The secret to the Uber economy is wealth inequality

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WRITTEN BY  Leo Mirani

Of the many attractions offered by my hometown, a west coast peninsula famed for its deep natural harbor, perhaps the most striking is that you never have to leave the house. With nothing more technologically advanced than a phone, you can arrange to have delivered to your doorstep, often in less than an hour, takeaway food, your weekly groceries, alcohol, cigarettes, drugs (over-the-counter, prescription, proscribed), books, newspapers, a dozen eggs, half a dozen eggs, a single egg. I once had a single bottle of Coke sent to my home at the same price I would have paid had I gone to shop myself.

The same goes for services. When I lived there, a man came around every morning to collect my clothes and bring them back crisply ironed the next day; he would have washed them, too, but I had a washing machine.
These luxuries are not new. I took advantage of them long before Uber became a verb, before the world saw the first iPhone in 2007, even before the first submarine fibre-optic cable landed on our shores in 1997. In my hometown of Mumbai, we have had many of these conveniences for at least as long as we have had landlines—and some even earlier than that.
It did not take technology to spur the on-demand economy. It took masses of poor people.

Silicon Valley catches on

In San Francisco, another peninsular city on another west coast on the other side of the world, a similar revolution of convenience is underway, spurred by the unstoppable rise of Uber, the on-demand taxi service, which went from offering services in 60 cities around the world at the end of last year to more than 200 today.

Uber’s success has sparked a revolution, covered in great detail this summer by Re/code, a tech blog, which ran a special series about “the new instant gratification economy.” As Re/code pointed out, after Uber showed how it’s done, nearly every pitch made by starry-eyed technologists “in Silicon Valley seemed to morph overnight into an ‘Uber for X’ startup.”
Various companies are described now as “Uber for massages,” “Uber for alcohol,” and “Uber for laundry and dry cleaning,” among many, many other things (“Uber for city permits”). So profound has been their cultural influence in 2014, one man wrote a poem about them for Quartz. (Nobody has yet written a poem dedicated to the other big cultural touchstone of 2014 for the business and economics crowd, French economist Thomas Piketty’s smash hit, Capital in the Twenty-First Century.)
The conventional narrative is this: enabled by smartphones, with their GPS chips and internet connections, enterprising young businesses are using technology to connect a vast market willing to pay for convenience with small businesses or people seeking flexible work.
This narrative ignores another vital ingredient, without which this new economy would fall apart: inequality.

The new middlemen

There are only two requirements for an on-demand service economy to work, and neither is an iPhone. First, the market being addressed needs to be big enough to scale—food, laundry, taxi rides. Without that, it’s just a concierge service for the rich rather than a disruptive paradigm shift, as a venture capitalist might say. Second, and perhaps more importantly, there needs to be a large enough labor class willing to work at wages that customers consider affordable and that the middlemen consider worthwhile for their profit margins.

Uber was founded in 2009, in the immediate aftermath of the worst financial crisis in a generation. As the ride-sharing app has risen, so too have income disparity and wealth inequality in the United States as a whole and in San Francisco in particular. Recent research by the Brookings Institution found that of any US city, San Francisco had the largest increase in inequality between 2007 and 2012. The disparity in San Francisco as of 2012, as measured (pdf) by a city agency, was in fact more pronounced than inequality in Mumbai (pdf).
Of course, there are huge differences between the two cities. Mumbai is a significantly poorer, dirtier, more miserable place to live and work. Half of its citizens lack access to sanitation or formal housing.
Another distinction, just as telling, lies in the opportunities the local economy affords to the army of on-demand delivery people it supports. In Mumbai, the man who delivers a bottle of rum to my doorstep can learn the ins and outs of the booze business from spending his days in a liquor store. If he scrapes together enough capital, he may one day be able to open his own shop and hire his own delivery boys.
His counterpart in San Francisco has no such access. The person who cleans your home in SoMa has little interaction with the mysterious forces behind the app that sends him or her to your door. The Uber driver who wants an audience with management can’t go to Uber headquarters; he or she must visit a separate “driver center.”

There is no denying the seductive nature of convenience—or the cold logic of businesses that create new jobs, whatever quality they may be. But the notion that brilliant young programmers are forging a newfangled “instant gratification” economy is a falsehood. Instead, it is a rerun of the oldest sort of business: middlemen insinuating themselves between buyers and sellers.

