NATO summit dominated by growing inter-state conflicts

Alex Lantier

Explosive conflicts over trade and military policy between Washington and its main European allies erupted this week at the NATO summit in London. Intended to mark 70 years since NATO’s foundation in 1949, after the United States had emerged from World War II as the dominant imperialist power, the summit instead descended into mutual recriminations and threats to impose billions of dollars in trade war tariffs between Donald Trump and French President Emmanuel Macron.

A new stage has been reached in the collapse of international institutions that long governed the affairs of world capitalism. Three years ago, divisions inside NATO surged as Britain voted to exit the European Union (EU), Berlin and Paris launched attempts to build an independent EU army, and Trump began to threaten Europe with trade war. Today, it is clear that NATO has no perspective to reduce, let alone overcome, these intractable internal divisions. It is instead escalating policies that pose an acute danger of world war.

Before the summit, the press was dominated by controversy over French President Emmanuel Macron’s interview in Britain’s Economist magazine, in which he declared NATO was “brain-dead” and called US policy on Russia the product of “hysteria.” Macron fueled the controversy, after a crisis meeting with NATO Secretary General Jens Stoltenberg Friday in Paris, by stating that NATO should not make enemies of Russia and China. Instead, Macron proposed to wage a “war on terror”—the pretext for France’s neocolonial war in Mali and its police-state repression at home.

President Donald J. Trump attends the North Atlantic Treaty Organization plenary session Wednesday, Dec. 4, 2019 outside London [Credit: White House]

When Trump arrived in London, he launched a noisy tirade against his ostensible French ally, dismissing Macron’s remarks as “nasty” and “very insulting.” He then tried to whip NATO into line around a policy of military escalation targeting Russia.

On the eve of today’s French public sector strike, Trump also related Macron’s statement on NATO to “yellow vest” protests against the French president’s deeply unpopular austerity agenda. He said: “You look at what’s happening with the yellow vests... They’ve had a very rough year, and you just can’t go around making statements like that about NATO.”

Ultimately, the summit communiqué pledged NATO to hundreds of billions of dollars in military spending increases, more missile deployments in Europe targeting Russia, the war in Afghanistan, surveillance of China, and maintaining nuclear weapons.

This intensifies not only the danger of war, but also the crisis inside NATO itself. Underlying this crisis are objective, historically rooted conflicts between the imperialist powers that twice in the 20th century erupted into world war between. Indeed, Macron’s Economist interview summarized widely held objections in European ruling circles to America’s constant resort to war to offset its growing economic weakness, in the decades since the 1991 dissolution of the Soviet Union deprived NATO of its original common enemy.

Macron made clear that, as when Berlin and Paris opposed the unilateral US-led invasion of oil-rich Iraq in 2003, he sees US policies as a threat to European economic and military interests. He called Middle East policy an “enormous problem for NATO,” after the defeat of NATO proxy forces in Syria, and Turkey’s invasion of the country to attack US-backed Kurdish militias.

Above all, he called for closer ties to Moscow: “If we want to build peace in Europe and rebuild European strategic autonomy, we must reconsider our position towards Russia.” Macron stressed that a key concern of his outreach to Russia was the imminent danger of global war, and that he aimed to “build relations to prevent the world from going up in a conflagration.”

President Donald Trump meets French President Emmanuel Macron at Winfield House, Tuesday, Dec. 3, 2019, in London. [AP Photo/ Evan Vucci]

The French president traced NATO’s bankruptcy not to this or that tactical error, however, but to policies pursued over decades. Though an avowed opponent of socialism, he attacked the pro-capitalist propagandists’ “End of History” argument that the Kremlin’s dissolution of the Soviet Union spelled the final defeat of socialism and the triumph of liberal capitalist democracy. He admitted to the Economist that this false conception set the stage for unpopular NATO wars across the Middle East.

Macron said: “There was a pervasive conception that developed in the 1990s and 2000s, around the idea of the End of History, an endless expansion of democracy, that the Western camp had won and would universalize itself. It was the history we were living until the 2000s, when a series of crises showed that it was not true... Sometimes we committed mistakes by trying to impose our values and change regimes without getting popular support. It is what we saw in Iraq and Libya, and maybe what was planned for Syria, but it failed. It is an element of the Western approach, I would say in generic terms, that has been an error since the beginning of this century.”

Whatever his differences with Macron, Trump recently made a similar point on America’s wars in the Middle East. He tweeted: “The United States has spent EIGHT TRILLION DOLLARS fighting and policing in the Middle East. Thousands of our Great Soldiers have died or been badly wounded. Millions of people have died on the other side. GOING INTO THE MIDDLE EAST IS THE WORST DECISION EVER MADE… IN THE HISTORY OF OUR COUNTRY! We went to war under a false & now disproven premise, WEAPONS OF MASS DESTRUCTION.”

NATO’s decision yesterday to nonetheless escalate militarist policies constitutes a warning to the working class. The basic contradictions of capitalism identified by the great Marxists of the 20th century, above all between world economy and the nation-state system, are explosively asserting themselves. Caught up in crises for which they have no solution, aware of their own political bankruptcy and criminality, and fearing growing opposition from below, the imperialist ruling classes are headed, eyes closed, towards a military catastrophe of horrific dimensions.

The key question facing workers and youth is the building of an international antiwar movement in the working class. Two years ago, analyzing the growing conflicts inside NATO after Brexit and Trump’s election, the WSWS wrote: “The force that will emerge as the alternative to the collapse of bourgeois politics is the international working class. It is being driven into action by intolerable conditions of life, mass unemployment, and social misery after decades of austerity and war.”

Two years later, this analysis has been vindicated by a resurgence of the class struggle. Today, France will erupt in the largest strike wave of Macron’s presidency.

Over the past year, hundreds of thousands of workers in the United States, Europe, Latin America, and Asia have gone on strike as part of a broad, international upsurge of political protest against social inequality and military-police repression. There have been mass strikes or antigovernment protests in Iraq, Lebanon, Algeria, Sudan, India, Sri Lanka, Bolivia, Chile, Catalonia in Spain and Puerto Rico.

This upsurge of class struggle forms the social base for opposing the war drive of the ruling elites. The necessary response to the imperialist war danger is to unify these growing struggles of the working class through the construction of a united, international socialist antiwar movement.

Samoa: Death toll mounts in devastating measles epidemic

Tom Peters

Every day the death toll from measles increases in Samoa, a small Pacific island country with about 200,000 inhabitants. The outbreak began in mid-October. So far 55 people have died—up from 14 on November 17—the vast majority of them children. As of today, over 3,800 have become sick. Scientists at the University of Auckland, New Zealand, predict that before Christmas the death toll will reach 70 and the number of infected will pass 6,500, more than 3 percent of the population.

