The impact of the pandemic on childcare in the US: A social catastrophe affecting generations

Nick Barrickman & Linda Rios

The coronavirus pandemic has exposed the complete inability of the capitalist system to serve the basic requirements of society at every level. In addition to the death and destruction of human life taking place across the planet, the capitalist system must be particularly indicted for the detrimental impacts upon the youngest and most vulnerable.

The broader impact of such a crisis on the childcare system is impossible to calculate. In the case of small childcare business owners, many will be followed by a trail of debt which will haunt them for years to come. Parents, under immense economic and social pressure to return the work, will find limited options for childcare available. Families will be uprooted, deeply affecting young lives in the process.

The impact of the COVID-19 pandemic on early childhood development

Early childhood development programs which serve children at pre-Kindergarten ages (0-5 years of age) are vital to the cognitive and social functioning of the young in the first stages of their lives.

According to the federal government, there are roughly 21.4 million pre-Kindergarten children and 1.7 million healthcare workers in the United States. Reports from the Hunt Institute show that as of last week, 17 states in the US have closed all childcare facilities for fear of contagion. All other states still allowing such facilities to remain open are doing so at risk to their staff and the families they serve.

As the pandemic has forced governments to enact social distancing protocols, many teachers and businesses have sought to maintain relationships with their students through online instruction. In early childhood development, such a medium holds little value.

An article published in March by the National Association for the Education of Young Children (NAEYC) CEO, Rhian Evans Allvin, titled “Making Connections: There’s No Such Thing as Online Preschool,” plainly states: “The reality is that there is no online equivalent to preschool.”

The article references a 2015 National Research Council report on childhood development which establishes “the first eight years [as] a profound developmental period that impacts the whole life. Crucial, complex areas of development include the relationship between language and mathematics, self-regulation, social and emotional development, responsible decision-making, physical development, self-management, and relationship skills.”

For a child, such a period of life requires the most attentive care. A child’s future development may be forever altered amid a COVID-19 pandemic, in which they are forced to remain indoors in isolation due to social distancing, or are forced to keep physically separate from peers and adults in public.

“For my older son, online classes have already started [but] I haven’t heard anything yet from my younger son’s teacher,” a mother in California with school-aged children from told the World Socialist Web Site. “My younger son thinks that school at home is the new norm now, he doesn’t really understand what’s going on. He might end up repeating the third grade if he has a difficult time,” she said.

Childcare Providers

In addition to the impact on the individual child, an entire social ecosystem has been upended by the crisis. In a comment to Education Dive, NAEYC head Allvin stated that over 70 percent of child care facilities in the US shuttered within a single week last month. “We’re in a position that so many providers are making decisions about whether they lay off their staff,” she said, that schools can’t “even start to wrap their heads around making content available for families.”

Allvin’s estimate does not include smaller entities and organizations which provide child care outside of the NAEYC accreditation system. An article in the Connecticut-based Greenwich Times notes: “myriad small-business childcare providers… that are not incorporated into school readiness programs, and are therefore cut off from subsidy funding,” are being excluded from the various state-level support programs.

A 2019 report produced by Child Care Aware of America found that in over 20 states a majority of childcare establishments were home-based. Lacking corporate sponsorship, such facilities have been forced to consolidate expenses and focus simply on keeping their businesses open for the duration of the pandemic. “There’s no corporate entity—it is just us,” stated Allison Morton, owner of Portland, Oregon-based Small Wonders to USA Today.

According to the National Women’s Law Center, 30 percent of America’s childcare providers will be forced to go out of business after a closure of two weeks or more. Furthermore, a NAEYC survey found that 63 percent of childcare providers would go out of business after a month.

The recently-passed Coronavirus Aid, Relief, and. Economic Security (CARES) Act provides merely $3.5 billion to cover childcare costs for “essential workers” and support some childcare providers, but is totally inadequate to cover the costs of a $99 billion industry in which most providers normally operate on a shoestring budget. The $350 billion Paycheck Protection Program (PPP) contained in the bill will be on a “first-come, first-served basis,” states the same article in USA Today. Smaller businesses, lacking paid accountants and other financial advice, are at a disadvantage in securing such loans.

For many smaller businesses which operate based upon payment from families rather than state-provided subsidies, the impact of the coronavirus will lead to bankruptcy as working parents—themselves in dire financial straits after going a lengthy time without working—will not be able to afford to re-enroll their children.

Childcare Workers

Before the COVID-19 pandemic, early childhood caregivers represented one of the lowest paid and most exploited sections of the working class. According to Vox, the average hourly wage within the childcare industry is $10.82. “We’re overworked, we’re underpaid, and we don’t even exist,” remarks Miren Algorri, a childcare provider from Chula Vista, California, of her situation.

Teachers and childcare staff can hardly afford the cost of a doctor’s bill, and are even less likely to be able to afford the cost of a major medical emergency. As in many industries, coming to work during an illness rather than staying home to recover while forgoing a paycheck is a regular part of daily existence. Likewise, many parents, knowing the health hazards which are posed in a preschool environment, will decide to withdraw their child, leading many facilities to cut staff hours due to a lack of enrollment.

“Inside a preschool, a virus can spread like wildfire,” Suzanne, a childcare worker from San Diego, California, told the WSWS. “We encourage teachers to ‘scan’ the children in the morning at drop-off; if the child appears unwell, we tell the parent the child has to go home, but if it’s the middle of the day, it’s much harder to get hold of parents and parents are much more hesitant to pick up their child. They’ll say ‘I’m working right now, I can’t come get them’ or parents will try to bring in their child the next day while they are still exhibiting symptoms.”

While some facilities have continued providing childcare services to workers deemed essential, state regulators have sought to roll back staffing requirements and other safety regulations in order to allow providers to remain open at minimal costs. In the name of “offering necessary regulatory flexibility,” the New Jersey Department of Families and Children last month waived requirements that childcare facilities hire qualified staff while allowing schools to eliminate fire drills, limits on class sizes, and other rules. After outcry from childcare providers, the state was forced to reinstate its previous standards.