All that modern technology has done is make it easier, through omnipresent smartphones, to amass a fleet of increasingly desperate jobseekers eager to take whatever work they can get.

US wealth gap largest on record

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By Joseph Kishore
19 December 2014

Wealth inequality in the United States is at its highest on record, according to a new report from the Pew Research Center. The analysis confirms previous reports documenting the immense transfer of wealth to the top during Obama administration’s “economic recovery.”

As a measure of wealth inequality, Pew compares the median net worth of upper-income families with the median net worth of middle-income and lower-income families. Upper-income families are defined as those with more than twice the overall median income, adjusted for family size.

In 2013, upper-income median net worth was 6.6 times more than median net worth for middle-income families, up from 6.2 times in 2010 and 3.4 times in 1983, when the Federal Reserve began keeping such records. It is nearly 70 times more than the median net worth for low-income families, also the highest on records going back to 1983.

The data on median household net worth documents a sharp diversion of fortunes over the past 30 years.

Income-Net Worth

In 1983, the median net worth of lower-income families was $11,400 (in 2013 dollars). This had fallen to $9,300 in 2013—down nearly 20 percent. Between 2007 (just before the economic crash) and 2013, median net worth for this layer of the population fell nearly 50 percent, down from $18,000.

In contrast, the net worth of high-income families more than doubled between 1983 and today, rising from $318,100 to $639,400. Since 2007, the wealth of this layer has fallen slightly.

For middle-income families, median wealth is flat over the past 30 years, while it has fallen nearly 40 percent (from $158,400 to $96,500) since 2007.

By the definition used by the Pew report, 21 percent of families are categorized as upper-income. One third of families are categorized as low-income (those with less than two-thirds of the overall median net income), and about half of families are middle-income (between two-thirds and twice the median income).

Thus the Pew report actually underestimates the growth of wealth inequality, since the greatest concentration of wealth is actually accrued to the top one and even the top 0.1 percent of the population.

Earlier this year, a report from economists Emmanuel Saez and Gabriel Zucman found that “virtually all the increase in the top 10 percent and top 1 percent shares over the last three decades is due to the rise in the top 0.1 percent share, from 7 percent in the late 1970s to 22 percent in 2012.”

A separate report from researchers at the University of Michigan found that wealth inequality had doubled since 2003, with households in the top 5 percent now having a wealth that is 426.5 times the average wealth of households in the bottom 25 percent.

The stock market has been a principal mechanism for the transfer of wealth from the working class to the corporate and financial aristocracy. Particularly since the crisis of 2008, Obama administration and Federal Reserve policy has been focused on bolstering the nominal value of shares, which are overwhelmingly owned by the richest segments of the population.

The rise in share prices has been accompanied (and is to be paid for) by the continual driving down of wages, along with the attack on social programs and other restraints on corporate profitability.

Fueled by trillions of dollars through “quantitative easing” programs and near-zero interest rates, the Dow Jones Industrial average has more than doubled since 2009 and has surged nearly 40 percent since the beginning of 2013.

On Thursday, encouraged by the statement from Chairman Janet Yellen that the Fed would be “patient” in considering interest rate increases, the Dow surged 421 points, its largest point gain in three years.

 

http://www.wsws.org/en/articles/2014/12/19/weal-d19.html

A history of state repression in Guerrero, Mexico

By Francisco Alonso On December 12, 2014

Post image for A history of state repression in Guerrero, MexicoThe recent massacre of 43 students shocked the world, but was only the latest act in a long history of state repression in Mexico’s Guerrero region.

The Iguala massacre woke up a society that seems inured to widespread corruption, impunity and brutal violence. Recently, Mexican society did show a reaction to other massacres, like the one that occurred in Monterrey where 52 people died locked up in a casino building after it had been deliberately set on fire. Or in Tamaulipas where 72 Central American migrants heading to the U.S. were kidnapped and murdered after they refused to become hit men or pay ransom for their release. However, what happened in Iguala was different. It was a clear act of political repression and this time the participation of state agents as perpetrators was impossible to hide.