A tragedy of terrible proportions is unfolding. The government of Prime Minister Tuilaepa Sailele Malielegaoi declared a state of emergency on November 15. Schools, universities, swimming pools and night clubs have been closed and gatherings of children banned. Streets in the capital Apia are largely deserted and many Christmas events have been cancelled.

Some families have lost more than one child. The Guardian recently reported that Tu’ivale Luamanuvae Puelua and his wife Fa’aoso have buried three children, all aged under four. Puelua said: “Your mind becomes empty and you are speechless because there are no words on this earth to describe how my wife and I feel having to say goodbye to our children.”

The outbreak is a man-made disaster. Measles is a preventable disease, but Samoa’s vaccination rate is extremely low: about 30 to 40 percent among young children according to the World Health Organisation (WHO), down from 84 percent four years ago, which is still too low to prevent an outbreak.

Vaccinations plummeted after two babies died in July 2018 from contaminated doses of the measles, mumps and rubella (MMR) vaccine. Two nurses were prosecuted and jailed for negligent manslaughter for mistakenly diluting the powdered vaccine with a deadly dose of anaesthetic instead of water.

The government responded by suspending all MMR immunisations until April 2019, a period of eight months. This extraordinary delay was nothing less than a criminal act of negligence by the state: it left thousands of infant children unimmunised. Radio NZ reported on December 2 that many Samoans say the government “suspended the program for far too long… A lot of people saw this problem coming and there’ll be many questions asked.”

The crisis has been compounded by pernicious, unscientific anti-vaccination campaigns emanating from the US, Australia and other countries. The Washington Post noted that anti-vaccine activist “Robert F. Kennedy Jr., a nephew of President John F. Kennedy, visited [Samoa] in June” and met with Australian Samoan anti-vaccine activist Taylor Winterstein.

Some faith healers and conmen have reportedly sought to profit from Samoa’s epidemic by selling bogus treatments and dissuading people from seeking medical care.

About a third of Samoans have been immunised in recent weeks, but hundreds of new cases are appearing nearly every day, with children most at risk. Measles is less fatal in adults, but poses serious risks including pneumonia, encephalitis and weakened immunity to other illnesses. It can lead to pregnant women giving birth prematurely or miscarrying.

Hospitals are under immense pressure. On November 28, Red Cross health worker Karen Page told Radio NZ Samoan hospitals urgently needed “qualified ICU general and paediatric nurses just to cope with the workload.” Most government departments will shut down on December 5 and 6 so staff can help vaccinate people.

The resurgence of measles is a global phenomenon. During the first six months of 2019 there were more cases worldwide than in any year since 2006, according to the WHO, due to falling vaccination rates. The lies of the anti-vaccination movement have certainly played a role, but the main factor is the lack of well-funded public health services and vaccination programs.

Samoa’s outbreak is suspected to have originated in New Zealand, where, according to the NZ Ministry of Health, immunisation coverage for two-year-olds is 91 percent. This is below the 95 percent threshold needed for what is known as herd immunity, to avoid an outbreak. New Zealand has recorded more than 2,000 measles cases this year.

NZ’s Immunisation Advisory Centre had been predicting the outbreak for years, but governments ignored requests for a “catch-up” immunisation campaign. The decline in vaccinations is particularly bad in rural areas, such as Northland, and in working class South Auckland, which has a large Samoan community and drastically overstretched health services. There is a nationwide shortage of nurses, doctors and other healthcare professionals due to decades of funding cuts.

As well as Samoa, measles has spread from New Zealand to Tonga, where more than 400 people caught the virus but no deaths have been reported. On November 29, Fiji had confirmed 14 cases of the disease.

New Zealand also bears responsibility for the poorly resourced health system in Samoa. The islands were a NZ colony from 1914 to 1962, a period which left a legacy of poverty and economic backwardness. NZ still maintains neo-colonial domination over Samoa, Tonga and other impoverished Pacific countries, which rely heavily on foreign aid to fund public services.

New Zealand and Australia’s ruling elites have invested billions of dollars in diplomatic and economic projects in the Pacific region, and on militarisation, as part of the US imperialist-led effort to counter China’s growing influence in the region. Meanwhile the basic health needs of Pacific people have been neglected.

On November 13, Dr Helen Petousis-Harris, a vaccine specialist at Auckland University, told Radio NZ she was frustrated with New Zealand’s slow response to the Samoan epidemic. The virus was spreading “like a wildfire that is burning now out of control” and an urgent mass immunisation campaign was needed.

Dr Petousis-Harris explained that Samoa has had “a sustained, very low uptake of measles vaccines for years.” Even before the suspension of vaccinations in 2018 an outbreak “was always on the cards.” The regional imperialist powers, Canberra and Wellington, had done nothing to fix the immunisation gap.

The Labour Party-led government in New Zealand waited until November 19, several weeks into the outbreak, before sending an initial team of 10 doctors and nurses to Samoa. There are now 54 NZ medical personnel in the islands, and teams from the UK and French Polynesia.

On December 2, Radio NZ journalist Lisa Owen asked Foreign Minister Winston Peters whether there had been any discussions with Samoan officials earlier in the year to warn them about the potential threat from New Zealand’s outbreak. Peters replied that “conversations were going on,” but gave no details.

Peters admitted that New Zealand had “not been as efficient as we should have been” in vaccinating people, before declaring that now was not the time for the media to be “pointing fingers.”

The deadly outbreak is a damning indictment of successive governments in Samoa and New Zealand, which ignored repeated warnings about the danger posed by low immunisation rates, while starving health services of funds.

Iranian government kills hundreds in bid to suppress the worst protests in decades

Jean Shaoul

According to reports from international rights organizations, opposition groups and local journalists, Iranian President Hassan Rouhani’s security forces have killed more than 400 people since the eruption of mass protests by workers and youth on November 15. The upheavals were triggered by an overnight hike in gas prices and widespread economic hardship. A further 2,000 people have reportedly been wounded and 7,000 arrested during the government crackdown.

Given the government’s five-day internet blackout and the hostility of the Western media towards Iran, it is difficult to know how accurate these figures are and the veracity of the claims and counterclaims as to who was behind the brutal suppression of the protests.

The government acknowledged that 12 people had been killed after three days of protests, while Amnesty International claimed that at least 161 people had been killed across 10 provinces, mostly as a result of live fire. According to the New York Times, which has close links to the US military and security apparatus, the death toll from the government’s crackdown during the last two weeks was between 180 and 450.

