Hunt, that Britain has “obligations to Hong Kong,” painting a picture of Britain as a benevolent former ruler only concerned with the people’s democratic rights.

British imperialism, however, seized the city following the end of the First Opium War in 1842, used it as a base for the bloody suppression of the Chinese peasantry and working class. British colonial rule is directly responsible for the lack of democratic rights and gross social inequality that exist in Hong Kong today.

On Monday, US National Security Advisor John Bolton similarly stated that Washington expects “China like every other country to adhere to its international obligations.”

Neither Britain nor the US has any genuine concern for democratic rights in China or elsewhere. These are the same two governments currently engaged in a campaign to extradite journalist Julian Assange to the US for exposing war crimes in a deliberate move to intimidate other journalists from exposing other government crimes.

Washington and London are intent on ensuring Hong Kong remains a major hub for finance capital and are worried that the city’s proposed extradition law could be used to target their own business interests. Any intervention by the US will be to further its military buildup in the Asia-Pacific and war drive against China.

UK’s GCHQ spy centre seeks new powers to circumvent encryption

Thomas Scripps 

The Government Communications Headquarters (GCHQ) has proposed that tech companies allow state spies into encrypted chats and calls. The new surveillance measures, known as a “ghost protocol,” would allow a government agent to “sit in” on ostensibly secure private conversations without the knowledge of other participants.

This news comes just days after MI5 and GCHQ’s admission that they are acting illegally in their use of bulk data, gathered by intruding into the lives of millions of innocent people.

GCHQ spokesmen defended the demand for a ghost protocol with the Orwellian argument that such a method would maintain the security and privacy of encrypted communication, because the encryption itself would not be broken—just made irrelevant. Ian Levy, technical director of the UK’s national cyber security centre, and Crispin Robinson, head of cryptanalysis, said preposterously that the proposal was “no more intrusive than the virtual crocodile clips” used to wiretap non-encrypted communications.

Over 50 companies, organisations and security experts have signed an open letter to the UK government condemning GCHQ’s plans as a “serious threat” to digital security and human rights. The letter, co-authored by Google, Apple, WhatsApp, Microsoft, Liberty, Privacy International and others, explains that “to achieve this result, their proposal requires two changes to systems that would seriously undermine user security and trust.

“First, it would require service providers to surreptitiously inject a new public key into a conversation in response to a government demand. This would turn a two-way conversation into a group chat where the government is the additional participant, or add a secret government participant to an existing group chat.

“Second, in order to ensure the government is added to the conversation in secret, GCHQ’s proposal would require messaging apps, service providers, and operating systems to change their software so that it would 1) change the encryption schemes used, and/or 2) mislead users by suppressing the notifications that routinely appear when a new communicant joins a chat.”

Levy could barely contain his frustration with this criticism, writing with disdain, “We welcome this response to our request for thoughts on exceptional access to data—for example to stop terrorists.”

The reference to terrorism is a fraud. GCHQ’s ever-expanding arsenal of surveillance techniques is not fundamentally a response to the extremist networks that are often political instruments of Western imperialism and its allies. It is the ruling class’ answer to immense social discontent and unrest across the globe, which communication via the internet helps to give international unity and political direction.

GCHQ’s in-house historian Tony Comer explained in a recent interview with the Financial Times, “the arrival of the public internet was the bigger event” for GCHQ than the end of the Cold War.

He did not explain the reason for this was that the invention and expansion of the internet had a great democratising effect. It undermined the stranglehold on news held by the rich and enabled the world’s population to talk to one another. Above all, these developments benefited the international working class, whose common struggle against inequality, dictatorship and war could now be discussed and organised across countries and continents vastly more easily than ever before.

Intelligence agencies like GCHQ and the US National Security Agency (NSA) are growing to monstrous proportions to counteract these developments.

The UK spy station will expand its 6,000-strong staff by 600 to 800 people this year and will open a new base in Manchester. The government has committed £22 million to supporting the £650 million development of a “Cyber Park,” occupying 326 acres to the immediate west of GCHQ. The Park, which is set to create 7,000 new jobs and 1,200 new homes, will be based around the intelligence organisation’s newly created Innovation Centre.

GCHQ’s field of potential targets expands well beyond the domestic population. In the next few months, Britain will establish a 2,000-strong offensive cyber force, designed to attack foreign populations.

Just last year, according to Reuters, hackers using software called Regin linked to the “Five Eyes” intelligence alliance—made up of the United States, Britain, Australia, New Zealand and Canada—attacked the Russian internet search company, Yandex. Yandex serves approximately 75 percent of the Russian population. Sources told Reuters that the hackers appeared to be searching for technical information explaining how Yandex authenticates user accounts. This would help a spy agency impersonate a Yandex user and access their private messages.

The Intercept previously identified Regin as the software used during an attack on the Belgian communications company, Belgacom, in the early 2010s, carried out by GCHQ and the NSA.

The ultimate goal of the Five Eyes is to turn the internet into a giant surveillance network. Any lack of compliance, however slight, is denounced. Mozilla’s plans for an encrypted web browser—which would bypass the government’s method of blocking websites through Internet Service Providers—and declaration that it would list blocked sites was deemed “completely unacceptable” by GCHQ.

