China’s youth unemployment rate climbs to record high

Jerry Zhang

Young people are facing an unprecedented jobs crisis in China, amid a sharp economic contraction driven by the global slump and COVID crisis.

People wearing masks, walk in a subway station, in Hong Kong [Credit: AP Photo/Kin Cheung]

Last week the government reported that the world’s second largest economy, grew by only 0.4 percent year-on-year in the second quarter. In fact, on a quarter-by-quarter basis, the economy contracted by 2.6 percent in the three months to the end of June.

According to the statistics, in June, the unemployment rate of urban youth aged 16 to 24 was as high as 19.3 percent.

Fu Linghui, a spokesman for the National Bureau of Statistics, attributed this to “the young people entering the labour market for the first time, generally facing the predicament of frictional unemployment, and under the influence of the pandemic, the ability of enterprises to create jobs has declined.”

This explanation angered many young people who are deeply affected by their predicament. The bureau’s statement did not respond to their concerns at all.

According to the statistics, the urban youth unemployment is mainly affecting high school, vocational high school, college and undergraduate graduates. The situation may be worse than officially acknowledged because the bureau’s jobless estimate only measures those who have sought employment in a short period of time.

Since 2018, when the bureau began regularly announcing the youth unemployment rate, it has generally shown an upward trend year-by-year. It has now nearly doubled from the 10 percent recorded just four years ago.

The peak rate generally occurs in July and August with the arrival of the graduation season. But this year the rate jumped to 18.2 percent in April and is still rising.

According to the Ministry of Education, there will be 10.76 million university graduates this year, 1.67 million more than in 2021, and a record high in both scale and growth. This will undoubtedly make the unemployment situation even more severe.

Under the heading of “graduates breaking 10 million for the first time,” a mocking Weibo post received thousands of likes and comments. “Employment is always better last year, unemployment is always worse next year,” it said. “People are becoming more and more ‘Involutionised.’”

The word “involution” is mentioned in many other posts and comments. The term has become a buzzword among Chinese youth over the past few years to describe increasingly fierce competition and meagre returns that are disproportionate to the level of competition.

According to a report published by the Chinese recruitment website Qiancheng Wuyou, more than half of undergraduate graduates intend to pursue a master’s degree, and of those who are pursuing a master’s degree, about 30 percent are considering a doctorate. Such a choice is on the one hand a desire to temporarily escape the pressure of entering the labour market, and on the other hand a response to increasingly fierce competition.

Due to the deteriorating employment environment, more and more young people want to enter more stable large companies and civil service institutions, which leads to higher qualification requirements and discrimination. In May, a piece of news became a hot topic. It reported that “a doctor of nuclear physics who graduated from Peking University successfully obtained a position in a grassroots administrative unit.” This at once caused discussion about “involution” on social media.

In this deteriorating economic environment, young employees above a certain age are also more likely to be laid off. Under the topic “Autumn Recruitment,” a Weibo user asked for help. “Unfortunate things happened. I originally received an offer from a company, but the company HR notified me some time ago that my job offer was temporarily dismissed. Now I only receive a small amount of damages.”

In the comments below the post, many young people shared similar experiences. One wrote: “The company terminated the contract a month ago. The most annoying thing is that the company even refused compensation on the grounds that I didn’t officially join. I can’t get rid of my depression now. Trying to contact the tutor to find a way to postpone my graduation.”

At the same time, widespread distrust of manufacturing industries is affecting the employment situation. Despite much official propaganda urging youth to enter industrial jobs, the chronic and pervasive lack of labour rights protection is driving them away.

One comment voiced the distrust of the propaganda machine and the lack of workers’ rights. “If manufacturing jobs are so attractive, ask the children of economic experts to work in factories first,” it suggested.

According to reports, in the past few years, the service industry has been the main source of youth employment, adding to a large “flexible employment” population. By the end of 2021, according to the National Bureau of Statistics, this “flexible” workforce will reach a staggering 200 million people. This data includes “de-organised, part-time” jobs such as courier riders, dispatching/outsourcing workers and self-employed drivers.

This growth was interpreted by state media as “the active choice of young people” and “a brand new employment situation.” Such reports have been met with widespread outrage, that are depicted as “singing at funerals” and intended to glorify grim unemployment and insecure jobs.

While official spokesmen are still trying to paint a brighter picture, the high unemployment, especially among youth, shows the impact of the global crisis on China’s economy. Previously, the government pinned hopes of economic and employment recovery on a rebound of consumption after the pandemic was contained.

Before COVID-19, the growth of China’s tertiary industry was inseparable from the contribution of private consumption to GDP. However, household consumption has not shown the expected “rebound.”

In addition to the impact of the ongoing pandemic, higher unemployment is reducing overall spending power. Wang Jingwen, a macro researcher at China Minsheng Bank, warned: “If the youth unemployment rate rises further, it may lead to an increase in household precautionary savings, which will put pressure on the entire social consumption and the real estate market. This may lead to social stability problems.”

Dissatisfaction about the economy and jobs is sparking discussions on social media and more broadly at breakneck speed.

Czech Government Scholarships 2023/2024

Application Deadline: 30th September 2022

Eligible Countries: Developing Countries. See list below

To be taken at (country): Public Universities in Czech Republic

Eligible Fields of Study: Students who are applying for study in Economics, Agriculture, Informatics, Environment and Energetics at public universities in the Czech Republic.

About the Award: Thanks to a generous contribution from the Czech Ministry of Education, Youth and Sport, the Faculty of Social Sciences is able to offer a limited number of partial scholarships for students of all fee based programs.. A total of __scholarships are available, ear-marked for students from developing countries and/or countries going through a process of political and economic transition.