Moreover, the massacre targeted a focal point of political activism in Mexico; a school of teachers, a ‘school of democracy’.  For more than half a century, teachers from Ayotzinapa have been fighting against corrupt policemen, homicidal soldiers, paramilitary forces, caciques (local strong men) and now the narco state. Ayotzinapa has provided a disproportionate amount of leaders toGuerrero’s social movements, including Lucio Cabañas, founder of the Partido de los Pobres (PDLP), the most important rural guerrilla organization during the 1970’s.

On one side the Iguala massacre is an archetypical case — so recurrent in Mexican history — in which a peaceful protest turns into a rebellion because of state repression. On the other hand, although it is by no means new, the fact that repression was carried out by public officers and policemen who were collaborating with hit men from a criminal organization is a present-day distinctive. In such a case a major social outburst is hard to avoid. In this moment, actions taken by the government and civil society will determine if a system collapse will be avoided. As Trejo states, “in Iguala past, present and future converge.” This convergence may be shown by tracing a long cycle of mobilization and repression in Guerrero where impunity has always prevailed, from la guerra en el paraíso to Iguala’s inferno.

Not a Revolution, but a ranchero revolt

According to Ian Jacobs, author of The Ranchero Revolt, Guerrero’s history was shaped by its physical geography. In the early twentieth century there were very few roads in a region with very rough terrain. The lack of roads made land unattractive to elites during the Porfiriato. Hence, the problem of stolen lands did not acquire the dimensions it took in the neighbouring region of Morelos, where sugar cane haciendas dispossessed peasants and generated a fertile ground for the Zapatista rebellion of 1911.

In contrast, Guerrero did not experience widespread usurpation of communal lands in the early twentieth century. Hence, the political evolution of the region was different; without a rebellion such as the one led by Zapata, the Porfirian structure of caciques remained intact during the Mexican Revolution and was even reinforced when caciques disguised themselves as ‘revolutionaries’ and were accepted by the regime during the post-revolutionary decades.

In Guerrero, the Figueroa brothers (Ambrosio and Francisco), who betrayed Zapata on many occasions, imposed themselves as the main overlords. They became the quintessential caciques in the region and founders of the everlasting Figueroa dynasty, a sort of ‘Somosa family’ in Guerrero.

 

 

 

 

December 30, 1960, Chilpancingo, Guerrero

A student demonstration claiming university autonomy was repressed at Chilpancingo, Guerrero’s capital. Seventeen protesters were killed. The massacre forced the governor, general Raúl Caballero Aburto, to resign (Cervantes, 2007). The student uprising evolved into an urban popular movement with presence in many state regions spearheaded by the Asociación Cívica Guerrerense (ACG), a political organization created in 1959 by regime opponents. There were many teachers among them.

December 30, 1962, Iguala, Guerrero

During 1961 the popular movement grew in strength. The provisional local government called for elections to be held in December 1962 in order to renew state and local authorities. The ACG presented José María Téllez as their candidate for Guerrero’s governorship. After losing the elections, they protested against what they considered to be a fraudulent result. Again, demonstrators were confronted by the police and the military.That time the toll of the repression was 8 deaths and 156 arrests.

The ACG leader Genaro Vázquez fled the state but was captured in 1966. ACG members rescued him in 1968 from the Iguala prison and fled to the Sierra (Guerrero’s western highlands), where Vazquez renamed the ACG as Asociación Cívica Nacional Revolucionaria (ACNR) and stated that members of his organization were convinced that the armed struggle was the only means to transform the situation (Salgado, 1971).

May 18, 1967, Atoyac, Guerrero

A protest rally took place to demand the destitution of the primary school director and the school committee. The rally was led by Lucio Cabañas. The police had warned Cabañas that they would not tolerate any demonstration, so they opened fire when Cabañas started to speak, killing five people, including a pregnant woman. Like Vazquez, Cabañas also fled to the Sierra and formed thePartido de los Pobres and its armed branch; the Brigada campesina de ajusticiamiento (Peasant execution brigade).

1960s  – 1970s, Guerrero, La guerra en el paraíso

In the Sierra, the rebels found the fertile ground for rebellion that was absent at the beginning of the twentieth century. The federal and state governments were carrying out two large-scale modernization projects in Guerrero, both taking place either in the Sierra or in localities close to it. Partly financed by the World Bank, the first project consisted of the construction of a series of dams and civil engineering enterprises through the Balsas River, mainly for energy production.