Labour’s deputy leader Tom Watson wrote to Conservative Culture Secretary Jeremy Wright saying browsers like Mozilla’s “threaten to unravel the Government’s plans to protect the public from online harms… the Government have been slow to wake up to the threat [of encrypted browsers]. I am deeply troubled that is further evidence that tech giants continue to see themselves as above the law.”

These conflicts do not alter the fact that the billionaire owners of the big tech companies do not care one iota for their users’ democratic rights. Their only concern is that the undisguised authoritarianism of state intelligence agencies will exacerbate the growing distrust of the world’s population for corporate news and communication platforms. Having witnessed the collapse of public trust in the traditional mainstream media, they are eager to more carefully manage their reputations—the better to enable government censorship and surveillance.

A passage from the open letter against the “ghost protocol” signed by Google, Apple et al. reads, “The overwhelming majority of users rely on their confidence in reputable providers to perform authentication functions and verify that the participants in a conversation are the people they think they are, and only those people. The GCHQ’s ghost proposal completely undermines this trust relationship.”

As government partnerships with Google, Facebook and Amazon make clear, imperialist states and Silicon Valley executives are working with the same dictatorial objectives in mind. GCHQ’s illegal operations against the world’s population can only be defeated as part of a broader movement in defence of democratic rights, based on a global struggle of workers and youth fighting for socialism.

Royal Marines seize Iranian tanker under orders from US

Chris Marsden 

Britain’s seizure of an Iranian supertanker carrying 2 million barrels of oil is an act of piracy and a major escalation in tensions that threaten to spiral out of control. It was carried out at the behest of the United States as part of the campaign of military provocations and economic sabotage against Tehran.

A detachment of nearly 30 British troops including Marines from 42 Commando raided the tanker, Grace 1, together with police from Gibraltar, the rocky outcrop seized by Britain following the War of the Spanish Succession under the 1713 Peace of Utrecht that is strategically placed to control access to the Mediterranean Sea.

The UK said it had seized the ship to prevent Iran breaching sanctions against Syria.

Royal Marines during live fire drills in 2012 [Credit: LA(Phot) Jason Ballard/MOD]

The military operation in the early hours of Thursday morning involved a descent by ropes from a Wildcat helicopter and boarding from a speedboat. Grace 1 was travelling through the strait of Gibraltar. It was identified by Lloyd’s List as having begun its journey from Iran and was controlled by Russian Titan Shipping, a subsidiary of TNC Gulf in Dubai. Iran has since declared ownership.

The 28 crew members were mostly Indian nationals.

Lloyds List says it is the first tanker carrying Iranian oil to head for Europe this year. It represents a significant loss to a country hit by comprehensive US sanctions and more targeted economic penalties by the European Union. In April 2018, Iran shipped 2.5 million barrels per day, which fell to around 300,000 barrels per day in June this year, according to Al Jazeera. Other sources claim that Iran is now exporting only 200,000 bpd and needs to ship at least 600,000 to avoid economic meltdown.

Tehran responded by summoning Britain’s ambassador to its foreign ministry to explain what it described as an “illegal seizure.” An Iranian statement “called for the immediate release of the oil tanker, given that it has been seized at the request of the US, based on the information currently available.”

The most significant comment came from Mohsen Rezai, a former head of Iran’s Revolutionary Guard and a member of a council that advises the Supreme Leader, Ayatollah Khamenei. He said Iran would respond to bullies “without hesitation.” He warned in a tweet, “If Britain does not release the Iranian oil tanker, it is the authorities’ duty to seize a British oil tanker.”

UK Ambassador Rob Macaire reiterated the British position that the vessel had been seized at the request of the “Gibraltarian authorities to enforce sanctions against the regime of Bashar al-Assad.” The Ministry of Defence also insisted that British troops acted under the direction of the Gibraltar police.

Fabian Picardo, Gibraltar’s chief minister, added that “we have reason to believe that the Grace 1 was carrying its shipment of crude oil to the Banyas refinery in Syria … the property of an entity that is subject to European Union sanctions against Syria.”

This is both a transparent and stupid lie. Gibraltar, population 30,000 plus, is as capable of acting independently as a mouse in a cage.

Spain’s acting foreign minister, Josep Borrell, said Gibraltar had seized Grace 1 in response to a request from the US to Britain. El Pais reported that Borrell, from the Socialist Party (PSOE) said the US intelligence implied that the supertanker was in British territorial waters. Madrid will now formally complain of a British incursion into Spanish waters, with Borrell, the EU’s nominee for High Representative for Foreign Affairs and Security Policy, stating, “We are analysing the circumstances and seeing how they affect our sovereignty.”

Donald Trump’s national security adviser, John Bolton, tweeted, “Excellent news: UK has detained the supertanker Grace I laden with Iranian oil bound for Syria in violation of EU sanctions. America & our allies will continue to prevent regimes in Tehran & Damascus from profiting off this illicit trade.”

It is difficult to gauge how significant the UK/Spanish row is, given the constant tensions over Gibraltar and the degree to which Spain would ever wish to clash with the US. Moreover, a Spanish diplomatic source said, “Spain didn’t want to interfere because the issue was compliance with European Union sanctions.”