Interior minister Abdolreza Rahmani Fazli said that 731 banks, 140 public spaces, nine religious centres, 70 gasoline stations, 307 vehicles, 183 police cars, 1,076 motorcycles and 34 ambulances were attacked and damaged. He said that there had been protests in 29 out of 31 provinces and 50 military bases had been attacked. If true, it implies a level of coordination unseen in previous demonstrations in 2009 and 2017-18, or indeed elsewhere in protest movements in the Middle East.

Hamed, an actor living in a suburb in west Tehran, speaking to the Financial Times about the protesters carrying out the attacks, said, “They were like a gang, marching in the streets with faces covered, destroying specific targets like banks” and they looked like “professionals with sophisticated tools.” He added that some of them “must have been led by foreign forces.” The IRGC claimed that some of the protesters were carrying tools not normally available in Iran. But others suggested the attacks could only have taken place if the IRGC had directed at least some of the protesters in order to provide a pretext for the clampdown.

While the protests began in response to a new rationing system that allows just 60 litres (16 gallons) per month to each passenger vehicle (more for taxis and commercial vehicles) for 15,000 rials per litre—a 50 percent increase, and 30,000 rials per litre, a 300 percent increase on purchases over the 60 litres—they soon spread to encompass broader social, economic and political demands. Hundreds of thousands took to the streets, setting up roadblocks.

With Iran’s petrol prices among the cheapest in the world, many people use their cars as unofficial taxis to earn extra cash to supplement their meagre incomes that have been eaten away by inflation following Washington’s unilateral imposition of sanctions and—crucially—the threat of secondary sanctions against countries trading with Iran. Since then, sales of crude oil have fallen from 2.8 million barrels a day (bpd) to less than 500,000 bpd, gutting foreign exchange earnings.

This, together with years of austerity, imposed by successive governments with the support of all factions of Iran’s political establishment, has led to soaring inflation, mass unemployment, shrinking incomes and ever-deepening social inequality. It has driven many young people out of the city centres into the outer suburbs and satellite towns, where most of the unrest took place. It highlights the utterly reactionary character of the bourgeois clerical regime that has escalated its attacks on the working class as it has sought to reach some accommodation with the imperialist powers.

At first, the government claimed the price rise was necessary to combat smuggling and was in line with IMF recommendations. Although Iran’s central bank had denied that it has sought a loan from the IMF, it soon switched tack when the scale of the protests became apparent. Conceding that there was popular and justifiable anger, government ministers insisted that the real purpose of the gas price hike was to provide greater financial support for impoverished families via a system of monthly cash payments, initially introduced in 2011, that would ultimately benefit nearly 60 million people, more than 70 percent of Iran’s 82 million population.

There are evidently enormous divisions and nervousness within the ruling elite over how to handle the protests. Initially, some of Rouhani’s social conservative rivals opposed the price hikes, but after Iran’s supreme leader Ayatollah Ali Khamenei expressed his support for Rouhani, they backed down.

Khamenei described the violence as the work of a “very dangerous conspiracy,” while Rouhani’s government blamed “thugs” linked to Iranian dissidents in exile and the country’s main external enemies—the United States, Israel and Saudi Arabia. Iran’s Islamic Revolutionary Guard Corps (IRGC), set up in 1979 to defend the country’s bourgeois clerical regime, said that the US had supported the protests by deploying “psychological warfare” and “local mercenaries” in an effort to exert maximum pressure on Tehran.

Some of the worst violence reportedly took place in the southern city of Mahshahr in Khuzestan Province, close to Iran’s largest industrial petrochemical complex and gateway to Bandar Imam, a major port, where IRGC forces surrounded, shot and killed 40 to 100 demonstrators—mostly unarmed young men—in a marsh where they had sought refuge. Mohamad Golmordai, the city’s member of parliament, angrily attacked the government in an outburst that led to a fight in the parliament that was broadcast on Iranian state television and went viral on social media. He said, “What have you done that the undignified Shah did not do?” This was a reference to the bloody suppression of the protest movement in 1978 that brought down the Shah’s tyrannical regime the following year.

Mir Hussein Moussavi, leader of the opposition green movement and presidential candidate in the 2009 election blamed Khamenei for the killings. Moussavi had claimed that the election results had been rigged, triggering mass demonstrations, and has been under house arrest since 2011. He too compared the repression to the 1978 massacre by the Shah’s forces.

There is no doubt that the US, Saudi Arabia, the Gulf monarchies and Israel are seeking to exploit the escalating crisis confronting Iran. The stated objective of the US “maximum pressure” campaign of unilateral sanctions, amounting to an economic blockade, is to drive the country’s oil exports down to zero, while denying it access to the world banking system. This economic act of war is designed to secure the downfall of Iran’s nationalist regime, reduce its influence in the region and install a government that will take its orders from Washington, thereby isolating China and Russia.

Israel’s Prime Minister Benjamin Netanyahu however has been pressing the Trump administration for months to take a more militaristic stance against Iran.

The White House announced that President Donald Trump had spoken to Israel’s Prime Minister Benjamin Netanyahu on the phone on Sunday to discuss Iran and other regional issues. This was only the second time the two have spoken since Netanyahu’s far-right-wing religious bloc failed to win an overall majority in Israel’s September 17 election, the second this year.

In October, Netanyahu accused Iran of “seeking to tighten its grip in Lebanon, in Syria, in Iraq, in Yemen and in the Gaza Strip. It is incessantly arming itself, equipping its offshoots with dangerous weaponry, assaulting freedom of navigation in international shipping lanes. It has downed a large American unmanned aerial vehicle and carried out a blatant and unprecedented attack on oil fields in Saudi Arabia.” He added that Israel will “always remember and follow the basic rule that guides us: Israel will defend itself by itself in the face of every threat.”

Several high-ranking US military officials have either visited Israel or held discussions with their counterparts in the Israeli army over Iran and the growing tensions over Tehran’s role and influence in Syria, Iraq, Lebanon and Yemen. Netanyahu is hoping to secure a meeting with US Secretary of State Mike Pompeo in Lisbon later this week. Last week, Pompeo threatened to impose further sanctions on Iran for “human rights” abuses in suppressing the protests.

His threat follows the remarks of US Central Command chief Gen. Kenneth McKenzie, who claimed that, despite the US build-up of military might in the Gulf, the threat from Iran continued to increase. Such remarks, which have no basis in reality, point to the rising danger of a war in the region that would draw in all the major powers.