The goal of the second project was to develop the port of Acapulco and its surroundings as a mayor international tourist destination. This state-sponsored modernization was planned by a central bureaucracy interested in economic progress at the national level but caring little about concerns of the local population. Hence, it became a process of  authoritarian economic exploitation.

During the 1960’s and the 1970’s labour conflicts erupted in the Sierra; land was taken away from peasants and forests were cut down by foreign timber companies. Popular protest emerged with a broad set of demands ranging from land redistribution, an end to forest exploitation, attendance of educational, health and socioeconomic needs of the popular classes, rights to unionize, democratic transparency, and community decision making.

The wave of mobilization was severely repressed and guerrilla organizations nurtured the grievances. According to Trejo, repression in Guerrero in the 1960’s and 1970’s reached levels of the guerras sucias in Chile and Argentina. According to the special prosecutor’s office, the Fiscalía Especial para Movimientos Sociales y Políticos del Pasado (FEMOSPP), that was investigating the guerra sucia, at least 482 forced disappearances took place during that period.

May 30, 1974

PRI senator Ruben Figueroa Figueroa (Francisco’s nephew) was kidnapped by the PDLP. As asked by the rebels, the Mexican government announced the retrenchment of the army from Guerrero rural areas to the headquarters, but Guerrero’s countryside was heavily militarized in secret. Soldiers were looking for Figueroa and hunted down the PDLP. Cabañas died in combat, and Figueroa was rescued. In 1975 he became the governor of Guerrero.

The FEMOSPP, with more than 500 oral testimonies and documents from the Mexican national archive (Archivo General de la Nación), asserted that, once Figueroa became governor of Guerrero, he perpetrated hundreds of crimes. Figueroa then ordered arbitrary detentions. The state’s chief of security Mario Acosta Chaparro, together with Alfredo Mendiola, Alberto Aguirre and Humberto Rodríguez, was in charge of executing the victims and throwing their bodies from airplanes in the ocean.

Army and police forces managed to suppress the rebellion in the highlands by killing or imprisoning most of the rebels. By the 1980’s neither the ANCR, nor the PDLP, nor the other dozens of guerrilla organizations formed in the 1970’s, were a threat to the Mexican state.

Carrots and sticks

The ‘stick’ came together with some ‘carrots’. Two of those carrots were particularly important. After wars, reconstruction processes follow. Something similar happened after Guerrero’s guerra sucia. The first carrot meant significant state resources and a new program for land redistribution aimed at winning the ‘hearts and minds’ and avoiding a subsequent rebellion in rural areas. This process can be seen as the state’s “massive incursion” in Guerrero’s eastern highlands, ‘la Montaña’ region. The second carrot was a democratic opening in which former guerrilleros were exonerated and the Mexican Communist Party (PCM) legalized and allowed to compete in the elections.

Nevertheless, no one was held responsible for the crimes against humanity perpetrated during the guerra sucia. Furthermore, the forced disappearances of radical opposition leaders continued despite the process of democratization and government alternation at the federal and state levels. Impunity prevailed. The tension of this historic moment was captured in the closing lines of Carlos Montemayor’s novel Guerra en el paraíso. In the novel, when Lucio Cabañas is shot, a thought resonates while he is falling to the ground: “there is still a lot to be done, to be done, to be done…”

Francisco Alonso is a PhD researcher in Political and Social Sciences at the European University Institute in Florence.

 

http://roarmag.org/2014/12/iguala-ayotzinapa-guerrero-repression/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+roarmag+%28ROAR+Magazine%29

The 6-Step Process to Dispose of the Poor Half of America

America’s wealth-takers are all too ready to abandon people when they aren’t useful.

Photo Credit: Jeff Wasserman/Shutterstock.com

One of the themes of the superb writing of Henry Giroux is that more and more Americans are becoming “disposable,” recognized as either commodities or criminals by the more fortunate members of society. There seems to be a method to the madness of winner-take-all capitalism. The following steps, whether due to greed or indifference or disdain, are the means by which America’s wealth-takers dispose of the people they don’t need.

1. Deplete Their Wealth 

Recent analysis has determined that half of America is in or near poverty. This is confirmed by researchers Emmanuel Saez and Gabriel Zucman, who point out: “The bottom half of the distribution always owns close to zero wealth on net. Hence, the bottom 90% wealth share is the same as the share of wealth owned by top 50-90% families – what can be described as the middle class.”