Nevertheless, Britain is acting in its chosen role as America’s most loyal imperialist military ally—a stance made more imperative by the deadline for the UK exiting the EU in October.

This is certainly the first time that any EU member state has seized an Iranian tanker at sea and the EU has thus far been seeking to keep alive the 2015 Joint Comprehensive Plan of Action (JCPOA), reached between Tehran, the US, China, Russia, Britain, France and Germany, limiting the country’s uranium stockpile to 300 kilograms, after Trump withdrew US backing last year.

The deal is in grave difficulties, with Iranian President Hassan Rouhani warning Wednesday that Tehran would respond to US aggression pushing the Middle East to the brink of war by boosting its uranium enrichment to “any amount that we want” after July 7.

Rouhani said that Iran had removed the core of the Arak reactor and filled it with cement in January 2016, but if the remaining signatories to the 2015 accord did not defy the US and operate according to “the programme and timeframe of all the commitments you’ve given us, we will return the Arak reactor to its previous condition.”

Iran would reduce its stockpile of enriched uranium only if Britain, France, Germany, Russia and China honoured their pledges.

The UK is clearly seeking to stiffen EU resolve to confront Iran on behalf of Washington. Gibraltar’s Picardo stated that he had “written this morning to the Presidents of the European Commission and Council, setting out the details of the sanctions which we have enforced,” while British diplomatic sources told El Pais that they are convinced Madrid and London are working towards the same goal of ensuring that EU sanctions against Syria are respected: “It was done in observance of international law, and we have no doubt whatsoever that the government of Spain also supports the sanctions regime, even though we admit that both governments still have a pending dispute over the territory of Gibraltar.”

The EU’s executive declined to comment Thursday, saying that implementing sanctions was a matter for the member states.

Whatever the level of disagreements between the US and Europe, the danger of war continues to grow. And no imperialist power can be entrusted with the task of opposing it. Europe’s “caution” is nothing more than a reflection of its military weakness against the US and fear that it will be side-lined in the oil-rich Middle East. But its response will be to seek to strengthen its hand against Washington and Wall Street—ultimately by rearmament and the creation of an EU army. A catastrophic war in the Middle East brings with it the danger of world war. It can be stopped only by the independent social and political intervention of the working class.

Sri Lankan president calls for autocratic executive presidency

K. Ratnayake 

Sri Lankan President Maithripala Sirisena at a meeting with media heads last week called for the abolition of the 19th amendment to the constitution which clipped some of his powers as president. He blamed the amendment for “creating the current political instability in the country” and proposed to revert to the previous executive presidential system.

Sirisena’s attack on the 19th amendment, which he once hailed as a victory for democratic rights, is another expression of the drive by every faction of the ruling elite for autocratic forms of rule amid the deep political crisis in the country.

The 19th amendment was passed by the parliament in April 2015 just four months after Sirisena came to power. It limited the president’s term of office to two and his/her power to dissolve parliament was also reduced. Under the amendment, a constitutional council was set up to propose top judges and independent commissions such as for elections and the police.

Hailing these changes as a victory for democracy was a fraud. As the WSWS explained at the time, “it was designed to refashion the constitution to hoodwink the working class and poor by providing a democratic façade for repressive measures being prepared to ram through the austerity demands of the International Monetary Fund (IMF).” This is exactly what workers, the poor and youth have experienced over the past four years.

However, on June 25, President Sirisena told the media heads that “the amendment has created two power houses, the president and the parliament,” two leaders—president and prime minister—and “severely reduced the capacity to create cohesive and long-term policies.”

While saying he and the parliament were responsible for the amendment, Sirisena claimed it was “drafted on NGO [non-government organisation] requests” and the “clauses brought from the back door.”

The thrust of all these utterances is there must be only one “power house” and one leader—that is a strong autocratic ruler must be established.

Noting that the next presidential election takes place in four months, Sirisena declared it would be better to abolish the amendment before or after the election, regardless of who wins. Significantly, he added, “we need no new constitution. The constitution is in good shape when we get rid of both 18th and 19th amendments.”

The claim that the political instability is a result of the constitutional amendment is false. Rather, it is the result of bitter political infighting between the factions of the ruling elite—led by President Sirisena, Prime Minister Ranil Wickremesinghe and opposition leader, Mahinda Rajapakse—against the backdrop of enormous social opposition to their common agenda of austerity.

Sirisena came to power in 2015 January by exploiting the huge popular opposition against the government of then President Rajapakse. He was a senior minister in that government but suddenly declared his opposition to Rajapakse’s “dictatorship” and gross human rights violations and promised to abolish the executive presidency and transfer powers back to the parliament.

His defection was engineered by former President Chandrika Kumaratunga and Wickremesinghe, leader of the United National Party (UNP) who both backed Sirisena’s campaign. The Tamil National Alliance (TNA), Janatha Vimukthi Peramuna (JVP) rallied behind Sirisena along with the pseudo-left groups including Nava Sama Samaja Party, United Socialist Party and Frontline Socialist Party. A host of academics directly or indirectly supported this fraudulent campaign for “good governance.”