As the COVID-19 pandemic cuts deeper into the heart of modern society, the necessity for independent rank and file organizations representing the interests of all working people becomes all the more imperative. While essential workers such as health care workers and workers in logistics, transport, grocery and other industries deal with the COVID-19 pandemic, childcare professionals are tasked with the critical job of caring for their children, posing the objective need for the class unity of all workers involved in the vital tasks of social life.

As the pandemic exposes the failure of capitalism to address society’s basic needs, the working class must step in to pose a revolutionary challenge to the profit system through the strategy of international socialist revolution.

Transit agencies and governments continue to expose workers and riders to coronavirus pandemic internationally

Sam Dalton

Mass transit systems across the globe are in acute crisis in the midst of the COVID-19 pandemic. While service continues at varying capacities internationally, the deadly conditions facing transit workers and the vulnerability of mass transit systems have impacted nearly every corner of the planet.

The increasing number of deaths and threatened collapse of transit systems are not, in the final analysis, primarily the result of the lethality of the COVID-19 virus, but rather the outcome of an ill-prepared and criminal response by the ruling class to a foreseeable public health crisis.

In the United States, at least 61 transit workers have died from COVID-19 at the epicenter of the pandemic in the New York City, as well as four school bus drivers. In Philadelphia, at least three transit workers have died from the virus. Across the country transit workers have died in Chicago, Boston, Detroit, Philadelphia, Cincinnati, St. Louis, Newark, Austin, New Orleans, and in Washington state, Virginia, and Connecticut. Given a scarcity of information and the failure to report deaths outside hospitals in the US, the number of fatalities and geographical extent of the crisis is likely much greater.

A similar situation exists in Europe. In the United Kingdom, at least 14 of 28,000 Transport for London (TfL) workers have died from the virus. Régie Autonome des Transport Parisiens (RATP) has confirmed the deaths of at least three of its 63,000 workers.

These deadly conditions and the contempt for workers’ safety are provoking intense anger and a growing rebellion, with wildcat strikes or job actions having taken place by transit workers in Detroit, Birmingham, and San Diego, and bus drivers threatening to strike most recently in Los Angeles.

Transit workers in all corners of the globe are being forced to interact with hundreds and thousands of individuals on any given day and in most places continue to work without basic personal protective equipment (PPE). Conditions in New York are only a foreshadowing of the deaths that will result from an uncontrolled spread of the virus in underdeveloped countries, or the premature slackening of social distancing being planned in the advanced economies.

In the US, Europe and elsewhere, the response of governments has been guided by an overriding consideration: the defense of corporate and financial profits.

The crisis threatens the wider collapse of mass transit systems, many of which were already in dire straits due to decades of systematic attacks on funding from capitalist governments the world over. Huge declines in ridership as a result of the pandemic, the cessation of fare collection, and the knock-on effects of the crisis on other forms of revenue mean that transportation systems are facing collapse. As millions of essential workers, including health care workers, are forced to rely on mass transit to get to work, the social consequences of any such collapse would be catastrophic.

Following an 87 percent decline in ridership in March from the same period last year, the Metropolitan Transport Authority (MTA) in New York, which employs 72,000 workers, saw its bond rating downgraded by S&P Global amidst what MTA Chairman Patrick Foye described as the authority’s “biggest liquidity crisis ever.” Already $44 billion in debt, the operation of the MTA has been increasingly subordinated to the profits of its bondholders in recent years. While the MTA is unable to provide its workers with basic PPE, in 2019 over 16 percent (or $2.6 billion) of its operating budget was spent on repaying bondholders.

Fare revenue has collapsed throughout the US. Other forms of income for transit authorities, such as sales taxes in Illinois, payroll taxes in Portland, Oregon, and parking fees in San Francisco, have also rapidly declined. Overall, transitcenter.org estimates that US transit systems face a deficit of $26-40 billion.

In Europe, French RATP ridership is down 70 percent. Tube ridership in London was down 88 percent and bus usage down 76 percent, according to Transport for London (TfL) data. TfL’s best case scenario estimates it will lose £500 million in income due to the crisis.

The response of transit authorities and unions to the deaths of workers internationally has been one of criminal indifference. The veneration of workers and crocodile tears shed for those who have died are cynical attempts to mask this callousness. In reality, the primary concern has been to keep workers on the job and convince them that working conditions are safe, despite the failure to provide basic safety equipment.

On April 10, the WSWS reported that following the deaths of 14 London bus drivers, TfL and the Unite union released a joint statement, declaring, “PPE should be reserved for those working directly with people experiencing COVID-19 [i.e. health care workers].” The claim that it is impossible to provide all essential workers with protective equipment—even as trillions are being handed over in a matter of weeks to the major corporations and banks—is a brazen lie and an attempt to pit workers against each other.

In France, RATP President Catherine Guillouard gave an interview on Saturday to France3 in which she praised transit workers fighting “on the frontline of the COVID-19 crisis.” Despite the fact that the lockdown in Paris began almost a month earlier on March 16, the RATP only began to distribute surgical masks to its employees on April 8. Transit workers in other French cities continue to work without any PPE whatsoever. The dangers facing French transit workers are a direct result of the Stalinist Confederation of Labor’s isolation of a six-week transit strike in December and January.

In New York, the MTA, working alongside Transportation Workers Union (TWU) Local 100, initially tried to placate workers’ anger with the provision of surgical masks. Following more outrage, the limited provision of N95 respirator masks finally commenced late last week. Similar measures were taken in Boston by Carmen’s Union Local 589, which represents 6,000 transit workers.

The response of the TWU is a continuation of the role it played in facilitating further attacks on workers in the sell-out contract it pushed through in January. The TWU was silent as MTA Chairman Pat Foye, echoing president Trump’s remarks, attempted to distract from the blood on his own hands by discrediting the World Health Organization (WHO) in a letter to the New York Times defending the MTA’s response.

Despite the TWU’s failure to demand mass testing for workers and its celebration of the provision of inadequate PPE, TWU Local 100 President Tony Utano hollowly declared that “we will come out stronger with tighter bonds after we defeat this evil virus.”