The United States has one of the highest poverty rates in the developed world. It’s much worse since the recession, especially for blacks and Hispanics.

From 2008 to 2013 the stock market, which is largely owned by just 10% of Americans, gained 18% per year. Well-to-do stockholders get capital gains tax breaks, including a carried interest subsidy thatRobert Reich calls “a pure scam.”

The bottom half of America, relying on regular bank accounts, earn about one percent on their savings.

2. Strip Away Their Income 

Earnings due to workers for their years of productivity have been withheld by people in power. Based on inflation, the minimum wage should be nearly three times its current level. An investor report from J.P. Morgan noted a direct correlation between record profits and cutbacks in wages.

We hear occasional news about job growth, but low-wage jobs ($7.69 to $13.83 per hour), which made up just 1/5 of the jobs lost to the recession, accounted for nearly 3/5 of the jobs regained during the recovery. And it’s getting worse. Nine out of ten of the fastest-growing occupations are considered low-wage, generally not requiring a college degree, including food service, health care, housekeeping, and retail sales.

Among rich countries, according to OECD data, the U.S. is near the bottom in both union participationand employee protection laws.

3. Take Away Their Homes 

study by the National Low Income Housing Coalition concluded that an average American renter would need to earn $18.92 per hour — well over twice the minimum wage — to afford a two-bedroom apartment. “In no state,” their report says, “can a full-time minimum wage worker afford a one-bedroom or a two-bedroom rental unit at Fair Market Rent.” Over one-eighth of the nation’s supply of low income housing has been permanently lost since 2001.

Little wonder that so many people are homeless: over 600,000 on any January night in the U.S., tens of thousands of children, tens of thousands of veterans, and one of every five suffering from mental illness.

4. Hit Them with Fines, Fees, and Fleecings 

The poor half of America is victimized by the banking industry, which takes an average of $2,412 each year from underserved households for interest and fees on alternative financial services; byrental centers that charge effective annual interest rates over 100 percent; by payday lenders whocharge effective annual interest rates of over 1,000 percent; and by the burgeoning prison industry, which charges prisoners for food and health care and phone calls and probation monitoring and anything else they can think of.

On top of all this, bubbly TV personalities rave about all the lottery money just waiting to be taken home. Poor families account for most of the lottery sales.

5. Criminalize Them 

Matt Taibbi’s recently published book The Divide: American Injustice in the Age of the Wealth Gapcontrasts the targeting of the poor for trivial offenses with a tolerance for the architects of billion-dollar financial crimes.

The U.S. court system is flooded with cases for minor infractions, including loitering charges reminiscent of the infamous Black Codes of post-slavery years. The buildup of arrests has added one out of every three U.S. adults to the FBI’s criminal database.

The poor are criminalized for lying down or sleeping in public; for sharing food; for simply havingnowhere to go.

6. Most Insidious: Let Their Children Suffer 

The U.S. has one of the highest relative child poverty rates in the developed world. Almost half of black children under the age of six are living in poverty. Nearly half of all food stamp participants are children. The number of homeless children has risen by 50 percent in less than ten years.

Early education is certainly part of the solution, for numerous studies have shown that pre-school helps all children to achieve more and earn more through adulthood, with the most disadvantaged benefiting the most. But even though the U.S. ranks near the bottom of developed countries in the percentage of 4-year-olds in early childhood education, Head Start was recently hit with the worst cutbacks in its history.

Meanwhile, public schools in the inner-city are being closed to satisfy the profit urges of the privatizers, who view our children as commodities. Said community organizer Jitu Brown after 50 schools were shut down in Chicago: “It has ripped black communities apart.”

Americans seek reasons for all the violence in our city streets. With so many “disposable” citizens deprived of living-wage jobs and a meaningful education and equal treatment by our system of justice, rebellion in the form of violence is not hard to understand. The privileged members of society would lash out, too, if they were stripped of everything they own and tossed into the streets.

Paul Buchheit is a college teacher, a writer for progressive publications, and the founder and developer of social justice and educational websites (UsAgainstGreed.org, PayUpNow.org, RappingHistory.org)

 

http://www.alternet.org/economy/6-step-process-dispose-poor-half-america?akid=12576.265072.Hp1XRb&rd=1&src=newsletter1028681&t=10&paging=off&current_page=1#bookmark

 

UK faces a return to 1930s levels of poverty

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By Robert Stevens
15 December 2014

This month, the UK government’s autumn statement announced cuts that will slash public spending back to where it was in the 1930s, before the welfare state came into being.