Ten trillion dollars of US corporate debt set off alarm bells

Nick Beams

Alarm bells are starting to be rung over the increase in corporate debt in the US and other major economies, fueled by the policies of major central banks in supplying ultra-cheap money to financial markets.

The Washington Post published an article on Saturday noting that US corporate debt had reached almost $10 trillion, an amount equivalent to 47 percent of gross domestic product. It warned that 10 years after the global financial crisis the debt surge “threatens to unleash fresh financial turmoil.”

The newspaper commented that the danger was not “immediate,” but cited regulators and investors who said the borrowing “could send financial markets plunging when the next recession hits.”

This year, the “weakest firms” had accounted for most of the debt growth. It was being used, not to finance investment in plant and equipment, but rather for “financial risk-taking such as investor payouts and deal making.”

One of the most significant features of the debt binge is the purchase by companies of their own stock in order to boost share market valuations. According to Federal Reserve data, US companies have spent more than $4 trillion since 2009 for this purpose, much of it in the past five years.

The quality of the debt is deteriorating, with a rapid rise in lower grade corporate bonds, rated just above junk status. Investors now hold $4 trillion of such bonds, including $2.5 trillion issued by US firms, according to the Standard and Poor’s rating agency.

The article cited comments by Emre Tiftik of the Institute of International Finance, a major finance industry association, who warned: “We are sitting on the top of an unexploded bomb and we don’t really know what will trigger the explosion.”

The rise in corporate debt was highlighted by the International Monetary Fund in its Global Financial Stability Report issued in October, in which it said that “corporate debt vulnerabilities” were “significantly elevated” in a number of countries. The fear is that these “vulnerabilities” could set off a crisis if there is a downturn in the global economy.

“In a material economic slowdown half as severe as the global financial crisis, corporate-debt-at-risk (debt owed by firms that are unable to cover their interest expenses with their earnings) could rise to $19 trillion--or nearly 40 percent of total corporate debt in major economies--above crisis levels,” the IMF said.

The IMF said very low interest rates, which have seen the amount of bonds with negative yields rise to $15 trillion, were “prompting investors to search for yield and take on riskier and more illiquid assets to generate targeted returns.”

Despite the warnings of the dangers, money is continuing to pour into the financing of riskier assets because of the low interest rate regime of the world’s central banks. According to one fund manager cited by the Washington Post, companies were doing the “rational thing,” and that “if you tell them they can borrow cheap and borrow long, they will take advantage of it.”

This is because there is big money to be made. In an article published last week on the warning signs flashing in the US debt market, the Financial Times noted that an index of junk-rated debt run by Ice Data Services has returned almost 12 percent this year as “bullish fund managers look lower down the credit spectrum in pursuit of income.”

The present situation brings to mind the infamous comments by the former head of Citigroup, Chuck Prince. Asked in July 2007, on the eve of the financial crisis, about the group’s continued commitment to leveraged buyout deals, even as danger signs were emerging, he replied, “As long as the music is playing, you’ve got to get up and dance.”

An article published in the Financial Times last week by the senior investment manager at Pictet Asset Management, Galia Velimukhametova, pointed to the rise of “zombie” companies in the major economies. These are firms whose interest costs are in excess of their annual earnings and which are kept alive only because of the low interest rate regime.

“Bank of America Merrill Lynch estimates that there are 548 of these zombies in the OECD club of mostly rich nations against a peak of 626 during the crash,” she wrote, noting that there are five times more zombies today than in the late 1990s, when interest rates were significantly higher.

Velimukhametova pointed to the worsening situation in the quality of corporate debt extending over the past two decades. In the 1990s, the median corporate debt rating from S&P Global was solidly investment grade. Now it is just above junk status. There had been a sharp deterioration in Europe.

“As recently as 2011,” she wrote, “virtually all European corporate loans were issued with solid covenants--the minimum financial thresholds that help ensure a company will be able to meet its obligations. Now more than 80 percent of debt sold by the largest companies is classed as ‘covenant lite,’ offering negligible protection to creditors.”

The US Federal Reserve has also become concerned about the rise in corporate debt and its implications for the stability of the financial system. According to the minutes of its rate setting committee at the end of October, “several officials” warned that “imbalances” in corporate debt had grown during the current phase of economic expansion.

They also raised concerns that “deteriorating credit quality could lead to sharp increases in risk spreads in corporate bond markets,” and this could “amplify the effects of an adverse shock to the economy.”

The Washington Post was more direct. Citing investors and money managers, it said that if the “junk market were to be sufficiently disrupted, companies could be forced to default on their debts.” It added, “That would likely force massive layoffs and sharp reductions in business investment, turning the financial market’s headache into a punishing economic ill.”

Canada’s Human Rights Tribunal condemns government’s treatment of indigenous children

Janet Browning & Roger Jordan

The Canadian Human Rights Tribunal (HRT) has sharply rebuked the Liberal government of Justin Trudeau for its refusal to negotiate the payment of compensation to poor indigenous children and their families. The HRT’s public criticism comes after the Liberals filed a legal challenge to the Tribunal’s ruling that the government must pay $40,000 in compensation to every child in the on-reserve welfare system since January 1, 2006, due to the systematic and massive under-funding of on-reserve child welfare services by successive federal governments.

The original Tribunal order, released in September, said the federal government “willfully and recklessly” discriminated against indigenous children living on reserve by failing to provide funding for child and family services equivalent to the funding provided by provincial governments to children in other areas.

Provincial governments in Canada are generally responsible for funding child welfare services. However, the federal government is responsible for funding on-reserve child welfare services. The government’s failure to live up to its obligations resulted in a “worst-case scenario” under the Canadian Human Rights Act, the HRT concluded.

The Tribunal also ruled that the government knew about the damage the under-funding of the on-reserve child welfare system was having on First Nations children as far back as 2000, but willfully did nothing. The ruling declared, “Canada’s conduct was devoid of caution with little to no regard to the consequences… Canada was aware of the discrimination and of some of its serious consequences… Canada focused on financial considerations rather than on the best interests of First Nations Children.”

The Trudeau Liberal government responded to the ruling by refusing to enter negotiations to arrange the practicalities of the compensation payouts with the First Nations Child and Family Caring Society and the Assembly of First Nations (AFN), the two organizations that filed the initial human rights complaint in 2007. Instead, the government filed a legal challenge to the ruling in Federal Court on October 4, disputing the Tribunal’s authority to order compensation payments in the case.

Although the HRT ordered all parties to present proposals for making compensation payments by December 10, the Liberals have refused to hold a single meeting on the matter with the Caring Society and the AFN.