Upon a Decision of the Ministry of Education, Youth and Sports, scholarships of the Government of the Czech Republic are granted to promote specific Bachelor’s, Master’s, follow-up Master’s and/or Doctoral study programmes in the full-time mode of study of a specific study programme pursued by a university (or its Faculty) for a period that equals the regular duration of studies. Scholarships are not transferable to other persons or other academic years. Once a scholarship is granted, neither the university nor the study programme and/or field of study may be changed.

Type: Doctoral, Undergraduate and Masters

Selection Criteria and Eligibility

• The scholarships are intended solely to promote the studies of adults who are foreign nationals from developing third countries in need. Neither a citizen of the Czech Republic, nor a citizen of a member state of the European Union, nor any other foreign national with a permit to permanent residence on the territory of the Czech Republic may, therefore, be granted this type of scholarship. Furthermore, the scholarships may not be granted to persons under 18 years of age. (The applicants have to turn 18 as of 1 September of the year when they commence studies in the Czech Republic at the latest.)
• In Bachelor/ Master/ Doctoral Study Programmes plus one-year Preparatory Course of the English language (Which is combined with other field-specific training): Government scholarships of this category are awarded to graduates from upper secondary schools, or Bachelor’s / Master’s degree courses, as applicable, Who can Enroll only in Study Programmes in which instruction is given in the English language. Depending on the subject area, Applicants are normally required to sit entrance Examinations at the higher education institution Concerned. Successful passing of Entrance examination constitutes a precondition for the scholarship award; or
• In follow-up study Programmes Master or Doctoral Study Programmes: Government scholarships of this category are awarded to graduates of Bachelor or Master Study Programmes, respectively, Enroll in the WHO study Programmes with instruction in the English language.

In addition, the Scholarship Review Board will take into consideration applicants’ results from their earlier studies. Priority will be given to students who have not previously had the opportunity to study abroad.

Number of Scholarships: TBC

Duration of Scholarships: These Government Scholarships are designed to cover the standard length of study plus one-year preparatory course of the Czech language(which is combined with other field-specific training).

Value of Scholarships: 

• The scholarship covers the necessary costs related to staying and studying in the Czech Republic. The scholarship amount is regularly amended.
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The above scholarship amounts include an amount designated for the payment of accommodation costs. Costs of accommodation, food and public transport are covered by scholarship holders from the scholarship under the same conditions that apply to students who are citizens of the Czech Republic. Should health services exceeding standard care be required by the student, s/he shall cover them at his/her own cost.

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• Bosnia and Herzegovina,
• Cambodia,
• Ethiopia,
• Georgia,
• Moldova,
• Ukraine,
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How to Apply: Each applicant is obliged to fill in an electronic application form at the latest by 30 September 2022. The successful applicant starts studying in the academic year 2023/2024.

Detailed information on the terms and conditions of scholarship awards is provided in the binding “Guidelines for Granting Scholarships of the Government of the Czech Republic”, issued in Czech and English.

Prospective applicants are advised to read carefully the guidelines before applying.

Visit Award Webpage for Details

US unemployment claims and job cuts mount as interest rate hikes begin to hit economy

Shannon Jones

New US claims for unemployment benefits rose again last week for the third week in a row, as Ford, Stellantis and other auto companies announced job cuts. The interest rate hikes by the US central bank. which are aimed at driving up unemployment to undercut workers’ wage demands, increasingly appear to be having the intended effect as the US economy heads towards a possible recession.

Ford world headquarters in Dearborn, Michigan (WSWS Media)

Initial jobless claims rose to 251,000 for the week ending July 16, up from 244,000 the previous week and well above the pre-pandemic weekly average of 218,000. The four-week moving average rose to 240,000, up 4,500 from the week before. Hiring in June was down 5.4 percent from May, according to data from Linkedin.

Other signs of impending recession abound. The price of copper, a key material used in manufacturing, has fallen 20 percent since January, hitting a 17-month low on July 1. Consumer confidence is at its lowest level since 1952 due to the erosion of incomes by inflation, and the construction of new homes is slowing.

The higher layoff numbers follow rate hikes of a half percent in May and three-quarters of a percent in June. Another one-half to three-quarter rise is expected when the US Federal Reserve meets later this month. The rise in interest rates impacts borrowing and increases the cost of car loans, home mortgages, student loans and credit card debt.

The impact of the looming economic slowdown is evident in the auto industry, which is particularly sensitive to the rise in interest rates, with Ford and several EV makers announcing significant job cuts.

This week Ford said it is cutting 8,000 jobs, mainly from its “Ford Blue” internal combustion engine operations. The layoffs will largely involve salaried staff and are aimed at slashing costs to provide cash for investment in electric vehicles. Most of the cuts will take place in the US.

Ford CEO Bob Farley said the company must cut $3 billion in costs by 2026, the savings coming from the company’s gas engine operations, which he said needs to become the “profit and cash engine” as the global automaker seeks to expand its EV operations.

The meaning of this was spelled out at an automotive conference last February where Farley complained, “We have too many people.” This would come as a surprise to workers who are being forced to work 12-hour shifts and six-day weeks because of COVID-related labor shortages. What Farley meant, however, is that Ford wants to slash costs by squeezing more production out of a smaller, superexploited workforce.

US electric truck maker Rivian Automotive Inc. is also planning to implement layoffs. According to a report in Bloomberg, the cuts could impact 5 percent of the company’s 14,000-strong workforce. Rivian CEO R.J. Scaringe said in a letter to employees, “Rivian is not immune to the current economic circumstances, and we need to make sure we can grow sustainably.”