Mass transit systems provide conditions for the virus to rip through large sections of the population in a very short time. Their continued operation without adequate safety measures has already led to thousands of unnecessary deaths, and will no doubt contribute to many more unless workers take matters into their own hands. The failure to protect the masses from the threat of COVID-19 is not the product of a few bad apples in positions of power in the transit agencies, the unions or in government. The incompetence and criminality of the response reflects the bankruptcy of the capitalist class, which subordinates the welfare of billions to its insatiable desire for profit.

The crisis engulfing international mass transit, intensified by the COVID-19 pandemic, is one of the sharpest expressions of the wider conflict between the profit interests of a tiny minority of oligarchs and the life-and-death needs of the working class, the vast majority of society.

What is required is a unified movement of workers across national borders, independent of the trade unions and capitalist political parties, in a struggle for the immediate redirection of resources away from the corporations and towards combating the pandemic and ensuring the safety of the population. This must be carried out as part of the fight for socialism, including the placing of the major corporations, transit systems, and other vital infrastructure under the democratic control of the working class, in order to run them to meet social need, not private profit.

Turkey’s COVID-19 prison amnesty excludes political prisoners, journalists

Baris Demir

Turkey has one of the world’s fastest-spreading coronavirus epidemics, with over 52,000 cases and 1,100 deaths since the first case was diagnosed on March 10. A new bill proposed by the ruling Justice and Development Party (AKP) and its government coalition ally, the Nationalist Movement Party (MHP) brings a partial amnesty to some prison inmates. This comes amid fears that Turkey’s spiraling epidemic could lead to mass deaths if COVID-19 spreads across the prisons.

As many as 90,000 prisoners, roughly one-third of the total, could benefit from the bill, but tens of thousands of political prisoners are excluded, as they have been charged on fraudulent “terrorism” charges. These detainees, including journalists critical of the government, whose trials continue without any concrete evidence, will not be eligible for the amnesty.

The Turkish government is thus taking as an example the British government, which is refusing to release WikiLeaks founder Julian Assange as it releases thousands of prisoners.

In 1998, as mayor of Istanbul, President Recep Tayyip Erdoğan was imprisoned and banned from political activity for four months for inciting religious hatred after he read a poem by Ziya Gökalp. However, he returned to politics in 2002 thanks to a special law supported by the Republican People’s Party (CHP). Today’s amnesty, had it been implemented in 2002, would not have amnestied Erdoğan himself.

Fearing the constitutional court will annul sentences or apply the amnesty to all prisoners in accordance with the principle of equality in the constitution, Erdoğan’s government insists that the bill is not an amnesty but only an “execution arrangement.” This arrangement also paves the way for arbitrary prison sentences for articles or social media posts criticizing the government.

During the pandemic, Turkish prisons have become very dangerous. Overcrowding, insufficient ventilation, lack of sunlight, common toilets and bathrooms, insufficient access to hygienic products and cleaning of dining halls and kitchens, inadequate medical staff, long waiting times for medical treatment, all make it easy for the virus to rapidly spread across an entire prison population.

The crisis in prisons is an international phenomenon. With COVID-19 cases already detected in several Turkish prisons, last week prisoners revolted in the southeastern city of Batman because they are not included in the execution bill. Iran has already released 70,000 in an attempt to prevent the spread of COVID-19, while prison protests and riots have erupted in Italy and Colombia.

The opposition CHP’s mild criticisms of the bill have focused on promoting trust in the state. CHP spokesperson Faik Öztrak complained, “You arrange a remission on execution because of an epidemic. You keep journalists in prisons, you release the thieves. This is clearly political opportunism. ... With the execution arrangement, those who accept bribes will go out; those who report bribery will go to prison.”

CHP officials hypocritically criticize the bill under the mask of democracy, but they are complicit in the AKP’s police state policies. In 2016, the CHP voted for an AKP-backed constitutional amendment stripping the Kurdish nationalist Peoples’ Democratic Party (HDP) deputies of parliamentary immunity. As a result, former HDP leaders Selahattin Demirtaş and Figen Yüksekdağ and several former HDP deputies are still in prison. Nonetheless, the HDP unhesitatingly formed an alliance with the CHP in the last year’s local elections.

In a statement, the HDP, together with various smaller petty-bourgeois parties, reacted to the bill as follows: “The right to health and life of prisoners is supposed to be secured by the state and the government. However, the new regulation proposed by the government shows that the AKP-MHP bloc only thinks of those close to it in this respect. The rights of the opposition members are openly violated. ... Imprisoned politicians, former members of parliament, mayors, journalists, academics, students and citizens who have used their right to freedom of expression in the social media are excluded from this regulation.”

This simply covers up the reactionary record of the Kurdish nationalists themselves. The People’s Protection Units (YPG), the main US proxy force in Syria, holds political prisoners in northern Syria in appalling conditions. Alleged Islamic State (ISIS) fighters and their families are kept in prison camps in horrific conditions, without sufficient food, on the orders of Washington and the other NATO imperialist powers.

According to 2020 data, there are a total of 282,703 prisoners in 355 prisons in Turkey. T24 reported that about 37,000 were jailed on “terrorism” charges, according to the Ministry of Justice statistics. In Turkey, it mostly means non-violent political offences.

When Erdogan’s AKP came to power in 2002, the number of prisoners in the country was just 60,000. While the total population increased less than 20 percent from 65 million in 2002, the prison population almost quintupled. The AKP has built 178 new prisons in this period and 61 new prisons are expected to open in 2020.

The turn towards a mass jailing policy is in line with the AKP’s long-standing drive toward a police state, authoritarian rule at home targeting the working class, and involvement in imperialist wars across the Middle East.

As the WSWS stated in 2017: “Erdogan’s attempt to seize dictatorial powers flows from the war drive with which the imperialist powers responded to the Egyptian Revolution. Under pressure from NATO, the Turkish ruling class abandoned Erdogan’s ‘zero problems with neighbors’ policy and backed imperialist wars for regime change in Libya and then in Syria, initially using Al Qaeda forces as proxies.”

After the defeat of their Al Qaeda proxies in Syria, the imperialist powers settled on working with Syrian and Iraqi Kurdish nationalist groups, instead of the Islamist Free Syrian Army.