In a letter published Tuesday announcing an extension of the deadline until January 29, 2020, the HRT said it appeared that the government intends to do nothing to fulfill its order, pending the outcome of Ottawa’s Federal Court challenge.

“With the December 10, 2019 date approaching,” wrote the HRT, “and the indication from parties that Canada has not entered into discussion with them… Canada has potentially opted for non-compliance with the Tribunal’s order until the Federal Court has ruled on the motion… The panel viewed the process as collaborative between the parties and understands that this is not the case at the moment.”

The political wrangling over the compensation payouts, which could amount to some $8 billion if all 50,000 First Nations children are fully compensated, underscores the political elite’s callous contempt for Canada’s impoverished indigenous population. Despite the case’s exposure of horrific social conditions both on- and off-reserve, the Liberals are not concerned with doing anything substantive to change them.

Social conditions for indigenous people on-reserve in Canada resemble those in the world’s most underdeveloped countries. Many First Nations people do not have access to clean drinking water, decent housing, and basic public services like education, healthcare, and social welfare.

Overall, 47 percent of First Nations children live in poverty, more than two-and-a-half times the national rate. That figure rises to 53 percent for First Nations children living on reserves. Those responsible for tabulating Canada’s official poverty statistics do not even examine the situation on reserves except during census counts. Moreover, the Liberal government’s newly adopted national poverty line, which is used to track the effectiveness of the government’s poverty-reduction plan, isn’t calculated on reserves.

High rates of poverty on reserves drive young indigenous people to cities, where they are vastly over-represented among the homeless population.

In statistics reported by the federal Indigenous Services Department in 2018, it was revealed that the life expectancy of First Nations people is 15 years shorter than the population as a whole. Infant mortality is between two and three times higher, while the rate of young indigenous people graduating high school on-reserve is only half that of the general population. When they reach adulthood, indigenous people are more than twice as likely than other Canadians to die from avoidable causes, including injuries, alcohol and drug abuse, and treatable diseases like tuberculosis.

According to figures from Statistics Canada based on the 2016 census, four out of every five reserves have median incomes below the official poverty level. A total of 27 reserves reported having median incomes of less than $10,000.

Far from expanding social and economic support for indigenous Canadians, the federal Liberals are focused on cultivating ties with a tiny privileged indigenous elite, so as to facilitate the expansion of energy projects on First Nations’ land and open the reserves to capitalist private enterprise. At the same time, they are imposing social spending cuts. In a report in October, the Parliamentary Budget Office said that federal funding for off-reserve indigenous households would be slashed over the next 10 years to only half of what was provided over the previous decade.

In its ruling, the Tribunal stated that in addition to children, parents and grandparents should be compensated if they had to leave their homes to access welfare services, or those who were denied services under the policy known as “Jordan’s Principle.” Under “Jordan’s Principle,” the needs of a First Nations child requiring a government service are meant to take precedence over jurisdictional issues over who should pay for it.

“These parents and grand-parents experienced pain and suffering of the worst kind,” noted the Tribunal.

In 2003, the Caring Society carefully documented the overrepresentation of First Nations Children in Canada’s child welfare system and how this neglect led to the death of many such children.

Both NDP Leader Jagmeet Singh and Green Party Leader Elizabeth May responded to the HRT ruling by saying that if they led the government it would offer compensation at the level ordered by the Tribunal. Nobody should take such bogus promises seriously. Both politicians spent the recently-concluded federal election campaign pledging to prop up a minority Liberal government and portraying the Liberals as a “progressive” alternative to the Conservatives. There could be no more damning refutation of this monumental fraud than the treatment of Canada’s indigenous population by this and previous Liberal governments.

John Deere demands further job cuts through “voluntary separation program”

George Gallanis

On Wednesday, farm equipment giant Deere & Company announced further plans to cut its workforce through a “voluntary separation program.” The announcement was made just prior to the release of Deere’s fourth quarter earnings, which showed lower net income.

The company revealed in August a plan to cut costs and boost profits through “organizational efficiency,” which the World Socialist Web Site warned at the time meant new rounds of layoffs and attacks on workers. Since then, 163 Deere workers have been laid off across Iowa and Illinois. Another 100 already temporarily laid off workers have had their layoffs extended and 300 workers have seen their hours and pay cut by being forced to downgrade to lower-level roles.

Deere is seeking once again to make workers sacrifice in the name of boosting profits. In this they can count on the full collaboration of the United Auto Workers (UAW), the nominal bargaining agent for 11,200 Deere workers.

In the fourth quarter, ending November 3, 2019, Deere reported net income of $722 million, or $2.27 per share, down from last year’s fourth quarter earnings of $785 million, or $2.42 per share.

Deere warned of further decline in sales, threatening more cuts for the coming year. For the 2020 fiscal year, Deere forecast agricultural equipment sales falling between 5 percent and 10 percent and construction equipment sales declining by as much as 15 percent.

“John Deere’s performance reflected continued uncertainties in the agricultural sector,” said John C. May, Deere’s new chief executive officer. “Lingering trade tensions coupled with a year of difficult growing and harvesting conditions have caused many farmers to become cautious about making major investments in new equipment. Additionally, financial services results have come under pressure due to operating-lease losses.”

Trade war between China and the United States has lowered export incomes of American farmers. According to the American Farm Bureau, in 2017 China imported $19.5 billion of US farm produce. The following year in 2018, China imported $9.1 billion worth of US farm produce. Last year, US shipments of soybeans to China fell to a 16-year low as China bought soybeans largely from Brazil.

A record-setting wet growing season played a large factor, decreasing crop yields for large sections of the American farm belt. The US Department of Agriculture reported some 19.4 million insured acres across the United States went unplanted due to the rains, the highest since the government started tracking it in 2007. American farmers filed a total of 535 Chapter 12 bankruptcy filings, a spike of 13 percent, or 60 bankruptcies, in the past 12 months, the highest since 2012.

Under the newly announced “voluntary separation program” certain segments of the salaried workforce are being threatened with possible involuntary layoffs in the future if they don’t quit, or “separate.” Workers who quit will receive a monetary exit package. The program is intended to reduce the proportion of more senior and higher paid workers.

Ken Golden, Deere’s director of global public relations, said, “Some employees working in precision technologies and other new product programs are examples of those who are not eligible. However, for those who are eligible, the program is offered to employees of all tenures of service.” He continued, “Deere is deploying this voluntary separation program to create a leaner, more focused organization that is more agile and has the skills and competencies needed for the future.”

Deere did not state how many workers would be offered voluntary separation packages. Workers who receive the offer have until the end of the company’s first quarter of the fiscal year 2020 to accept.