Behind this façade, Sirisena’s campaign to oust Rajapakse was backed by the US and its regional strategic partner India. The US was hostile not to Rajapakse’s autocratic rule but his close relations with Beijing as the Obama administration was ramping up its confrontational “pivot to Asia” against Beijing.

Sirisena and his then ally Wickremesinghe, who was appointed as prime minister, abruptly shifted Sri Lanka’s foreign policy in favour of the US. They abandoned the promise to abolish the executive presidency and brought the limited 19th amendment to the constitution instead.

However, their collaboration was short lived. The so-called unity government was fractured as it became increasingly discredited among workers and the poor because of its implementation of IMF-dictated policies that slashed welfare measures and price subsidies, privatised and axed jobs. Opposition grew despite the unleashing of police and military repression against the struggles of workers, farmers and students.

This huge social opposition was reflected in the humiliating defeat in local government elections in February last year in which Sirisena’s party came a poor third, while the UNP ran second. Many voted for Rajapakse’s new party, the Sri Lanka Podujana Peramuna (SLPP), simply as a means of showing their opposition to the government.

Sirisena blamed Wickremesinghe and withdrew his party from the ruling coalition. Seeking a political realignment with the SLPP, he staged a political coup in October last year, arbitrarily removing Wickremesinghe as prime minister and replacing him with Rajapakse. The scheme failed, however, when Rajapakse failed to gain a parliamentary majority. Sirisena dissolved parliament, but the Supreme Court ruled that this decision was illegal. In the background, the US opposed Rajapakse’s return, compelling Sirisena to reappoint Wickremesinghe.

The rapid rightward shift by the entire ruling class was sharply expressed after the terrorist bombings of churches and hotels on April 21. Evidence is emerging that, not only the defence establishment, but political leaders, including Sirisena, Wickremesinghe and Rajapakse, knew well in advance of the impending terrorist attack but deliberately did and said nothing.

Sirisena and Wickremesinghe seized on the attack to impose draconian emergency laws and activate the Prevention of Terrorism Act. The military and police were deployed across the island in the largest operation since the end of the bloody anti-Tamil communal war against the separatist Liberation Tigers of Tamil Eelam. All of the opposition parties, including Rajapakse’s SLPP, the TNA and JVP fully supported these measures. The real target of these anti-democratic measures is not the terrorist threat but the emerging struggles of the working class.

The constitution that Sirisena now hails as “fine” was introduced by President J. R. Jayewardene in 1978. It concentrated sweeping powers in the hands of the executive president, effectively reducing the parliament to a rubberstamp. Jayewardene’s calculation was that an autocratic president was necessary to suppress the emerging opposition of the working class to his open market economic policies that were transforming Sri Lanka into a cheap labour platform for foreign investors.

Significantly when Sirisena called last week for the repeal of the 19th amendment, Rajapakse immediately welcomed the proposal. At the same time, he defended his own 18th amendment to the constitution that allowed unlimited terms for the president and boosted presidential powers to appoint judges and top state officials. Under the 19th amendment, it was repealed. Rajapakse is seeking to return to power under the slogan of a “strong and stable government.”

Prime Minister Wickremesinghe made a similar response. At a public meeting last week, he declared: “It is difficult to handle the government vehicle as it is manned by two drivers. When one driver tried to speed up the other tried to stop him.”

Sirisena’s call for the repeal of the 19th amendment is a sharp warning to the working class. Mired in deep economic crisis produced by the global slowdown and facing developing unrest among workers and the poor, the ruling class as a whole is preparing police state measures in its desperate bid to defend the capitalist rule.

Furniture retailer Conforama announces 1,900 job cuts in France in 2020

Anthony Torres

Compromised by financial scandal since 2017, South Africa’s Steinhoff corporation is now announcing mass layoffs and store closures at Conforama, the French furniture and white goods retailer that it owns. After having made public a corporate restructuring plan for 2020, Steinhoff has just announced 1,900 job cuts at Conforama, together with the closure of 32 stores.

In the face of sharpening competition, resulting in particular from the growth of online shopping, large retail chains are attempting to boost profits on the back of already super-exploited workers. Conforama management’s announcements of broad job cuts and store closures comes after multinational retailer Carrefour planned the elimination of 2,400 jobs and the closure of 272 stores last summer.

Conforama workers only learned about the mass layoffs occurring at their workplaces from the media. Amel Sbartaï, a white goods salesman at Conforama’s Pont Neuf store in Paris, which is slated for closure, told the press: “We were not expecting this, management had told us that there was nothing we should worry about. We were told that the Pont Neuf store in particular was Conforama’s flagship store. We were lied to.”

Workers at the Pont Neuf store spontaneously refused to work and gathered for a protest against the closure of their workplace, temporarily shutting it down, as reportedly took place in a number of other Conforama stores.

Very broadly, a new intensification of the economic crisis is driving the ruling class and corporate management to mount fresh attacks on workers in all industrial sectors with the complicity of the trade unions. Major retailers are hard hit. Moreover, major auto companies including Ford, GM and VW have also announced tens of thousands of job cuts this year in Europe, America and internationally.

In a July 2 press release, Conforama tried to justify slashing staffing levels: “Since 2013, Conforama in France has accumulated losses adding up to nearly 500 million euros [$US564 million].” It added that the retail chain was confronted with “profound transformations of the retail sector and in particular the emergence of specialized retail. In this context, our company has not sufficiently adapted itself and it is suffering a drastic fall in the profitability of its network of stores.”