The AKP government saw this as a fundamental threat to Turkey’s territorial integrity and stepped up its offensive against Kurdish nationalist groups, ending the “peace process” with the Kurdistan Workers Party (PKK). As a result, thousands of Kurdish politicians, including lawmakers, mayors, and journalists, were imprisoned.

The Syrian war also led to a major shift by the AKP toward a rapprochement with Russia and China, igniting a bitter conflict with the US administration and its European allies. In July 2016, a section of Turkey’s military launched an abortive putsch out of NATO’s Incirlik air base, encouraged by Washington and Berlin.

After the coup attempt, Erdoğan imposed a state of emergency and set about drafting a new constitution to consolidate his power. Some 150,000 public servants and soldiers have been dismissed from their jobs and more than 500,000 people were arrested. More than 30,000 people are in prison, most of whom did not participate in the coup. Hundreds of critical journalists and academics were jailed or forced into exile.

According to a recent Journalists’ Union of Turkey (TGS) report, there are 85 journalists in Turkish prisons, though the real number may be well over 100.

Class conscious workers will defend the rights of political prisoners and journalists. During the pandemic, measures must be taken to protect all prisoners and other vulnerable sections of society. Political prisoners and imprisoned journalists should be released immediately.

German airline Lufthansa receives multibillion-euro bailout, prepares to cut 18,000 jobs

Dietmar Gaisenkersting

Lufthansa, Europe’s largest airline, is exploiting the coronavirus pandemic to implement long-planned attacks on their workforces. Almost all sections of the Cologne-based airline will be impacted.

Due to the travel restrictions imposed in an effort to slow the spread of the coronavirus, global air travel has virtually come to a standstill. Around 700 of Lufthansa’s 763 planes have been taken out of service. Lufthansa has requested or plans to request short-time work for 87,000 of its 135,000 workforce.

Lufthansa airplanes parked at the Willy Brandt Airport (AP Photo)

The company has said nothing about the amount of state support it has received from Brussels, Berlin, Vienna and Bern. But according to trade union sources, the airline is receiving assistance amounting to hundreds of millions of euros per month. The Süddeutsche Zeitung reported on April 6 that loans of up to €10 billion were being discussed.

In a company press release on April 7, Lufthansa noted that it would take months for the travel restrictions to be lifted, and years before the demand for flights reaches pre-crisis levels. Therefore, the board “adopted wide-ranging measures to reduce the capacity of air travel and administration over the long-term.”

Planes will be taken out of service at Lufthansa Airlines, Lufthansa Cityline, and EuroWings. Lufthansa added that the “already initiated restructuring programmes at Austrian Airlines and Brussels Airlines will be intensified due to the coronavirus crisis.” At these airlines, as well as Swiss International, the size of the fleet will be reduced.

The daily Die Welt cited a company spokesman as stating that the airline would end up cutting 10 percent of its capacity. With a combined fleet of 763 aircraft, this would mean the elimination of between 70 and 80 planes. According to Die Welt, a rule of thumb in the airline industry states that around 220 jobs are connected to each large passenger plane, from the crew to caterers and ground staff. This would translate into the loss of between 15,000 and 18,000 jobs.

The subsidiary GermanWings is shutting down operations entirely, eliminating 1,400 jobs and grounding 30 planes. For 18 years, the airline was Lufthansa’s most important budget carrier, or, to put it more accurately, low-wage carrier. For the past four years, it was no longer an independent airline, but was gradually integrated into the Lufthansa subsidiary EuroWings. GermanWings flew the domestic routes for EuroWings.

The plan now is to integrate all EuroWings’ partner airlines under the EuroWings umbrella. This is due to the fact that at EuroWings, which is based in Austria, the wages and workplace benefits are much lower than those at Lufthansa and even GermanWings.

The Independent Flight Attendants’ Organisation (UFO) trade union, together with the services union Verdi, agreed a contract for EuroWings employees based in Germany last year that permits shifts to last up to 14 hours. Employees face wage cuts if they get sick, because Austrian contract regulations apply to their agreement.

Striking Lufthansa flight attendants in Frankfurt in early November 2019

The current round of attacks on thousands of jobs is just the beginning, with Lufthansa’s board declaring that this is a “first restructuring package.” This suggests that further attacks are to come.

The Cockpit Association (VC) trade union and UFO pointed to the “indecent proceedings at GermanWings” in a press release last week. They knew what was coming, because Lufthansa had refused to sign contracts that had already been distributed for short-time work, which included a job guarantee. Lufthansa deliberately avoided applying for short-time work at GermanWings and continued to pay wages in full so it could evade the job protection requirement. The following day, the announcement of the job cuts and winding up of GermanWings was made.

The well-rehearsed show then commenced: the company announced job cuts and the unions protested against them. Shortly thereafter, both parties reported the “success” that the job cuts will not result in “compulsory redundancies.”

On behalf of the employer, Lufthansa announced last Tuesday that it would seek to offer “further employment within the Lufthansa Group for as many as possible,” i.e., not everyone. The unions launched a toothless protest with an online petition to the board. VC president Markus Wahl accused Lufthansa chief executive Karsten Spohr of seizing on “a favourable situation” to “push ahead with the restructuring of the company at the expense of the workforce.”

By this point, UFO had already announced its willingness to do precisely that in partnership with the board. Spokesperson and former union head Nicoley Baublies said that no flight attendant would have to leave “if clever collective solutions are achieved and we exploit natural attrition.” The union is ready to enter talks soon, added Baublies.

One day later, new UFO President Daniel Flohr expressed his satisfaction to the daily Junge Welt that more than 11,000 people had signed the petition “for the retention of flights at GermanWings.”

“In addition, the trade union protest immediately resulted in compulsory redundancies being abandoned and the workers should keep their jobs,” Flohr claimed, however, no details have been presented in writing.

The policy of the trade unions is the direct product of their pro-capitalist orientation. UFO and VC were established and expanded due to widespread anger among workers at the close ties between Verdi and other unions affiliated with the German Trade Union Confederation (DGB) to management. For example, Verdi official Christine Behle is deputy chairwoman of the company’s supervisory board.