Deere is able to slash its workforce knowing full well the UAW will do nothing to oppose it. This is because the UAW operates as an extension of Deere, serving as its managerial arm in enforcing company discipline. In 1997, the UAW imposed a two-tier wages and benefits system, which paid workers hired after 1997 significantly less for doing the same job as those hired before.

Using the same lie also used to ram through sell-out auto contracts, Deere and the UAW told workers the two-tier system was a temporary sacrifice to maintain profits. Since then, Deere has reaped billions.

In 2015, the last UAW-Deere contract negotiation, workers were again told they had to make sacrifices for Deere. The six-year contract imposed by the UAW maintained the hated wage and benefit tier system and increased out-of-pocket healthcare costs. It paved the way for wave after wave of job cuts at the company in the following years. Former UAW-Fiat Chrysler Vice President Norwood Jewell, who has since been sentenced to a token 15 months in prison for his role in the UAW corruption scheme, oversaw the 2015 sellout contract at Deere.

Many Deere workers expressed concerns over potential ballot fraud during the 2015 contract ratification process and called for a recount. At one local, the UAW suspiciously announced the contract was passed by a margin of 51 percent “yes” to 49 percent “no.”

Two years later, after workers were forced to accept a concessionary contract, as the UAW proclaimed, to help Deere stay competitive, the company announced plans to purchase the German-based Wirtgen Group, the largest international road construction equipment maker, for $5.2 billion in cash.

Meanwhile, in December 2017, President Donald Trump signed the Tax Cuts and Jobs Act, which slashed corporate tax rates from 35 percent to 21 percent. In 2018, Deere, instead of paying taxes, was refunded $268 million from the US government.

Deere has also engaged in a stock buyback spree, purchasing $400 million of its own stock to inflate share prices and boost returns to investors and top executives. Former Deere CEO Samuel Allen received a total compensation of $18.2 million in fiscal year 2019. Meanwhile, even as Deere continues its attacks on workers, the company has maintained its dividend payouts to its shareholders.

The growing threat to jobs must be met with a counteroffensive by workers. The UAW has again and again demonstrated that it is a bitter enemy of workers, so workers must take this fight into their own hands by forming rank-and-file factory committees independent of the union. Deere workers must appeal to their brothers and sisters at Caterpillar and the Detroit-based auto companies and other sections of workers in the US and globally to organize a united struggle in defense of jobs and living standards.

Imperialist powers intensify pressure on Iranian regime in wake of protests

Jordan Shilton

French Foreign Minister Jean Yves Le Drian announced this week that Paris is considering triggering a mechanism in the Iran nuclear accord that would facilitate the imposition of United Nations sanctions on Tehran. The provocative declaration is the latest example of a concerted drive by the imperialist powers to intensify pressure on the bourgeois nationalist Iranian regime following the outbreak of protests against fuel price hikes earlier this month.

“Every two months, there is another dent (in the deal by Iran), to the point where today we ask ourselves, and I’m saying this very clearly, about the implementation of the dispute resolution mechanism that exists in the deal,” stated Le Drian during a parliamentary hearing. The French foreign minister was referring to steps taken by the Iranian regime to reduce its compliance with the 2015 nuclear accord—steps that have been provoked by Washington’s abandonment of the deal and the European powers’ refusal to abide by trade and investment commitments they made as part of the agreement.

Le Drian also cited unsubstantiated claims that Iran has sponsored attacks on Saudi interests in the region, an apparent reference to the as yet unexplained attacks on a series of oil tankers in the Persian Gulf this past summer and the firing of missiles by Houthi rebels from war-ravaged Yemen at Saudi oil infrastructure.

The reality is that the escalation of tensions with Iran arises from US imperialism’s reckless drive to consolidate its control over the world’s most important energy-producing region. Over the past 30 years, US imperialism has laid waste to entire societies across the Middle East and Central Asia, from Iraq to Syria and Afghanistan, in a desperate effort to offset its global economic decline with military force.

Far from being a peaceful move, the Obama administration’s support for the Iran nuclear deal in 2015 was aimed principally at bullying Tehran into submission while maintaining Washington’s right to launch provocations and outright military attacks at any time. Obama himself admitted that the only alternative to the agreement was war.

Trump’s abandonment of the nuclear deal last year has been combined with the increased deployment of US military personnel and equipment to the region. At the same time, Trump has strengthened Washington’s support for the despotic Saudi regime, the Gulf states and the right-wing Israeli government, with the aim of pushing back Iranian influence in the Middle East and preparing for military conflict.

Le Drian’s latest comments underscore that the European powers are prepared to resort to no less ruthless means to achieve their interests. Although they opposed Trump’s departure from the nuclear agreement and pledged to create a financial mechanism that would permit Iran to trade with Europe, the pledge was quickly shelved.

Iran has responded, as it is entitled to do under the 2015 agreement if the other parties fail to fulfill their obligations, by reducing its compliance with the restrictions on its nuclear activities. Tehran is now operating 60 IR-6 centrifuges, which were prohibited under the deal and can enrich uranium 10 times faster than other centrifuges. President Hassan Rouhani has also indicated that Iranian scientists will soon start injecting uranium gas into 1,000 centrifuges at a secret facility.

Not to be outdone by its French counterpart, US imperialism has seized on the recent protests in Iran to further intensify tensions. On Tuesday, US Secretary of State Mike Pompeo seized on the protests to accuse the bourgeois-clerical regime of “human rights” abuses. Pompeo asserted that the US government had received some 20,000 messages documenting the violent suppression of the protests, but avoided commenting on details. He went on to threaten the imposition of further sanctions on Iran for “human rights abuses.”

It is indubitable that the imperialist powers, led by the United States, are endeavouring to foment violent, right-wing opposition to the Iranian regime to advance their own reactionary agenda, which includes the economic crippling of the Iranian regime and preparations for war.

That being said, the opposition of growing numbers of workers and poor to the Iranian government is being driven by mounting social tensions. While chief responsibility for the deepening social and economic crisis in the country of 80 million people lies with the brutal sanctions imposed by the imperialist powers, the crisis also underscores the reactionary character of the bourgeois nationalist regime, which is stepping up its attacks on the working class as it seeks to manoeuvre for a deal with the major powers.

Interior Minister Abdolreza Rahmani Fazli acknowledged this week that around 200,000 people joined the protests, which led to the shutting down of internet service for close to a week. Some 7,000 protesters were detained by the regime. According to Amnesty International, at least 143 protesters were killed by the authorities’ violent crackdown on demonstrations. However, Tehran has challenged this figure, alleging that only a dozen or so people were killed in what they characterized as violent clashes between thugs and security forces.