Conforama added, “Steinhoff’s financial difficulties have drawn attention to this unviable situation,” which it claimed requires “strong and rapid measures to ensure Conforama’s survival and to protect as many jobs as possible in the longer term.”

The company’s objective is “a return to equilibrium in two years,” according to statements by sources close to management. Conforama had a net turnover of 3.4 billion euros in 2018. In April, the company made plans to obtain some 300 million euros in financing. Now thousands of jobs are to be axed as dozens of stores are shut down.

The trade unions are complicit in the attacks being prepared against the workers. A main works council (CCE) meeting scheduled for Tuesday morning, during which Conforama’s corporate restructuring strategy was to be laid out in detail by management and the unions, was ultimately canceled as both the bosses and the union bureaucrats decided not to show up. However, another CCE meeting is planned for July 11, according to Abdelaziz Boucherit of the Stalinist-led CGT union.

On LCI television, Laurent Berger, the national secretary of the CFDT union, blamed the mass layoffs on company incompetence: “Management committed enormous strategic blunders, by investing for example in football when they would have done far better to invest in modernizing products and stores.”

Berger was echoing the statements of corporate strategists seeking to justify the layoffs. Olivier Dauvers, a specialist in large retail operations, declared: “There has also been an insufficient modernization of the stores, it is sort of unpleasant to go into a Conforama if you are a consumer, it is not the store that makes you dream the most if you are in the market for furniture.”

Moreover, online sales have absorbed a large share of the market for large retailers like Conforama. Even more than in its physical stores, it is in online sales that Conforama has fallen behind. E-commerce, which represents approximately 15 percent of the French market, only constituted eight percent of the company’s sales. Moreover, Conforama’s South African parent company recently revealed a six billion euro hole in its corporate accounts that threatens both Steinhoff and Conforama with bankruptcy.

Berger’s criticisms are hypocritical, however, since the 2020 restructuring plans were announced in April and were preceded by talks with the unions, who were fully informed that mass layoffs were being prepared. However, they did nothing. They neither sought to mobilize retail workers more broadly nor to unite them with other workers in other industries targeted by job cuts.

At Carrefour, the unions felt obliged to call a few symbolic strike days out of fear of losing control of the workforce in France. However, they demoralized the workers and isolated them from Carrefour workers in Latin America, China and internationally even as Carrefour management attacks jobs on a global scale.

To defend Conforama workers, the struggle has to be taken out of the hands of the unions. Workers need their own organs of struggle, committees of action formed independently of the unions and established political parties, to coordinate an international struggle. As the “yellow vest” movement continues, having illustrated the enormous power of protests organized via social media independently of the trade unions, the decisive question is to mobilize far broader layers of workers internationally in defense of jobs and social conditions and against the capitalist system.

Facebook planning to ban ads which discourage voting in US elections

Kevin Reed

On June 30, Facebook announced plans to begin banning ads that discourage people from voting in US elections. In a Newsroom blog post called “A Second Update on Our Civil Rights Audit,” COO Sheryl Sandberg announced Facebook’s anti-democratic policy by writing that a cross-functional team had been dedicated to a full-time effort “to protect elections” by blocking “don’t vote” advertising.

Sandberg presented the “don’t vote” ad ban along with a series of new “civil rights” censorship measures. Among them are strengthening Facebook’s “ban against white supremacy” by blocking not only the posts of white supremacists, but also any “praise, support and representations” such as sharing slogans and symbols of “hateful content” by other users.

Other measures are being intensified with the supposed aim of “fighting discrimination” in Facebook housing, employment and credit ads by blocking targeting by race, ethnicity, sexual orientation, religion, age, gender or zip code. Sandberg also wrote that Facebook is building a team to protect against “misinformation related to the census” in 2020 that will be enforced by artificial intelligence.

Specifically, on the 2020 elections, Sandberg wrote that the Facebook team is “already working to ban ads that discourage people from voting, and we expect to finalize a new policy and its enforcement before the 2019 gubernatorial elections. This is a direct response to the types of ads we saw on Facebook in 2016. It builds on the work we’ve done over the past year to prevent voter suppression and stay ahead of people trying to misuse our products.”

The reference to the 2016 elections is important because the practice of annual “civil rights audits” at Facebook is one of the responses to relentless and unsubstantiated criticisms—emanating from the US intelligence establishment—that the social media company enabled Russian meddling and facilitated the victory of Donald Trump over Hillary Clinton in the last presidential election. Among the many absurd assertions about “Russian interference” has been the claim that “inauthentic behavior” by “bad actors” spread divisive ideas that upset the otherwise smooth functioning of American democracy.

Among the claims of this false narrative from 2016 is that African Americans in particular were the target of a voter suppression campaign conducted by the Russians. The report of special counsel Robert Mueller asserted—without substantiation—that the Russian Internet Research Agency (IRA) created false social media identities “with the goal of sowing discord in the US political system.”