Meanwhile, electric car maker Tesla is closing its offices in San Mateo, California, impacting 229 jobs. Tesla CEO Elon Musk floated possible job cuts totaling 10 percent of the company’s salaried workforce, declaring he had a “super bad feeling” about the economy.

Stellantis also announced the indefinite layoff of 40 workers at its Warren Stamping Plant located north of Detroit. This follows the layoff of workers at the nearby Sterling Stamping plant in June. Another 98 were laid off in March. Management issued a boilerplate statement saying the layoffs were required to “operate the plant in a more sustainable manner.”

The layoffs come as Stellantis is in the process of slashing the workforce at its assembly plant in Belvidere, Illinois, from 1,800 to about 800 workers. While the workers are being offered transfers to other Stellantis plants, the layoffs put a question mark over that.

A number of tech companies have also indicated plans for staff reductions, including Google, Twitter and Netflix.

The Federal Reserve’s interest rate hikes, which are being presented by the Biden administration as a means to fight inflation, is in fact directed against workers’ attempts to raise wages to meet the soaring cost of living. In the past few months a series of militant strikes and contract struggles have taken place as workers resist the attempt by management and the unions to impose wage settlements far below the current 9.1 percent annual inflation rate.

However, the efforts by the Federal Reserve to increase unemployment to dampen militancy may produce the opposite reaction, serving to further inflame workers’ anger as reflected in posts filling Facebook pages in response to recent job cut announcements.

“Ford’s net profit was $18B in 2021, its executive compensation $22M, for a ratio to the median of all employees’ total compensation of 356 to 1. The productivity of its workers, a loyal bunch, is totally not appreciated. They know where to cut costs, but those making decisions in the boardroom instead choose to fuel inflation to feed their greed,” one worker posted.

“Inexcusable. They made the money off those employees backs and put it in the pocket of the top 1%?? Ford made profits, this is greed and nothing else,” said another.

While announcing cuts, on the one hand, automakers have been imposing forced overtime and recruiting hundreds of temporary and contingent workers, who make a fraction of the pay and benefits of senior workers, to churn out more vehicles.

The Stellantis layoffs are also evoking strong opposition, especially the miserable treatment of contingent workers. A young Stellantis worker in Detroit told the World Socialist Web Site Autoworker Newsletter, “The company has been hiring workers off the streets, and they make them work 10-12 hours a day, six days a week. They hardly get time to sleep, let alone do anything else, like trying to go to school. Every waking moment they’re at work.

“But the factories have been constantly going down because of shortages of microchips, instrument panels and other parts. One week, they’re working 60-70 hours, the next week they are only working 30 hours. The TPTs (temporary part-time workers) can’t collect unemployment benefits and don’t get short workweek pay like full-timers.

“I can sympathize with them because I was a TPT for years before I rolled over to full-time. Their paychecks are like Burger King’s. They make $15, they have some health benefits but no profit-sharing, and if they are laid off, they don’t get (SUB) pay like full-time workers. I was bringing home $572 a week as a TPT when I first started.

“They’re bringing home maybe $700 a week after taxes now. If the plant is down one or two days or a week, they’re losing $100 a day. How can a TPT, especially with a kid or two, live on $400 or $500 a week? It’s impossible.”

To defend jobs and living standards requires workers adopt a global strategy. Ford and other automakers are slashing costs worldwide while they seek to whipsaw workers in different countries in a fratricidal competition over jobs.

In Europe, Ford confirmed this month that it will close its Saarlouis, Germany plant by 2025 at the cost of 4,600 at the plant and another 1,500 workers in related supplier companies. Ford management, with the critical assistance of the unions, pit German Ford workers against workers in Valencia, Spain over who could offer the deepest cuts.

Meanwhile, Ford in India is closing its Chennai manufacturing plant in the state of Tamil Nadu this month at the cost of 4,000 jobs and potentially tens of thousands more in supplier industries. The closure announcement sparked a militant strike by younger workers at the plant, who were betrayed by their union.

New Zealand workers hit by surging living costs

Tom Peters

While New Zealand experiences its worst surge of the COVID-19 pandemic, with more than a hundred deaths per week and hospitals inundated, the working class is simultaneously being hit by soaring living costs.

New Zealand Prime Minister Jacinda Ardern addresses a post-Cabinet press conference at Parliament in Wellington, New Zealand on October 4, 2021. (Mark Mitchell/Pool Photo via AP)

Statistics NZ reported this week that consumer prices increased 7.3 percent in the 12 months to June, the highest annual increase in 32 years. Wages rose on average by less than half this rate, just 3 percent in the year to March, meaning the vast majority of workers experienced a substantial real wage cut.

In the last year alone, the cost of petrol increased by 32 percent and diesel by 74 percent. The cost of building a house rose 18 percent, driven by the shortage of labour and building materials. Food prices increased 6.6 percent. Rents went up 4.3 percent in the past year, and roughly 30 percent since 2017, when the Labour Party entered government.

Last year, according to economics consultancy firm Infometrics, households’ basic costs increased on average by “around $70-$100 per week,” or $3,640 to $5,200 annually.

Around the world, workers are being driven into struggle as inflation forces them to bear the full burden of the economic crisis triggered by the COVID-19 pandemic. Prices for fuel, food and other basic items are being forced up by global supply chain disruptions, caused by the refusal of almost all governments to eliminate COVID, and especially by the US-NATO proxy war against Russia in Ukraine.

The most significant contributors to inflation are the pro-business policies implemented by governments and central banks, particularly over the past two years. The New Zealand Labour Party-led government used the pandemic to funnel tens of billions of dollars to the rich, through subsidies, tax concessions and bailout packages for large corporations.