But UFO and VC identify just as much with the company’s concerns as Verdi. As soon as Lufthansa offers the smallest indication that it is prepared to negotiate with UFO and VC, the union representatives throw themselves at the company’s feet. This is because their top priority is to be recognised by the board as a trade union rather than waging a genuine struggle against it. When they organise strikes or other job actions, they always do so only against one part of the company, making it easier for the board to compensate for any lost revenue by deploying strike-breakers.

The most recent strike was a three-day stoppage by GermanWings flight attendants over the New Year. The outcome of this strike was that Lufthansa accepted talks, which resulted in a joint statement of intent at the end of January. Both parties, i.e., the company and UFO, “agreed to a multi-part procedure to resolve the conflict,” including a “major” arbitration process, “until the conclusion of which labour peace will prevail at Lufthansa.”

As recently as March 16, representatives of UFO and other unions spoke at an “air travel conference” in Berlin on how the airlines could make it through the coronavirus crisis unscathed. “To an unprecedented degree, employer associations, trade unions and other industry representatives were in agreement today that the emergency measures adopted by the government were welcome, but far from sufficient,” Baublies, who participated on behalf of UFO, enthusiastically reported.

“Profession-based unions with their detailed knowledge of the branch can now use their advantage and will fight to ensure that the particular requirements of the airline sector are protected and special problems resolved,” added UFO president Flohr.

Three weeks later, Europe’s largest airline then announced how it intends to resolve those special problems: with a multibillion-euro bailout from the government and billions more in savings through the elimination of up to 18,000 jobs.

Pandemic Economic Relief: For Elites or Commons

Zia-ur-Rahman

Every crisis is boom for some and bane for others. Over $8 trillion economic package have been announced by north American and European nations plus $1 trillion by Japan whereas total known lobal gold reserves amounts to $9.5 trillion. But where this money will go: business elite or commons. Is this helicopter money as discussed in economic textbooks or win for proponents of Modern Money Theory (MMT). Is this pandemic provide hidden refuge to coming recession as envisaged by analysts from mid-2019? Will it provide another quantitative easing for financial and capital markets in advanced countries? Bailing out the falling markets to continue the ponzi scheme of elites not contravene the basic principles of market economy for unregulated entry and exit of business based on success and failure.

This look more like continuation of crony capitalism arising out of neoliberals’ economics. In the end it will socialism for elite and market capitalism for poor. Neoliberalism initiated by Reagan and Thatcher should explain why healthcare in US fails to coup with pandemic which was first officially announced by China on 8th January. Healthcare sector in US has 20 percent share in  GDP. Why healthcare system consisting of cabal of pharma, insurance, and healthcare need financial rescue despite their size? In US they will be getting $180 billion out of free pie.

The Committee for a Responsible Federal Budget, a non-profit group that tracks US budget deficits, scored total spending under the rescue bill at approximately $2.3 trillion. Here is a look at where most of the money will go, according to the budget watchdog:

HEADS	AMOUNT  (IN BILLIONS)
Lending for large businesses, governments	$ 510
Small business loans and grants	$ 377
Direct payments to most Americans	$ 290
Cuts to business taxes	$ 280
Expanded unemployment benefits	$ 260
Funding for hospitals, healthcare	$ 180
Support for state, local governments	$ 150
Transportation, public transit	$ 72
Social safety net, food and housing	$ 42
Federal emergency disaster assistance	$ 45
Increased spending on education	$ 32
Reductions in individual taxes	$ 19
Other spending	$ 25

Unequal largesse to common is evident in only one head: tax cuts. Tax cuts to business amounts to $280 billion whereas reductions in individual taxes which includes dirty rich elite is paltry $19 billion which is 6.8% of what big businesses will avail. Out $2,282 trillion $1,379 or 60% went to business in way or another and booty for commons was just $569 trillion or 25%.

As in the bailout of banking sector in 2007-8 mortgage cost of Cantillon effect should not be ignored. Richard Cantillon was an economist in the 18th century France who mainly wrote about money and how it circles around the economy.

The so-called Cantillon effect describes the uneven expansion of the amount of money. If a central bank pumps more money into the economy, the resulting increase in prices does not happen evenly. The Austrian economist Friedrich August von Hayek compared this monetary expansion with honey. If you pour honey into a cup, it won’t spread out evenly. It will clump in the middle of the cup first before spreading out.

Same with money: in case of a monetary expansion, the ones who profit from it are the ones who are close to the money. “Close to the money” in this case means everyone who can access the money right at the beginning, i.e. big companies, banks, etc. They get loans and make investments. Prices then start to rise even though the rest of the population has not received any of the new money yet. This part of the population usually is not the one with too much money. Nonetheless, they have to pay the higher prices even though they have not profited from the increase in money at all. And they will never profit from it in the same way as the ones who received the money first. The result is a redistribution from the poor to the rich. Even John Maynard Keynes who was in no way opposed to government intervention and central banks accepted the Cantillon effect as a valid problem.

A very vivid example of Cantillon effect is recent sugar scandal in Pakistan, in which four out of five beneficiaries were close to power corridor in Islamabad. Even in the relief cash and non-cash distributions relief distributions beneficiaries are those who are close to Men in Power (MiP).

The package worth 900 billion rupees ($5.66 billion) was approved in a Cabinet meeting chaired by Prime Minister Imran Khan and also attended by army chief Gen. Qamar Javed Bajwa. It includes 200 billion rupees ($1.25 billion) for low-income groups, particularly laborers, 280 billion rupees ($1.76 billion) for wheat procurement, apart from a significant reduction in petroleum prices. Speaking to journalists in the capital Islamabad, Khan said over 5 million people will be provided a monthly stipend of 3,000 rupees ($20) for the next four months. This amount to Rs.60 billion or 30% of the package.

Also, loan interest payments for exporters had been deferred temporarily, while a package of 100 billion rupees ($63 million) was provided to support small industries and the agriculture sector, he added. So, businesses will be getting 50% of the package. Great divide of neoliberal fascism where businesses are more important than who work for it.