Additionally, several reports prepared for the Senate Intelligence Committee last December claimed that the IRA conducted a social media “voter suppression campaign” by posing as fed-up Americans and targeting African-American and Democratic Party voters. Among these reports is one entitled “The Tactics and Tropes of the Internet Research Agency” published in December by New Knowledge, a cybersecurity company from Austin, Texas that is managed by former State Department and US military intelligence staffers.

In this report—based on data provided to the US Senate Select Committee on Intelligence by Facebook, Twitter and Alphabet (Google’s parent company)—claims of “voter suppression tactics targeting African-American voters” on Facebook, YouTube and Instagram by the IRA are advanced without substantiation. In one revealing assertion, the New Knowledge report says that these social media posts included “advocating Black voters stay home, or vote for Jill Stein,” the Green Party’s 2016 presidential candidate.

This statement says more about the objectives of the bogus “Russian meddling” campaign than all of the reams of documents and transcripts of testimony over the past two and a half years. Here, one can see how the US intelligence community and the Democratic Party establishment are teaming up with their supporters in Silicon Valley to censor content on social media that encourages the public to reject the two-party system.

Among the many specious rationalizations for the outcome of the 2016 elections was that the refusal of voters to turn out for Democrat Hillary Clinton, as well as those who voted for Stein, helped secure the victory of Republican Donald Trump.

The irony that banning “don’t vote” political ads is being presented as part of Facebook’s efforts to advance “civil rights on our platform” was evidently lost on Sandberg. Her claim that any advertising campaign advocating a boycott of the US elections will be shut down as a “misuse of our products” is actually an overt act of political censorship and an attack on civil rights.

The tactic of vote boycotting is an entirely legitimate policy for parties and individuals who find no one to vote for in an election and wish to offer an alternative political program to voters. This is particularly the case in the United States where the two capitalist parties hold a monopoly over electoral politics and masses of people are left with a choice between two equally despised candidates, as was certainly the case in the 2016 elections. Those claiming that “don’t vote” campaigns must be banned are, in reality, trying to ensure that one of the two parties are voted for as the “lesser of two evils” i.e. the Democrats.

Although it may come as a surprise to Sandberg and her intelligence community advisors, abstention is actually one of the choices in all democratic systems. In every democratic process—including those of a non-governmental character governed by Robert’s Rules of Order where the majority rules—abstention is one of the three options available to voters. Election boycotts are regularly campaigned for in countries around the world, except for those countries with compulsory elections.

As a matter of fact, the number of voters who abstain in US presidential elections—that is, the number of registered voters who do not go to the polls and cast a vote on election day—is a substantial percentage of the population.

For example, according to the US Census Bureau there were 245.5 million Americans ages 18 and older in November 2016 with about 157.6 million of them registered to vote. Leaving aside the fact that there were 87.9 million American adults who are not registered to vote—greater than the number of votes for either of the two candidates running for president—according to the Office of the Clerk of the US House of Representatives, the total number of people who voted in 2016 was 136.8 million.

This means that nearly 21 million people abstained from voting for either Clinton or Trump in 2016. This number is many magnitudes greater than either the number of votes in critical Midwest industrial states (approximately 80,000) that swung the electoral college to Trump as well as the number of popular votes that Clinton won over Trump (2.86 million).

As analyzed here on the World Socialist Web Site, the election of Donald Trump was not the product of “Russian interference,” voter abstention or votes for third party candidates. Clinton ran a reactionary campaign based on identity politics and proved incapable of attracting popular support, particularly in the Midwest. Trump’s election was also the product of a rejection of the Democratic Party after eight years of the Obama presidency where the promised era of “hope and change” never arrived.

In the run up to the 2020 elections, Facebook is intervening on behalf of a faction of the ruling elite to block alternatives to the Democratic Party. Under conditions where masses of people are entering the class struggle, moving to the left and toward socialism, this intervention is taking the form of censorship of oppositional and left-wing political perspectives.

Facebook’s policy that all “don’t vote” campaigns must be silenced is politically reactionary. It is ultimately directed at diverting workers, students and youth—who are striving to find the genuine socialist alternative to the two parties of American capitalism, the Socialist Equality Party—back into the dead end of support for the Democratic Party.

Fourteen high-ranking Russian navy officers die in fire on nuclear-powered submarine

Clara Weiss 

On July 1, a fire on the nuclear-powered submarine AS-31 “Losharik,” killed 14 high-ranking Russian navy officers. Seven of them were captains of the first rank, the equivalent of captain in the US Navy. Three were captains of the second rank, two were captains of the third rank, and two had been awarded the order of “Hero of Russia,” the highest possible military order in Russia. The other two were a captain-lieutenant and a medical officer. The Losharik submarines are operated by the Main Directorate of Deep-Sea Research which is reporting to the Russian military intelligence agency GRU.

The vessel is considered top secret and worth an estimated $1.5 billion. Details about how it looks and what it can do have been shrouded in secrecy since its first deployment in 2003, but it is reportedly capable of carrying out high-level intelligence operations on the seafloor, including the detecting and cutting of communication and internet cables.

Information about the submarine disaster was not released until the evening of July 2. The Russian Navy has classified details about the fire as a “state secret.” Russian President Vladimir Putin called the death of the 14 officers a “big loss for the Russian navy and army.”