The Reserve Bank’s quantitative easing measures—it printed $53 billion in 2020–2021 to purchase bonds from the commercial banks—also boosted inflation, especially in the housing market. House prices went up 45 percent during the pandemic, and have only come down about 5.5 percent since the November 2021 peak.

New Zealand’s major banks posted record profits totalling $1.74 billion for the March 2022 quarter, up 8.08 percent on the previous quarter. The four biggest electricity companies increased their combined profits by nearly 60 percent in the second half of last year. Fletcher Building, NZ’s biggest construction company, is forecasting a $750 million profit this financial year.

While the corporate elite enjoys ever greater wealth, Deputy Prime Minister Grant Robertson told Radio NZ on July 19 that most workers should not expect pay increases matching the 7.3 percent inflation rate. He said “there is going to be a period of time when it’s tough,” adding that the Treasury expects wages to increase above inflation after 2022.

There is no reason to believe this will happen. Real wages have stagnated for decades and are now being driven backwards. The government has led the charge, with a public sector wage freeze imposed last year.

A widening layer of the population is being forced into poverty and many are cutting back on food and other essentials. According to a KANTAR survey of about 1,500 people conducted in April, 40 percent of households are spending more than $200 a week on food—up from 35 percent last year. Just 57 percent of respondents are eating five or more servings of fruit and vegetables per day, down from 60 percent last year.

Foodbanks did not exist in New Zealand until the 1980s, when the then-Labour government launched a program of privatisations and pro-market restructuring, triggering tens of thousands of layoffs. Today, hundreds of thousands of people regularly rely on charity to feed themselves and their families.

In Christchurch, Foodbank Aotearoa New Zealand, which supplies food to 106 charities across the city, told Stuff that demand has increased 30.2 percent in the last year. Auckland City Mission says demand for its food parcels has tripled over the past three years.

KidsCan, which provides food in schools for 44,000 children, last month revealed it had a waiting list of 2,000 more children. Its chief executive Julie Chapman says child poverty is the worst it has been since she founded the charity in 2005.

According to official statistics for the year to June 2021, 16.3 percent of children (187,300) live in poverty, after housing costs were accounted for. The reality is undoubtedly much worse. Stats NZ defines poverty as being below 50 percent of the median disposable household income, an extremely low threshold.

Homelessness and housing insecurity are deeply entrenched and continuing to rise. There are currently more than 27,000 people on the waiting list for public housing—five times the number since Labour came to power in 2017. Roughly 4,000 homeless people are in “emergency” accommodation, which typically means motel rooms.

A survey of 4,593 students released this week found that about two-thirds regularly could not afford basic necessities, including food, healthcare costs, clothing and other bills. Students, on average, are paying 56 percent of their income on rent, or $234 a week. One in six reported living in a flat which did not meet their needs, most commonly due to overcrowding, mould, dampness, poor insulation or lack of maintenance.

The survey, dubbed a “people’s inquiry into student wellbeing,” was conducted by the Green Party and the country’s student unions. The final report noted that living allowances, which are only available to a small number of students, have not kept pace with inflation, meaning that “students in 2021 were about $1600 worse off than their counterparts in 1999.”

The report also pointed out that Labour had promised in the 2017 election to restore the student allowance for postgraduate students and to phase in three years of free tertiary study (only the first year is currently free). The government, however, reneged on these pledges.

The Greens, which have been part of the Labour-led coalition government since 2017, are seeking to distance themselves from its austerity measures. Their aim is to capture growing left-wing opposition, especially among young people, and to channel it back into the parliamentary system.

Labour is only able to impose its pro-business agenda because of the support of the Green Party, as well as the trade union bureaucracy, and the pseudo-left backers of these organisations.

The Council of Trade Unions (CTU) responded to the latest inflation announcement with a statement vaguely calling for “continued support for low- and middle-income New Zealanders.” It did not demand immediate pay increases above 7.3 percent for all workers, but instead called for “supporting employers to pay the Living Wage”—which the unions have designated as $22.75 an hour, just above the legal minimum wage of $21.20 an hour.

The unions’ Living Wage Movement Aotearoa previously announced that in September the “living wage” will rise to $23.65, an increase of 90 cents an hour or 3.95 percent, which is well below the soaring cost of living. This underscores the fraud of the “living wage” campaign: it is simply a mechanism to assist businesses and the state in keeping wages down.

This is a continuation of the role the unions have played for decades, in enforcing one sell-out agreement after another, mandating either stagnant pay or real cuts to wages.

Biden’s infection exposes “living with COVID” propaganda

Evan Blake

On Thursday morning, news broke that US President Joe Biden has tested positive for COVID-19. Biden’s infection takes place amid a massive global surge of the Omicron BA.5 subvariant, which nearly every world government has sought to cover up through the dismantling of testing, data manipulation and corporate media propaganda.

The fact that Biden, who is surrounded by a level of security unknown to all but a handful of Americans, has contracted COVID-19 exposes the recklessness of his administration’s “living with COVID” policy. In recent weeks, Biden was made into the poster boy for this propaganda campaign, taking numerous maskless photo ops throughout the world.

Historically, an announcement that the president is ill, especially with a virus responsible for widespread death, would be taken with great seriousness, if for no other reason than it creates a political crisis. Instead, Biden’s bout with COVID-19 has been presented almost as a cause for celebration.

Typical of this trend is an op-ed in the Washington Post by Leana Wen, one of the chief minimizers of the Omicron variant who has supported all of the Biden administration’s unscientific policies. Wen writes, “President Biden’s covid-19 diagnosis is an opportunity for his administration to demonstrate the success of his leadership on the pandemic and what living with the coronavirus looks like.” She adds, “Biden should use his illness as an opportunity to inform the public that covid-19 is a manageable disease for almost everyone, so long as they use the tools available to them.”