It is also alleged that over 700 banks and 50 military bases were attacked across the country. Anger at privately owned banks has reportedly increased due to a series of corruption cases in which customers have lost money.

The hiking of fuel prices by 50 percent has had a ripple effect on prices for other commodities. Rice, oil, bread and dairy products have increased by between 5 and 10 percent.

The country’s official news agency reported that costs for transport, messenger services and moving goods have jumped by 50 percent. The rial, Iran’s currency, has tumbled from 32,000 per US dollar when the nuclear agreement was struck to 126,000 per dollar today, making costs for basic necessities even more unaffordable.

When the protests initially broke out, government officials, including President Rouhani, acknowledged that people had a right to be angry at the price hike and to protest. Seeking to quell the opposition, the government began making payments into Iranians’ bank accounts, stating that up to three quarters of the population would be eligible for financial support to help offset the increased cost of fuel. However, the regime appears to be retreating on this pledge, with Minister of Labour and Welfare Mohammad Shariatmadari declaring that the government will have to review the bank accounts, assets, and trips abroad of all Iranians to determine eligibility.

While implementing attacks on workers and the poor, the Iranian regime is also responding to the stepped-up pressure by the imperialists by deepening its strategic and military cooperation with Russia and China. Admiral Hossein Khanzadi, commander of the maritime branch of the Iranian army, recently announced that Iran, Russia and China will conduct joint military drills in the Indian Ocean in the near future. Planning meetings between the three countries for the exercise were completed in October.

“A joint war game between several countries, whether on land, at sea or in the air, indicates a remarkable expansion of cooperation,” stated Khanzadi. “[The drills] carry the same message to the world, that these three countries have reached a meaningful strategic point in their relations,” he added.

The admiral went on to declare that the exercise would help secure “collective security” in the region.

There can be no doubt that US imperialism and its allies, through their provocations and bullying, are chiefly responsible for the tense standoff in the Persian Gulf and the mounting threat of war across the region. But the claim made by the Iranian regime that “collective security” can be achieved by establishing a closer military alliance with Beijing and Moscow is reactionary through and through. Such a development merely increases the likelihood that a US-instigated provocation could rapidly escalate into a region-wide conflagration that would quickly draw all of the major powers into a catastrophic war fought with nuclear weapons.

Mercedes-Benz to cut more than 10,000 jobs

K. Nesan

Mercedes-Benz, the best-selling premium automotive brand in the world, announced Friday that it will slash more than 10,000 jobs over the next two years.

Daimler Director of Labor Relations and member of the Board of Management Wilfried Porth announced that “the total number worldwide will be in the five-digits.” In a teleconference with the media, Porth stressed that the process of staff reductions had to be completed by the end of 2022.

The announcement of mass layoff comes two weeks after CEO Ola Källenius announced, to the applause of investors in London, that the company would implement an austerity program to reduce personnel costs by 1.4 billion euros. After two profit warnings in recent months, Källenius promised shareholders and investors that he would do everything necessary to increase their returns.

Mercedes-Benz, founded in 1928 in Stuttgart, employs 300,000 people worldwide and 180,000 in Germany. Baden-Württemberg, a state in southwest Germany, the centre of the German car industry, will be hit particularly hard by the measures. A significant number of car parts producers such as Bosch are dependent on auto manufacture. Overall, some 460,000 workers are employed in car-related industries in Baden-Württemberg alone.

Daimler corporate head office

The announcement is part of an onslaught on jobs in the German and international auto industry. This year alone, 570,000 jobs have been eliminated in India and China. On Tuesday, the German carmaker Audi, a subsidiary of Volkswagen, announced the elimination of 9,500 jobs over the next five years. On Wednesday, BMW announced cuts of more than 12 billion euros ($13.23 billion) by 2022, and on Thursday Bosch announced it will slash another 500 jobs in the city of Reutlingen.

Volkswagen has eliminated 30,000 jobs over the past three years. Ford is currently eliminating 12,000 jobs in Europe and 7,000 in North America. Nissan is cutting 12,500 jobs worldwide. General Motors is closing four plants in the US and Canada and slashing 8,000 jobs.

Growing numbers of workers all over the world are resisting these attacks. In Matamoros, Mexico, tens of thousands of highly exploited workers in the auto parts industry struck for several weeks against both the companies and the unions earlier this year. In the US, 48,000 GM autoworkers participated in the longest auto strike in 50 years. Strikes by autoworkers have also taken place in India, China, Romania, Hungary, the Czech Republic, Germany, France, Britain and other countries.

But wherever these militant struggles break out, they immediately come into conflict with the trade union bureaucracy, which isolates them and sells them out. Germany’s IG Metall, the United Auto Workers in the United States and the other unions long ago ceased to be workers’ organisations that struggle for social improvements and reforms. Instead, they function as a labor police force in the plants, tasked with imposing management’s demands.

The automakers and trade unions justify the attack on jobs and wages by pointing to the global decline in sales and the restructuring of the global auto industry with the introduction of electric and autonomous vehicles. In a statement, Daimler declared, “The automotive industry is in the middle of the biggest transformation in its history. The development towards CO2-neutral mobility requires large investments.”

These drastic measures, which will devastate the lives of hundreds of thousands of workers and their families, have the full backing of the IG Metall union and works council, which collaborated with management in working out the details of the layoffs behind the backs of the workers. When Porth announced the Daimler job cuts, he boasted, “With the key points for streamlining the company now agreed with the works council, we can achieve this goal by the end of 2022.”

Porth refused to give further details on the agreement with IG Metall and the works council. How exactly the key points will be implemented will be worked out in the coming weeks, he said.

According to media reports, however, in addition to the streamlining measures, Daimler and the works council agreed to further personnel cost reductions. Among other things, there will be offers to employees to reduce their weekly work hours. Workers with 40 hours a week will be forced to work fewer hours with less compensation. The company will extend expiring employment contracts for temporary employees in administration only on a very restricted basis. Equally restrictive will be the 40-hour fixed-term contracts for permanent staff.

Two Daimler workers who spoke to the World Socialist Web Site said they learned of the cuts only through the media. Both reported that intense negotiations between management and IG Metall have been taking place since Källenius became CEO six months ago. The workers were convinced that the company chose Friday to announce the cuts in order to avoid worker unrest in the factories. IG Metall has called a works assembly for Monday in the Hans-Martin-Schleyer-Halle, one of the biggest facilities in Stuttgart.