The fire reportedly began around 9 p.m. local time on Monday in the Barents Sea in the Russian Federation. The Russian Defense Minister Sergei Shoigu has declared that the fire began in the submarine’s battery compartment, and that the vessel, worth an estimated $1.5 billion, could be repaired and redeployed.

Reports in the newspapers Kommersant and Gazeta.Ru, both based on anonymous sources in the Ministry of Defense and military, suggested that the cause for the fire was a short circuit. According to Kommersant, it occurred in one of the electrical rooms of the underwater nuclear power station AS-31 that powered the submarine. Initially, there were conflicting reports as to whether the fire occurred on the Losharik or a potential mother submarine, the Podmoskovye.

The submarine carried a crew of 25 people. While some reports have suggested that all were navy officers, others said that one or two civilians were on board. According to the official version, the submariners died from toxic chemicals released by the fire, trying to protect a civilian and the submarine. Five survivors were later hospitalized with smoke inhalation and concussion. Ten of the fourteen bodies have not yet been recovered.

The Ministry of Defense has declared that the nuclear reactor powering the submarine had not been damaged and that no radiation had been released. Norwegian authorities found no elevated levels of radiation as of Wednesday. A report by the Norwegian Radiation Protection Authority, according to which they had been notified by the Russians of a gas explosion aboard the vessel, was denied by the Kremlin.

Why such a large high-ranking crew would be on board the submarine has not been explained.

The military columnist Alexander Golts noted, “We’re talking about a top-secret military division whose responsibilities are outside the broader considerations of the Russian army. ...It [could be] a chance to collect information: roughly speaking, they [military service members] collect everything that lands on the bottom of the sea. That primarily means debris from weapons testing, which is something every agency in the world searches for. It’s also known that countries whose militaries are opposed with one another install sensors, all possible monitors, on the ocean floor to track the submarine routes of their potential opponents. There are connective cables deep on the ocean floor. If you can connect to them, you can discover quite a lot. In times of conflict, destroying those cables can destroy a potential opponent’s ability to communicate.”

A report by the Drive drew attention to the fact that the official newspaper of the Russian Ministry of Defense, Krasnaya Zvezda (Red Star), attached a hitherto unseen drawing of the newly developed Belgorod submarine, a version of the Oscar II-class submarine, to a report on the submarine disaster. It is unclear whether this in any way indicates that the Belgorod, construction for which was officially launched in April this year, was involved in the incident. The longest submarine in the world, the Belgorod is designed as the country’s first operational launch platform for the Poseidon nuclear-powered and nuclear-armed long-range torpedo.

The Poseidon reportedly has unlimited range and is difficult to detect. According to the Drive, “the weapon is meant to give Russia a second-strike deterrent capability that is entirely immune to U.S. missile defenses.” Other “special missions” for which the submarine was constructed include intelligence gathering and acting as a mother ship for smaller manned and unmanned submarines like the Losharik. Unconfirmed reports of the fire on Monday suggested that a larger mother ship, the Podmoskovye submarine, was deployed in the Barents Sea alongside the Losharik.

Monday’s submarine disaster is the third major Russian submarine disaster in less than two decades. In 2000, at least 118 died when the nuclear submarine Kursk sank after several explosions during naval exercises in the Barents Sea. In 2008, 20 people died in a gas leak on the submarine K-152 Nerpa in the Sea of Japan.

The fire is a blow to the Kremlin and the Russian oligarchy, putting into question its military capacities amidst an international military buildup, led by the US and NATO. For the working class, the Losharik disaster is a chilling reminder of the advanced state of the preparations for world war.

Whatever the exact reason for its deployment on Monday, there is little question that it was bound up with the efforts of the Russian state to prepare itself for a possible assault by the US and NATO, which could involve nuclear weapons.

Recent years have seen a massive escalation of an international arms race. Especially since the beginning of the Ukraine crisis in 2014, which was triggered by the US- and EU-backed fascist coup in Kiev, NATO, the EU and the US have aggressively built up their military in an open effort to prepare for war against Russia. Earlier this year, the US announced its withdrawal from the Intermediate Range Nuclear Forces (INF) Treaty, which prohibits the deployment of land-based missiles with ranges of up to 5,000 miles. Just last week, the US Senate approved the largest military budget in US history of $750 billion.

While the Kremlin has recently cut back on military spending, the Russian government has taken steps in recent years to modernize its army and navy in case of war.

In this arms race, submarines are playing an important role. Submarines are central to the gathering of military intelligence. Since vessels like the Losharik can detect and cut internet and other communication cables on the ground of the ocean, they can also play a central role in cyber warfare. Just last month, the New York Times revealed that the White House had secretly launched massive cyber attacks on Russia. Earlier this year, the Kremlin announced that it was preparing its own Russian internet that could function if the broader internet was shut down in case of war.

Another crucial function of nuclear submarines is that of nuclear deterrent. In 2015, Vice noted that, “Nuclear ballistic missile submarines are considered the nuclear deterrent of last resort because they’ve historically been the most reliable and best protected part of the nuclear arsenal. Even if an attacker can hit every single square inch of a country in a surprise nuclear attack, the attacker would still be vulnerable to a devastating counterattack launched by nuclear subs hiding at sea. Because of this, the majority of the US nuclear arsenal is submarine-based. A guaranteed ability to counterattack goes a long way in preventing enemies from getting an itchy nuclear trigger finger.” The report highlighted that military strategists in Washington were preparing for the possibility of “terrain-involved submarine warfare” which could involve the placing of nuclear weapons on the bottom of the sea.