Instead of reflecting on their disastrous mishandling of the pandemic—which has now killed over 600,000 Americans in just the first 18 months of his administration—the Biden White House is promoting this same line and stressing that he will continue working while sick with COVID-19, with the implication that all Americans should do the same when infected.

In this image provided by the White House, President Joe Biden speaks with Sen. Bob Casey (Democrat-Pennsylvania) on the phone from the Treaty Room in the residence of the White House on July 21, 2022. (Adam Schultz/The White House via AP)

In a photo op posted Thursday afternoon, which clearly exposed the photographer to the airborne virus, instead of recuperating Biden is shown maskless and working at his desk, with the caption, “Keeping busy!” In a follow-up video, Biden states, “I’m doing well, getting a lot of work done. Going to continue to get it done.”

In a press release, White House Press Secretary Karine Jean-Pierre stressed that Biden “will isolate at the White House and will continue to carry out all of his duties fully during that time… and will participate in his planned meetings at the White House this morning via phone and Zoom from the residence.” She added, “he will continue to work in isolation until he tests negative. Once he tests negative, he will return to in-person work.”

At a press conference Thursday afternoon, co-hosted with media charlatan-turned-White House COVID Response Coordinator Dr. Ashish Jha, Jean-Pierre stated, “With the photo, he took off his mask so that the American people can see him, and see directly, see the work that he’s doing and sitting at his desk, continuing to do his work.” Later in the press conference, she said bluntly, “We knew this was going to happen. As Dr. Jha said when he joined me in the briefing room not too long ago, he said, ‘At some point, everyone’s going to get COVID.’”

Underneath the almost celebratory statements from the White House and the media is a deeply disturbing reality.

The Post commentary concludes that becoming repeatedly infected with COVID-19 will be “the new normal going forward,” even for the president. “Indeed, this is almost certainly not the only time Biden will get the coronavirus. He, like the rest of us, could contract the virus once a year or more.”

An article by Apoorva Mandavilli in the New York Times states, “President Biden’s coronavirus infection is a stark illustration that the Covid vaccines, powerful as they are, are far from the bulletproof shields that scientists once hoped for.” She adds, “even booster doses offer little defense against infection, particularly with the most recent versions of the virus. What protection they do offer wanes sharply and quickly, several studies have shown. In the president’s case, the booster shot he received nearly four months ago is likely to have lost most of its potency at preventing infection.”

Mandavilli notes, “Earlier in the pandemic, experts believed that the vaccines would be enough to forestall not just severe disease, but also the vast majority of infections... But the Omicron variant upended those hopes. As more of the population gained some immunity, whether from infection or vaccines, the virus evolved to dodge those defenses... Each subsequent avatar of the virus has become still better at sidestepping immunity.”

What is described here is a public health and personal health catastrophe.

Numerous studies show that infection with COVID-19 can damage nearly every organ in the body, and reinfections increase the odds of this damage. If the media and politicians were honest, they would tell the American public, “You may be infected and severely ill for days or weeks at a time, once or multiple times per year, and with each reinfection your chances of dying or developing long-term complications will deepen.”

The implication of this “new normal” is that more immune-resistant variants will continue to evolve, spurring repeated waves of mass infection, debilitation and death, potentially for years or decades to come.

A biological ticking time bomb has been set off, and at any point a new variant could evolve that is more transmissible, immune-evading and lethal than any previous variant. With each new variant, the death toll will continue to mount, life expectancy will sink even further, and quality of life will diminish for millions more people suffering from Long COVID.

Despite the happy talk in the media, the US is presently mired in a protracted, steadily worsening surge of Omicron subvariants, with the most infectious and immune-resistant BA.5 subvariant now dominant. While Biden is the most public figure now infected, virtually everyone in the country knows multiple family members, friends or coworkers currently or recently infected with COVID-19.

After a two-month lull in infections, since late March cases have gradually risen across the country, with the official seven-day average of daily new cases rising nearly five-fold to 128,933 on July 20, according to News Nodes. COVID-19 hospitalizations have risen more than three-fold since their April 17 trough, reaching 42,612 on July 20. In the past month, the seven-day average of daily new deaths has surged by 57 percent, reaching 413 on July 20. Each week, as many Americans are now dying from COVID-19 as were killed in the September 11 terrorist attacks.

Since the winter surge of the Omicron BA.1 subvariant, testing has been drastically curtailed across the US, causing a total decoupling of official figures from the actual level of disease in society. The real scale of viral transmission can be seen in nationwide wastewater sampling, which shows that the current surge has surpassed the peak of the Delta variant one year ago.

From the very beginning, the entire American political establishment has held onto the concept that the virus will be stopped partly through vaccination and partly through mass infection, or what was termed “herd immunity” under Donald Trump.

The highly infectious and immune-resistant Omicron BA.1 subvariant, which unleashed the most devastating wave of infections last winter, was treated with thinly-veiled enthusiasm. In January, Dr. Anthony Fauci declared that it could be “the live virus vaccination that everyone is hoping for.” Dr. Jha said he was “hoping that this really is the transition variant that gets us into a different footing.”

The vaccine-only strategy, based on these unscientific conceptions of viral evolution, which numerous principled scientists have cautioned against, has been shattered by the experience of the past eight months. The emergence of the Omicron variant and each of its subvariants proves the most fundamental argument of the Zero-COVID global elimination strategy, that in the absence of proven and essential public health policies the pandemic will not stop.