Economic policies should be made in concert with administrative policies otherwise benefits are uneven to different strata of population and detriment to commons. Economists in Pakistan should now move beyond neoliberal, neoclassical, and Keynesian mindset to more innovative solutions targeted to well-being of commons.

Instead of dishing out money to business elites, GoP should also contribute to some percentage of the salaries of workers on the basis of delayed interest free loan and collateral should be the equity of the corporate units. This should also be after due diligence that the corporate need emancipates from ‘shutdown’ and not from absence of risk management on the part of business which is their corporate responsibility. If a business has failed to manage its risk it should face financial slap on wrist as per market mechanism. Looming crisis was evident from de-globalization, global oil crisis, falling demand, accumulatio and rise of gold prices, liquidity crisis in US bank and repo markets. A good business should have anticipated it and have developed plan B.

Covid-19 is a tragedy of the common-but we can collectively mitigate the tragedy. This contagion has provided us a rare opportunity to move from economics from “me” to economics of “us”. This provide economists at IBA to pioneer in innovatively designing an economic system for “us”. Not recommending but citing as an example the work of Elinor Ostrom, the recipient of 2009 noble prize in economics, we should provide academic and intellectual environment to design innovative economic paradigm from over-obsessed focus on “self-interest” to economic models of “collective well-being”. This is the time we move from economics of 1% to economics of 100%. In Pakistan, it is the society which is bailing out commons not business elite or government.

Lastly, government should prioritize agriculture sector instead of construction, as food self-sufficient is vital in pandemic crisis and surplus can be stored and export after supply chain is re-established and supply deficiency will exist until the next cultivation period. Agriculture has large poverty-stricken population which income depend upon completion of harvest and they should have priority income relief program. Rural areas have almost no philanthropy support as urban dwellers have.

South Korea to hold general election

Ben McGrath

South Korea will hold its general election for the National Assembly this Wednesday amid the global COVID-19 pandemic. The various parties of the South Korean ruling class will vie for all 300 seats in the unicameral body, with legislators elected to four-year terms. None have a progressive way forward as the economy declines and workers, farmers, and youth face increased attacks on working and living conditions.

The contest is largely between the ruling Democratic Party of Korea (DP) and the main opposition United Future Party (UFP), which was formed in February following a merger of the right-wing Liberty Korea Party and smaller conservative parties and organizations. The so-called liberal DP is banking on the apparent success of the Moon Jae-in administration’s response to COVID-19, while the UFP has called on voters to “judge” the government, particularly over the economy.

The DP is likely to win the election, with an April 8 Gallup Korea poll showing the ruling party with a 21-point lead over the UFP. However, reflecting broad dissatisfaction with the political system, 18 percent of people did not support any party. Regardless of who wins, the government will remain in the hands of President Moon, a Democrat, whose term does not run out until 2022.

Park Sung-min, the head of political polling company Min Consulting, told the New York Times, “The epidemic sidelined all the policy complaints about President Moon. Instead, people believe that his government has done quite well as they see the epidemic spiraling out of control in other countries.”

However, the ruling class acts to benefit itself. South Korea was one of the hardest-hit countries outside of the Middle East during the 2015 Middle East Respiratory Syndrome outbreak. Seoul’s incompetent response then led to widespread anger, which contributed to the massive anti-government protests a little more than a year later.

Today, Moon’s government responded to the COVID-19 pandemic with police state measures that could easily be turned against the working class, especially as the economy worsens amid growth predictions of less than 1 percent or even negative.

After two days of early voting on Friday and Saturday, voter turnout stands at 26.69 percent, the highest since advance voting was introduced in 2014. The high turnout was attributed to people hoping to avoid large crowds on election day to minimize potential exposure to COVID-19.

South Korea’s election is being held when at least 47 countries around the world have cancelled or postponed elections due to COVID-19. However, ballots will not be gathered from eligible Korean voters living in at least 55 countries, including the United States, affecting an estimated 87,252 people, or little more than half of overseas voters.

In order to provide safety for voters, South Korea’s National Election Commission issued guidelines for voters and polling stations that include maintaining social distancing, regularly sanitizing voting booths, and setting aside separate voting stations for anyone showing symptoms of COVID-19.

It is not out of the question that a state with a long history of falsifying or otherwise interfering in elections could exploit the confusion at polling places to alter results. Most recently, South Korea’s National Intelligence Service interfered in the 2012 presidential election to secure a victory for Park Geun-hye by waging an online smear campaign against then-candidate Moon Jae-in.

The election is also the first under a new law passed last December that changes the manner in which the 47 proportionally allocated seats in the National Assembly are distributed. The new law was supposedly meant to make it easier for minor parties to win seats in the legislature by changing how 30 seats are selected while maintaining the old system for the other 17.

The law faced opposition from conservatives who feared the changes would favour the liberal parties. To take advantage of the new system, both major parties have set up satellite parties, the Together Citizens’ Party affiliated with the DP and the Future Korea Party with the UFP to win additional seats in the National Assembly with the intention of merging them with the main parties after the election.

The new laws also lower the minimum voting age from 19 to 18. Clearly concerned about widespread political disaffection among younger people, UFP’s Kim Dae-ho declared on April 6, “People in their 50s to 70s have logic when they bring up an issue. But people in their 30s to 40s do not have logic but only vague sentiment, huge ignorance, and delusions.”

In a bid to contain the political damage, the UFP expelled Kim the following day and issued an apology.

One blogger in his 30s responded to Kim’s comments online, saying, “All age groups, not only those in their 30s and 40s but also those in their teens and 20s, have their own hardships. If we are that illogical and ignorant, why are they begging us for votes?”

As a result of policies carried out by both Democratic and conservative administrations, wages over the last two decades have stagnated and workers increasingly have difficulty finding stable, regular employment.

A study released at the end of last year by the Korea Economic Research Institute found that from 2008 to 2018, youth unemployment grew by 28.3 percent. While the official unemployment rate for those 15 to 29 hovers around 10 percent, the real rate is more than double this when taking into account those in underpaid part-time positions.