International Labour Organization report documents growing assault on wages

Nick Beams

A report issued by the International Labour Organization (ILO) yesterday shows that workers’ share of global income has fallen “substantially” over the past two decades, with a systematic redistribution of wealth to both capital and the top income earners.

Globally, the share of national income going to workers is declining, having fallen from 53.7 percent in 2004 to 51.4 percent in 2017, while the share going to capital rose from 46.3 percent to 48.6 percent. This is part of an ongoing trend, only temporarily interrupted by the 2008–09 global financial crisis.

However, the overall redistribution of wealth from labour to capital is only part of the picture.

One of the most significant findings in the report documents how social inequality is widening. Income is being siphoned up to the highest levels at the expense of middle-income earners, defined as the middle 60 percent of workers. Their share of total wages fell from 44.8 percent in 2004 to 43 percent in 2017.

In what it described as a key finding, the report states: “The data show that in relative terms, increases in top labour incomes are associated with losses for everyone else, with both middle class and lower-income workers seeing their share of income decline.”

This is particularly the case in the major economies. “In several high-income countries,” the report states, “the evolution of the labour income distribution between 2004 and 2017 follows a ‘hockey stick’ pattern: substantial losses for the middle and lower-middle class, and large gains for the top. This pattern can be found, among others, in Germany, the United States and the United Kingdom.”

This pattern of large gains for the upper income earners, coupled with losses for much of the rest of the income distribution, was particularly marked in Britain, where the report found that the largest losses were for the percentiles ranging from 7 to 50 percent. It also found that the increases for the top income earners were “more pronounced” than in the US and Germany.

On a global scale, the report found that the top 10 percent received 48.9 percent of total wages, the next decile received 20.1 percent, and the remaining 80 percent received 31.0 percent. The lowest 20 percent received only 1 percent of total labour income.

Commenting on the report, Roger Gomis, an ILO economist, said: “The majority of the global workforce endures strikingly low pay and for many having a job does not mean having enough to live on. The average pay of the bottom half of the world’s workers is just 198 dollars per month and the poorest 10 percent would need to work more than three centuries to earn the same as the richest 10 percent do in one year.”

A number of factors have worked to create this situation. First, the ILO data is yet another confirmation of the analysis of Karl Marx, denounced by bourgeois economists down through the decades, that the essential objective logic of the capitalist mode of production is the accumulation of massive wealth at one pole and poverty and misery at the other.

This logic has been reinforced by the policies carried out by governments and financial institutions around the world, particularly since the eruption of the global financial crisis in 2008.

The injection of trillions of dollars into the financial system in order to boost the value of share prices and other financial assets has been one of the key mechanisms for the transfer of wealth up the income scale. Much of what constitutes the increase in wages for the upper 10 percent is derived from the escalating incomes of those involved in the top-level speculative operations of the financial system.

At the same time, governments are working to enhance this redistribution of income through tax cuts benefiting top income earners—the latest example being the passage of major tax cuts for the wealthy by the Australian parliament yesterday, with bipartisan support, following the lead of the Trump administration.

However, the key factor in facilitating this process has been the role of the labour and trade union bureaucracies, together with the social democratic parties, in suppressing the opposition of the working class. All over the world, the cuts in real wages, documented by the ILO report, have been accompanied by the actions of the trade unions in doing whatever they can to prevent and shut down opposition.

This is not merely the product of the total subservience and treachery of individual union leaderships—though that abounds—but flows from the nature of the trade unions themselves, rooted in their national-based structures and orientation.

Their response to the globalisation of production and finance over the past three decades has been to make their “own” capitalist class more “internationally competitive” through cuts in real wages and the imposition of changes in working conditions to facilitate greater exploitation. Consequently, they have undergone a transformation: from organisations that once carried out a limited defence of workers’ wages and conditions within the framework of the profit system, to the chief enforcers of the dictates and demands of capital.

In this role they have been aided and abetted by all the pseudo-left organisations, which have worked to promote the deadly illusion that workers’ struggles must be directed through the unions and that social change can come only through the Democratic Party in the US or via social democratic parties in other countries.

However, a new factor has now entered the scene. The ongoing and intensifying offensive by the ruling elites is provoking an upsurge of the class struggle—seen in the strikes by teachers and educators in the US and elsewhere, the “yellow vest” movement in France, the wildcat strikes in Mexico, strikes against wage freezes in Europe and the mass protests in North Africa.

The crucial issue confronting this growing movement, as yet only in its initial stages, is the development of a program and perspective. It must be based, first of all, on the understanding that all the great social issues confronting the working class, reflected most clearly in the escalation of social inequality, arise from a systemic crisis of the global capitalist order.

This means they can be resolved only with a program that is equally systemic, aimed at their root cause. That is, the growing struggles of workers around the world must be armed with an internationalist socialist program directed to the overthrow of the profit system, the taking of political power by the working class and the building of the world party of socialist revolution to lead this struggle.