Alongside the deepening COVID-19 crisis, monkeypox has been allowed to spread through the country almost entirely unchecked. US infections have surged to 2,425, the second highest figure in the world.

The abandonment of all efforts to stop the COVID-19 pandemic, instead demanding that society “live with the virus,” set the stage for the disastrous response to monkeypox and all future infectious diseases. Likewise, nothing is done to stop the ever-growing existential threat of climate change.

American individualism, increasingly promoted for the past four decades, has assumed a socially pathological and criminal character. Public health and all social needs are now entirely subordinated to the profit interests of the corporate-financial oligarchy.

To varying degrees, the same policies have been implemented worldwide with the same recklessness and stupidity of the Biden administration. Every capitalist government outside of China has surrendered to SARS-CoV-2, giving the virus free rein to infect billions of people, mutate into more dangerous variants and wreak havoc on global society for years to come.

Italy’s Draghi government comes to an end

Peter Schwarz

Italian Prime Minister Mario Draghi resigned for the second time in a week on Thursday. This time President Sergio Mattarella has accepted the resignation. The third largest economy in the European Union is therefore without a functioning government.

Draghi speaks ahead of Senate vote of confidence (Photo by governo.it / CC-BY-NC-SA 3.0 IT) [Photo by governo.it / CC-BY-NC-SA 3.0 IT]

In a vote of confidence in the Senate on Wednesday evening, only 95 of 321 members of the Second Chamber of Parliament voted in favour of Draghi and 39 against him. The Lega, Forza Italia and the Five Star Movement, which belong to Draghi’s government of “national unity,” denied him confidence by abstaining from the vote. A planned vote of confidence in the Chamber of Deputies did not take place.

Eighty-year-old President Mattarella dissolved the parliament on the same day. This means that there will be early elections on September 25. Draghi will remain in office until then. The election was scheduled to take place in April next year.

Draghi’s fate is a consequence of the sharp class tensions and social contradictions in Italy. Mattarella appointed the former head of the European Central Bank as head of government in February 2021, when the first wave of the coronavirus pandemic in Italy claimed tens of thousands of lives and the economy was in free fall with a decline of 8.9 percent.

All parties—from the right-wing Lega, Berlusconi’s Forza Italia, the Five Star protest movement to the Democrats and their various split-offs—took refuge behind Draghi, who, as the trusted representative of international finance capital, was to ensure that Italy received the €206 billion it was entitled to from the European Union’s Coronavirus Fund.

The European Commission tied the allocation of these funds to the implementation of a total of 42 “reforms” that would “free the Italian economy from obstacles to growth” and make it more “competitive,” make the state “leaner” and make social systems “more effective”—all slogans for massive attacks on the working class and the lower middle classes.

Draghi lived up to their expectations. He filled central economic posts with external experts, such as the former investment banker and Vodafone boss Vittorio Colao, and advocates of austerity and privatization, such as Giancarlo Giorgetti of the Lega, whom he made Minister for Economic Development.

Draghi “solved” the coronavirus crisis with a massive vaccination campaign led by a high-ranking general. Although it did not stop the spread of the pandemic—with 170,000 deaths in Europe, Italy is second only to the United Kingdom—the high vaccination rate provided the pretext for lifting all lockdown measures and maintaining industrial production and the tourism industry.

With a restructuring of social spending, Draghi relieved the corporations at the expense of the workers. He revoked the pension reform of the previous government, which had lowered the retirement age under certain conditions. He declared the “citizen’s money,” which the Five Stars had introduced instead of social assistance, to be a “flop” and restricted it with strict conditions and control measures.

Draghi’s tax reforms and liberalization measures bailed out large corporations, while the livelihoods of apartment owners and small self-employed, an important clientele of the Lega and the Five Stars, were threatened. Earlier this month, all over Italy, taxi drivers who have paid high fees and are now being driven to ruin by Draghi’s liberalisation measures went on strike.

The “Competition Decree,” which Draghi wanted to use to enforce the so-called Bolkestein Directive of the EU, also had an impact. This stipulates that publicly owned operations run by private individuals are to be put up for tender every few years. This means that, among other things, 14,000 lidos, beach resorts which are mostly run by families, could now be taken over by major investors.

In terms of foreign policy, Draghi pledged Italy’s support for NATO’s war against Russia, although the Lega and Forza Italia reject arms deliveries to Ukraine.

Draghi’s politics met with enthusiasm in the international finance world. The Süddeutsche Zeitung cheered in November of last year, “So far, we must say, things are going splendidly. … The enthusiasm for the unusual dynamics puts Italy in high spirits.” According to Laurence Boone, the OECD chief economist, Italy is “for the first time in many decades in a position to completely rebalance its economy. It’s now or never.”

The Italian working class does not share in these high spirits. Under Draghi, the polarization of the country has intensified further. The official unemployment rate is 8.4 percent, while youth unemployment is 24 percent; 3.4 million workers are precariously employed. The number of poor has risen to 5.6 million during the coronavirus pandemic, with official inflation at 8 percent. Strikes against job losses, low wages and unsustainable working conditions continue.

It is significant that under these conditions Draghi’s government of “national unity” was overthrown by the Five Stars and the right-wing parties, and not by the supposedly left-wing parties.

The Five Stars, which emerged as a protest movement against the political establishment, first governed with the far-right Lega and then with the Democrats and finally supported Draghi, are in free fall and have split. In the polls, they fell from 33 percent in the 2018 parliamentary election to 11 percent.

Foreign Minister Luigi di Maio has left the movement and founded his own party, “Together for the Future,” which Draghi supports. Giuseppe Conte, Draghi’s predecessor as prime minister and chairman of the Five Star Movement, has opposed him.