The COVID-19 pandemic will only accelerate the attacks on working conditions. On April 8, President Moon unveiled another massive bailout of big business totaling 53.7 trillion won ($US44 billion). At least 36 trillion won will go to prop up export companies. The government will expect the working class to foot the bill.

Wholesale move to online education across the US: A nightmare for students and educators

Alexander Fangmann

Nearly four weeks have passed since many US states began cancelling in-person classes at all grade levels in response to the COVID-19 pandemic. Immediately many districts announced a transition to online classes via Zoom or other platforms. These measures are far from a panacea. The vast majority of young people are falling drastically behind and are increasingly anxious, while teachers tasked with designing new curricula virtually overnight are overburdened and stressed.

The rapid transition to online education has revealed the inadequacy of preparation for such an eventuality by schools at all levels. In short, it has become a disaster for large numbers of students. At the same time, it is clear that changes being implemented now are only a prelude, as the ruling class uses the crisis to mount even further assaults on public education at the expense of teachers and students.

Not only has it become evident that most school districts and colleges had no real plans for what to do in the event of a disaster of this magnitude, but decades of austerity have left them few viable or coherent options. Worldwide, according to a UNESCO, students in 188 countries are out of school, or over 90 percent of students worldwide. In many places, students have had no schooling at all since schools closed. As of this writing, 21 states have closed schools for the duration of the school year. New York City has, as of this weekend, done likewise.

A student e-learning, wearing a mask. (Stock Image licensed via Envato)

A poll of 849 teenagers conducted by Common Sense Media between March 24 and April 1 indicates that 41 percent reported they had not attended even a single online or virtual class. While some districts are set to start distance learning on Monday, including in Chicago and parts of Oregon, others are set to wait longer.

Even when schools have restarted online, many students are not logging in. According to figures released by Los Angeles schools, around one-third of high school students have not logged into classes daily, while 15,000 have attended none at all. Nationally, 21 percent of students are now “truant,” according to Education Week.

Hundreds of thousands of young people, already traumatized by the lockdowns and deaths or illnesses of family members, are being made more anxious by attempts to learn with unfamiliar or unreliable tools.

“These students were distracted from their world by coming to this building that was outside of the community where they faced all these barriers,” said Malcolm Jones, a teacher in Norfolk, VA, speaking with Education Week. “Now, they’re stuck at home in that chaos. Who can really expect some of these students to do that [academic work packet] when they’re at home starving or they’re at home taking care of their siblings?”

Students that qualify for special education in many states and districts have so far been left out completely. Access Living, an Illinois disability advocacy organization, notes “it is unclear if all missed services will be made up.” In other words, some students may receive no education services at all if it cannot be provided through videoconferencing or over the phone.

With nearly 30 million primary and secondary students in the United States relying on free breakfast and lunch programs at schools, the move to online also threatens increased hunger for students, even for those whose parents are still employed in the midst of record layoffs. After initially setting up food distribution at schools to provide for these students, many districts have cut back on these plans, including Chicago and Detroit, or have eliminated them entirely, as in Houston, Memphis and parts of West Virginia.

An enormous obstacle for many students is a lack of access to technology and internet service. Some schools have been able to provide devices such as laptops or tablets to some students, though it is fairly clear the efforts are leaving many, especially working class students, out of luck. As an example, Chicago Public Schools (CPS) is working to distribute 100,000 devices, a mix of iPads and Chromebooks, to students for online learning. Even with this effort, CPS concedes that around 15,000 students will have neither a computer nor internet access.

Bogdana Chkoumbova, the CPS Chief Schools Officer said, “The unfortunate reality is that our resources remain limited and there remains an unacceptable digital divide in our city and nation,” while Chief Information Officer Phillip DiBartolo said in a letter to principals, “Not all students in our district will get new devices, but our top priority is getting a device to every student who needs one.”

Despite its necessity for online education and other purposes, the Federal Communications Commission’s (FCC) own figures estimate that 19 million Americans lack broadband internet. In all likelihood, the number of households with functionally inadequate internet service is much higher. While some schools are offering wifi hotspots to students without internet access, others are simply directing students to sign up to inferior, low-cost options from internet service providers.

In other words, the educational response to the pandemic—parallel to the medical crisis—takes place on a shoestring budget after years of de-funding. School closures, among the most important public policy measures to implement social distancing, were not implemented as national policy, with some districts still continuing classes. Likewise, district by district, the transition to online education is occurring in a chaotic and haphazard manner.

Many students will not even have an online education experience as schools offer inferior options for students lacking technology or who are unable to use it effectively. These students will be left with the equivalent of correspondence courses, filling out worksheets picked up at school and returning them to school to be graded.

Although college and university students often have better technology and internet access than primary and secondary students, online learning is still only undertaken by a minority of students in higher education. Before the pandemic, only a third had taken online classes and only 13 percent were taking classes exclusively online. As with students in primary and secondary education, the students already struggling the most academically fare worst in an online environment.

Expectations for what students will learn through the end of this academic year are being drastically lowered, with teachers in some districts told not to fail students. Other schools, colleges and universities are moving from assigning distinct course grades to a simple pass/fail system. This is a recognition that neither students nor teachers have been adequately prepared to conduct effective online education.

Real online education requires more work from instructors to do effectively, and it requires students to possess certain skills and abilities they may not have. According to a survey by the education technology company ClassTag, 57 percent of teachers who responded said they were not prepared to teach online.

At the same time as schools and students are struggling, the vultures from the for-profit online education and educational technology companies have been circling overhead. Practically all of them are offering some kind of limited-time access to resources that are usually quite expensive. Many are wagering that schools will be locked into the tools and be willing to pay large sums in the future when the limited free period expires.

K12 Inc., an “education management” company that runs many “virtual” schools and “academies” across the US for local school districts, has seen its stock surge since the beginning of the year. The company, founded by convicted junk bond trader Michael Milken, anticipates increased enrollment at its schools and more districts signing up for its services. According to a report from the National Education Policy Center, virtual schools such as those run by K12 and Pearson’s Connections Academy are marked by poor outcomes for students, with graduation rates of just 50.1 percent, compared to the national average of 84 percent.