WSWS Autoworker Newsletter campaigners at the Mercedez-Benz plant in Sindelfingen

Daimler is relying on the services of IG Metall to push through its plans. Last Friday, IG Metall organized a so-called day of action on the Schlossplatz in the centre of Stuttgart to dissipate the anger of workers, who are increasingly denouncing the union and its works councils. But even there the union bureaucrats were not able to hide the fact that they are functioning as co-conspirators with the company in planning and implementing the attacks.

IG Metall Regional Director Roman Zitzelsberger offered the collaboration of the union, declaring, “All employers must know: shaping the future is only possible together.” He continued, “Change is coming, and we must not bury our heads in the sand.”

Zitzelsberger, a member of the Daimler Advisory Board with an income of 213,700 euros last year, is currently the chief negotiator for IG Metall in talks with the employers’ organisation Industrieverband Südwestmetal on cost-cutting plans and staff reductions at 160 metal companies in Baden-Württemberg.

The vice-chairman of the General Works Council, Ergun Lümali, made clear that the union fully supports the mass layoffs and is concerned merely that the restructuring be implemented as effectively as possible: “We don’t just want to have a debate about people. The focus of personnel cost reduction must be on improving processes and work flows,” he said.

The mass layoffs at Daimler and the role of the trade unions in imposing these attacks once again underscores the need for workers to develop their own independent response to the jobs massacre in the international auto industry.

In a recent Perspective posted on the World Socialist Web Site, we wrote: “These developments make clear that workers need an internationalist perspective and a socialist programme to oppose the attacks on their jobs, working conditions, and wages. They confront not only globally operating automakers and their billionaire shareholders, but also the trade unions and works councils, which collaborate with management to draw up the cuts and help implement them. Without breaking from these corrupt, pro-company apparatuses and establishing independent rank-and-file committees to unite their struggles internationally, workers cannot defend a single job.”

The developments at Mercedes-Benz underscore in the sharpest way the correctness of this perspective. Everything now depends on the independent initiative and organization of the workers.

Low wage rises in Australia “become the new normal”

Nick Beams

Two analyses of Australian wages this week have underscored the ongoing suppression of the living standards of the working class.

A survey by PricewaterhouseCoopers (PwC), reported on by Guardian journalist Greg Jericho, found that businesses are underpaying their employees by around $1.35 billion each year. And in a speech delivered on Tuesday dealing with Reserve Bank of Australia analysis of employment and wages, the bank’s deputy governor, Guy Debelle, concluded that “lower wage rises have become the new normal.”

The PwC survey made clear that underpayment goes far beyond the publicised case of MasterChef and extends across the entire economy, amid a worsening economic outlook.

Contrary to government claims that the fundamentals of the Australian economy are in a “pretty good place,” the PwC report posed the question of where growth would come from in the next year.

“Australia’s economic growth remains persistently lower than at any point in the past two decades. It’s forecast to fall even further. With a perfect storm of falling household incomes, wage stagnation, and stalling productivity, economic stagnation presents business leaders with a stark scenario,” the report said.

PwC found that the biggest areas of underpayment were construction ($320 million), health care and social assistance ($220 million), accommodation and food services ($190 million) and retail ($180 million).

This accounts for around “21 percent of the workforce in the selected industries, or 13 percent of the total Australian workforce,” the report said.

It noted that since 1978 Australian gross domestic product on a per capita basis had risen by an average of 1.7 percent, but over the past three years had averaged just 0.8 percent—less than half. Productivity growth had also fallen sharply and was now approaching the levels last seen in the recession of the early 1990s.

Outlining the RBA’s findings on wages in his speech delivered to the Australian Council of Social Service national conference on Tuesday, Debelle said that “wages growth has declined noticeably since 2012” and was now becoming “increasingly compressed.”

This was because there was a “sharp fall in the share of jobs receiving ‘large’ wage rises” and there was an “increased pervasiveness of wage outcomes between 2 and 3 percent.”

While Debelle did not make this point, wage rises of this order mean a continuing real cut in living standards, because the increase in the costs of necessities such as health care, power and housing is greater than the official inflation level.

The transformation of the wages system was underscored by the rapid fall in the number of the workers receiving larger increases.

“The share of jobs that experience a wage change of more than 4 percent has fallen from over one-third in the late 2000s to less than 10 percent of jobs in 2018,” Debelle said. “There is growing evidence to suggest that wage adjustments of 2 point something percent have now become the norm in Australia, rather than the 3-4 percent wage increases that were the norm prior to 2012.”

Figures provided in the speech show how the trade unions, far from providing a counterweight to the fall in real wages, function as the key mechanism for imposing it.

Debelle noted that one expression of the growing downward trend was the “large increase in the share of enterprise bargaining agreements (EBAs) that provide annual wage rises in the 2–3 percent range. The share of such agreements has risen from 10 percent over the 2000s to almost 60 percent in 2019. Over the same period, the proportion of agreements providing wage increases of 3 percent or more has fallen sharply.”

EBAs, which are organised through the trade unions, also mean wages are lower for longer, as there has been a rise in the proportion of EBAs with a term of three years or more.

“The lower wages growth incorporated in these agreements suggests that wages growth of around 2.5 percent for EBA-covered employees will persist for longer than in the past,” Debelle commented.

Apart from wage rises for a given occupation, workers had been able to improve their position by promotion or by changing jobs. But this road is also being closed off.

“Since 2012, there has been a broad-based decline in the proportion of employees that are getting promoted at work or switching jobs. This means that a smaller fraction of the workforce are receiving wage rises,” Debelle said.

In addition to the broad economic data, the bank’s liaison with firms points to the same trend, with rising to 45 percent of firms reporting wage growth of between 2 and 3 percent in recent years, compared to fewer that one in 10 prior to 2012.

Data from the liaison program indicated that around 80 percent of firms expected “stable” wage growth over the year and only 10 percent expecting “stronger” wage raises, reinforcing the bank’s belief that “lower wage rises have become the new normal.”

This process is also reflected in the analysis of employment data presented in the speech.

Debelle noted that while the numbers of workers in jobs had increased, “the past couple of years have been unusual” because the increase in employment had been disproportionately met by an increase in the number of people participating in the labour force.

The two main groups contributing to this rise were females and older workers. Female employment growth accounted for nearly two thirds of the increase in the past year. Of those returning to work within two years of the birth of a child, an increasing number reported “financial” considerations as their reason for doing so.

The report stated: “Financial reasons could be capturing a number of different considerations including low income growth, the rise in household debt or child care costs.” At the other end of the age demographic, there is an increase in the number of older workers in the labour force with “announced and actual increases in pension ages… likely to have contributed to increased participation.”