The Lega and Forza Italia have also lost support in the polls, but not by as much as the Five Stars. They hope to form a right-wing government with the fascist Fratelli d’Italia after the elections. Fratelli never joined Draghi’s government and has become the strongest party in the polls with 23 percent. In the last parliamentary election, they received only 4.4 percent.

Fratelli leader Giorgia Meloni, who worships Mussolini and works closely with the Spanish Vox Party, could become the next Italian prime minister. Together, the right-wing parties of Meloni, Salvini and Berlusconi reached 46 percent in the polls.

The Democrats, their pseudo-left supporters and their allies are responsible for the rise of the right. They are concerned about the stability of the bourgeois order, not the fate of the working class. They suppress workers’ struggles and support Draghi all the more resolutely, the more obvious the anti-worker character of his policies becomes.

After Draghi announced his resignation for the first time last Thursday, they organized a campaign to keep him in office. Two thousand mayors published an appeal; trade unions, entrepreneurs and the Church also called on Draghi to stay.

According to Italian media reports, Emmanuel Macron, Olaf Scholz and Ursula von der Leyen also telephoned Draghi to persuade him to stay. They fear that their war front against Russia will fall apart and that inflation and the looming recession in Europe will be compounded by a renewed euro crisis if the trusted representative of finance capital leaves the Italian seat of government.

The slavish subordination of the trade unions, the Democrats and the pseudo-left under Draghi and his anti-worker policies have created the conditions under which the ultra-right and fascists can exploit the anger and frustration of petty-bourgeois strata and, in some cases, of workers.

Elon Musk sued for reneging on agreement to buy Twitter for $44 billion

Kevin Reed

A Delaware judge ruled on Tuesday that the lawsuit by Twitter aimed at compelling Elon Musk to complete his commitment to buy the social media company will be fast-tracked, denying the billionaire’s request to delay the start of the trial into early 2023.

Chancellor Kathaleen St. Jude McCormick of the Delaware Chancery Court ordered that a five-day trial would begin in October and vowed that it would be settled rapidly. She said that Musk’s legal team was underestimating ”the ability of this court...to quickly process complex litigation.”

Elon Musk (AP Photo/Jae C. Hong)

The chancellor agreed with Twitter’s argument that the company would be harmed by a delay in the proceedings because of the market impact of uncertainty about the future of the company as a publicly traded entity.

McCormick said, “Those concerns are on full display in the present case. Typically, the longer the merger transaction remains in limbo, the larger the cloud of uncertainty cast over the company and the greater the risk of irreparable harm to the sellers.” She added that, if the trial warranted more than five days, she would entertain a request from either side to extend it.

The legal dispute between the social media and microblogging site Twitter and the world’s wealthiest individual Musk is the latest episode in the smarmy dealings of financial elites over the manipulation of stock values under conditions where the S&P 500 has fallen by more than 25 percent this year, wiping out a record $7 trillion.

According to the Bloomberg Billionaires index, the top 500 richest people have lost a combined $1.4 trillion since January. At the beginning of the year, Elon Musk had a personal net worth of $300 billion. As of this writing, Forbes Real Time Billionaire index says that Musk’s wealth stands at $229 billion, or a decline of $71 billion over the last six months.

As for Twitter, its stock was trading at around $48 per share when Elon Musk offered to buy the company for $54.20 per share in April. On Tuesday, Twitter shares were trading at just over $34 each, which is 37 percent less than Musk’s offer and a market cap of $30 billion.

While Twitter plays an important role globally today as a real-time high-tech newswire service for individuals and organizations to issue announcements and comment on contemporary events—and there are also 7,500 people who work there—its fate is now being determined by a handful of super-rich individuals who are preoccupied with one thing: halting the collapse of their personal wealth portfolios.

Chancellor McCormick made it clear that the primary concern of the Delaware Chancery Court in this case is not the ability of Twitter to continue to function or even the jobs of its employees but to bolster the ongoing viability of Wall Street mergers and acquisitions.  

Musk signed a definitive acquisition agreement on April 25 to purchase Twitter for $44 billion, make it his own personal property and remove it from the stock market. As Twitter’s stock value fell dramatically through May and June, Musk announced on July 8 that he was backing out of the deal.

Knowing that his about-face would be contentious, Musk wrote in a letter to the Securities and Exchange Commission that his withdrawal was justified because Twitter was guilty of making “false and misleading representations” about the number of inauthentic accounts on its platform.

In response, Twitter sued on July 12 to compel Musk to go through with the purchase by using a provision of the agreement that is known in corporate law as “specific performance.” Rarely used in merger-and-acquisition disputes, Twitter is pursuing this remedy instead of seeking monetary damages because it expects the resulting deal with Musk, even if contentious, will lead to a substantial increase in the value of the company.

In most lawsuits of this type, specific performance is considered damaging for both parties and not a viable option. However, due to the scale of the Twitter deal—if it goes through, it will be the third-largest tech purchase of all time—the extreme measure is considered prudent in Wall Street circles.

According to the New York Times, the terms of Musk’s commitment are clear: “So long as Twitter fulfills its obligations and the banks fund their commitments, Twitter ‘shall be entitled to specific performance’ of Mr. Musk’s promise to buy the company for the price agreed upon.”

During the hearing before Chancellor McCormick, Musk’s attorneys argued that the start of the trial should be pushed back because of the time needed to investigate the issue of spam and fake Twitter accounts. Musk lawyer Andrew Rossman maintains that the real number of daily active users is critical for determining the true value of the company. He said that the investigation would be “extremely fact and expert intensive, requiring substantial time for discovery.”