Some colleges and universities are also being lured into arrangements with online program management (OPM) companies. In these arrangements, which have expanded greatly since 2014, institutions sign away upwards of 60 percent of their future tuition revenue to these for-profit companies to run their online education programs. Staffed by lower-paid adjuncts, instructional designers and “coaches” instead of full-time faculty, the OPM companies offer a model that the ruling class would like to see expanded throughout higher education.

These companies will be increasingly brought in as the expanding economic crisis begins to hit education funding. Many states and localities are implementing delays or freezes in collecting property and sales taxes, which are often a major source of revenue for schools, threatening a budget disaster over the coming months and the potential for layoffs in the fall, along with higher class sizes. During the last recession, hundreds of thousands of teachers and other education workers were laid off.

Workers should be on guard that the US ruling class will attempt to remake the education system from top to bottom in the wake of the pandemic. US Education Secretary Betsy DeVos, an advocate of child labor, has already called for “rethinking education” in line with the previous Trump budgets for increased privatization.

The massive ongoing bailout of Wall Street and big business have put paid to the claims for decades that there is “no money” for education. It is high time that funding for schools at all levels must be drastically increased. Teachers and students must demand internet and technology access as part of a basic right to education and culture. Training in online platforms should be universally provided and services adapted to meet all learners, to augment in-person education in normal times and allow education to proceed in emergency situations.

Last-minute deal on oil production cuts

Nick Beams

Using a mixture of arm-twisting, threats and a sleight of hand, US President Donald Trump has secured an agreement from Saudi Arabia and Russia to at least temporarily end their oil price war that erupted last month and cut production.

The deal, which Trump pushed for in the wake of the plunge in oil prices, was on the point of collapse over the weekend because of Mexico’s refusal to make cuts to the extent demanded by Saudi Arabia. It was finally stitched together on Sunday.

The fear was that if an agreement had not been reached the oil price would have crashed when trading opened today, after dropping from levels of around $50 per barrel to as low as $20.

Under the deal, Russia and Saudi Arabia will together reduce production by about 9.7 billion barrels a day, more than double the cuts agreed to during the global financial crisis of 2008. Cuts by other oil-producing countries will bring the overall reduction in supply close to 20 million barrels a day, around 20 percent of the total supply.

Oil wells (Stock Image licensed via Envato)

However, there are doubts that even these major reductions will halt the price slide. Global demand for oil has fallen by 30 percent because of the economic impact of the coronavirus pandemic, slashing its price by 40 percent since the beginning of March.

According to the Wall Street Journal: “Investors remain concerned that the cuts may not be enough to support higher prices in the coming weeks as world-wide lockdowns pummel demand for gasoline, diesel and jet fuel.”

It said some analysts had warned they were “too little, too late” with oil consumption expected to fall by as much as 30 million barrels a day throughout this month.

Last week, the talks assumed an on-again off-again character. Agreement appeared to have been reached on Thursday when members of the G20 group, currently under the chairmanship of Saudi Arabia, issued a statement saying they would “commit to doing whatever it takes, both individually and collectively” to ensure that the oil market made a recovery.

Speaking after the G20 meeting, Fatih Birol, an official of the International Energy Agency, said the “shock waves” of the pandemic created the oil price slump and threatened “global economic stability.”

He said the emergency measures would not provide a “quick fix” but, like the effect of confinement in containing the COIVD-19 spread, they could help to “lower the peak and flatten the curve.”

However, in a further sign of the incapacity of global organisations to deal with the deepening economic crisis, the G20 call had little effect.

Mexico continued to insist it would not cut its production to the extent demanded by the Saudis. It only committed to reduce its output by 100,000 barrels a day, well below the Saudi demand for a 350,000 barrel production cut.

Fearing a crash in the markets if the deal failed to go through, Trump stepped into the breach and said the US would compensate for the Mexican shortfall by a reduction of 300,000 barrels per day in American output.

It is unclear how that will take place. The US is not committed to direct cuts claiming that the fall in its output will take place as a result of the drop in market prices.

When the proposal was first raised in the back-and-forth negotiations last week, Trump said he expected the Mexican government would “reimburse” the US in return for American production cuts. He did not specify what he meant and the White House declined to comment when asked for an explanation.

The main factor in pushing the Saudis to the deal was a threat by Trump, issued earlier this month, to impose tariffs on crude imports.

Republican senators from US shale oil-producing states also weighed in, holding a meeting for nearly two hours with the Saudi energy minister on Saturday during which they threatened the long-standing ties between the US and the Saudi regime.

One of the reasons for the decision by the Saudis to launch the price war, after an earlier agreement with Russia had broken down, was to force higher-cost US shale oil producers out of the market.

“The Saudis spent over a month waging war on American oil producers, all while our troops protected theirs. That’s not how friends treat friends,” said North Dakota Republican senator Kevin Cramer after the meeting with the Saudi minister.

In the event, political considerations played a major role in securing the agreement, fragile as it is.

The Putin regime is dependent on oil revenues for about one-third of its budget. With analysts warning that the price collapse threatened to create “a serious risk to the Russia’s economy,” Putin is anxious to avoid such turmoil as he seeks to change the constitution and extend his term of office.

“A month ago, no one could have predicted such a crisis and falling demand,” the Kremlin spokesman Dmitry Peskov told reporters on Friday.

While the Saudis started the war, the resultant precipitous decline in oil prices has put in jeopardy plans by the country’s de facto ruler, Crown Prince Mohammed bin Salman, to transform the country’s economy. His plans for launching infrastructure projects are dependent on oil sales. For his part, Trump is concerned that further price falls will hit oil-producing states that are crucial for his re-election campaign.

He is also fearful that a wave of bankruptcies and defaults could have flow-on effects for financial markets because of the dependence of many shale-oil producers on risky junk bonds for their financing.

As is par for the course, Trump greeted the news of the deal with wildly exaggerated claims. The big oil deal is done, he tweeted on Sunday. “This will save hundreds of thousands of energy jobs in the US.”

However, it is doubtful whether the deal will even hold together and, even it if it does, whether it will prevent a further fall in prices as a result of the greatest contraction in the global economy since the Great Depression.