Twitter’s lawyers responded that their lawsuit has nothing to do with the number of fake or real accounts on the platform, since the terms of the agreement did not make any commitment on this question. Twitter’s lead attorney William Savitt said, “This issue that Musk says will require such complex discovery is an invented issue. It isn’t what the merger agreement is about. So, it won’t be what the case is about.”

Savitt went on, “Musk has been and remains contractually obligated to use his best efforts to close this deal. What he’s doing is the exact opposite; it’s sabotage.”

Some estimates put the negative financial impact on Musk’s personal fortune at $100 billion by being forced to go through with the Twitter acquisition. His obvious buyer’s remorse puts paid to the cynical and self-serving statements Musk made in April about how “Twitter has extraordinary potential. I will unlock it,” and how important Twitter is as a “platform for freedom of speech around the globe, and…for a functioning democracy.”

Poverty in Germany: Food banks count 2 million people seeking help

Elisabeth Zimmermann

Social inequality in Germany continues to rise at an alarming rate. As a result of the pandemic, war and high inflation, the official poverty rate climbed to 16.6 percent last year, which corresponds to 13.8 million people living in poverty. This means that for ever more people—the unemployed, single parents, low-wage workers, poor pensioners—they no longer have the resources to live on.

This is further expressed in the record numbers of people lining up at the food banks for donations.

Food bank in Munich

Last Thursday, July 14, the chairman of the federal food bank umbrella organization Tafel Deutschland, Jochen Brühl, warned that the food banks would soon no longer be able to cope with the onslaught. As a result of inflation, the pandemic and, since the beginning of the year, the effects of war, demand from people in need has skyrocketed. The number of customers has increased by half and reached a new record high, he said. According to Brühl, well over 2 million people affected by poverty are now taking advantage of free food services, more than ever before.

“The food banks are at their limit and report to us that many people are coming to them who have previously managed to make ends meet and need help for the first time,” Brühl said. Since the food banks can barely, or no longer can, meet the demand, every third food bank has had to stop accepting entrants, according to his data. There is a shortage of food and volunteers to help everyone who asks for support.

Tafel Deutschland surveyed 962 of its member food banks in June and July, 603 of which responded. According to the results, 60 percent of the food banks have seen their customer load increase by up to 50 percent since the beginning of the year. Just under a quarter (22.6 percent) of respondents said they were now supporting 50 to 100 percent more people than before. At 16 percent of the food banks, the number of people seeking help had doubled or more than doubled.

Food banks are a voluntary service and Tafel Deutschland is a non-profit association. The food banks originally came into being with the aim of countering food waste and supporting people affected by poverty by distributing food free, or almost free, of charge. The money thus saved was intended to enable them to afford other urgently needed items. In order to receive support from a food bank, one must register and prove one’s need, for example by a receipt of social assistance (Hartz IV).

As poverty in Germany has increased over the past 15 to 20 years, the number of food banks has also risen. The Hartz reforms of the 1998–2005 coalition government—Social Democrats (SPD) and Greens—provided a particularly strong impetus for this development. They ensured the introduction and expansion of a huge low-wage sector with the introduction of Hartz IV as a subsistence minimum, which in reality was never sufficient and came with a sanctions scheme to put unemployed people under pressure. Both Hartz IV recipients and low-wage workers often have to resort to the food banks to get by.

The dramatic rise in inflation has exacerbated this development and plunged countless working households into poverty and hardship. The “profits before lives” policy of all governments in the coronavirus pandemic, which has already caused millions of deaths worldwide, has accelerated this misery. Inflation is the result of trillion-dollar government giveaways to banks and corporations and the NATO offensive against Russia. At the same time, the vast sums spent on armaments and war are being recouped through cuts in education, health and social services.

Since the beginning of the US/NATO proxy war against Russia, Ukrainian refugees are also increasingly approaching food banks. In this context, the food bank association criticizes the state authorities for passing off their own tasks to the food banks. “It is irresponsible when authorities send people to a food bank without even inquiring whether the food bank can accept new customers,” Brühl said. “That all people in Germany have enough to eat and drink must be guaranteed by the state, not by volunteers.”

But the principle that the state should care for people in need has not applied in Germany for a long time. This fall, millions of people will not be able to afford the doubling and tripling of heating and electricity bills. This will result in many people having their electricity and heating cut and being threatened with the loss of their homes because they can no longer afford to pay rent and utilities.

The Federal Statistical Office recently presented data for the first time for a subset of homeless people in Germany who live in emergency and shared shelters or temporary quarters. The office counted 178,000 of them. Tagesschau.de reported on July 14 that more than one-third of these people are “younger than 25, just under 5 percent 65 or older.” “Families or single parents with children make up 46 percent of the cases.”

Not included in these statistics are “homeless people staying with friends, families or acquaintances, and homeless people living on the streets. Cases of refugees were only included if they had been granted asylum and were accommodated through the emergency housing assistance system.”

The German National Association for Homeless Assistance estimates the number of homeless people in Germany at about 233,000, a figure that in reality could be many times higher.

The Berliner Zeitung reported on June 21 the enormous rush on food banks of those in need. Just in Berlin there are 47 distribution points of Laib und Seele, a partner association of the Berlin Food Bank. One of their distribution points is located in front of the fan club of the Union Berlin soccer team. People lining up for food arrive in the mornings, some even in the early morning hours.

The report quotes a customer who has the number 90 and has been standing in the parking lot since around 10 a.m. “If I’m lucky, I’ll be home by 4 p.m.,” he says. Another with health problems brought a stool because he can’t stand that long. An image shows people lining up in multiple rows to receive food for a contribution of €1.50 and proof of poverty.