The scale of the cuts required to reduce public spending to around 35 percent of GDP were described as “colossal” by the Institute for Fiscal Studies. The ruling elite in Britain intend to carry out an offensive against the working class equal to that in Greece, where the average family has seen their average earnings drop by almost 40 percent since the 2008 global financial crash.

Commenting on the plans of Conservative Chancellor George Osborne, an RBS bank economist said, “The previous spending projections looked daunting,” but the “revised figures give the impression of trying to scorch the scorched earth” (emphasis added).

Many reports have been produced documenting the impact of the savage reduction in living standards already visited on millions of workers, youth and pensioners over the last six years.

The latest, published Friday by the International Labour Organisation (ILO), found that British workers suffered the biggest drop in real wages of all major G20 countries in the three years to 2013. They have fallen more sharply than at any time since records began in 1964. Real wages of UK workers have fallen even faster than Portugal, Spain and Ireland—countries forced by the International Monetary Fund and European Union to impose vast austerity packages since 2008. Only the wages of Greek workers have plummeted faster than those in the UK.

Each year the Joseph Rowntree Foundation (JRF) produces an annual report “monitoring poverty and social exclusion” in the UK. The latest states that 13 million people are living in poverty, nearly a quarter of the population.

The JRF notes, “Average incomes fell by 9 percent between 2007/08 and 2012/13 on the after housing costs measure.”

Even more people are, in fact, in poverty, but this is covered over by the general fall in wages.

The JRF explains, “This fall has an effect on the analysis in this report. The measure of poverty we use, stemming from the definition of poverty as being a state where people are far below the norms of everyday life, is set relative to the average (median) income. As that average falls, so does the poverty threshold so that threshold is now 9 percent lower than it was in 2007/08. So while there are 13 million people in poverty in the UK, it would be 3 million higher if we used the poverty threshold from 2007/08” (emphasis added).

Millions of workers have faced a catastrophic wage fall and are now classed as being part of the growing “working poor”. This phenomenon is noted by the JRF, which records that half of all those in poverty live in a family with at least one wage earner.

Since 2008/09, the report states, “more than 45 percent of poverty has been in working families.”

One in five of the poverty-stricken are working age adults without children. The report found that 1.1 million working age adults in poverty are not themselves working, but live with a working partner. It notes, “Among children in poverty, most (2.2 million) are in a working family. Of these, 850,000 are in a fully working family; that is, one where all the adults are in paid work. A much higher number, 1.3 million, are in families where one adult is in work and the other is not. The remaining 1.4 million children in poverty live in a workless family.”

Since 2008 the number of people forced to eke out an existence in low-paid jobs has risen substantially, with last year’s JRF report finding that around 5 million people are paid below the living wage (set last year at £7.40 per hour). Many were on the minimum wage, which stood at £6.31 last year.

The JRF notes, “Among those currently in work who were unemployed a year ago, around three-fifths are paid less than the living wage, around three times the average for all those in work. What this suggests is that a large chunk of this year’s in-work poor were last year’s workless poor. Given that only one-fifth of low-paid employees have left low-paid work completely ten years later, they may be next year’s working poor too.”

Another report issued this year revealed that wages have fallen even further, with youth now paid the same in real terms as in 1988.

Given a jobs market based on rock bottom pay and the fact that many are working zero hours and on other insecure contracts, last year’s JRF report established that “movement in and out of work is substantial—4.8 million different people have claimed Job Seeker’s Allowance (JSA)—in the last two years.”

As a result of decades of growing social inequality, child poverty is now permanently entrenched. Based on figures collated for 2013, the JRF found that one of London’s boroughs, Tower Hamlets, with a population of more than 250,000, had 49 percent of children living in poverty.

The report adds that “the next highest areas were its neighbours, Newham and Hackney. The highest area outside London was Manchester, on 39 percent, with Birmingham, on 37 percent, not far behind.”

Every part of the UK was afflicted. According to the report: “Those local authorities where child poverty is above 30 percent include Liverpool, Glasgow, Hull, Cardiff, Derry and Newcastle: almost all the major cities in the UK, and a large number of London’s boroughs, have more than 30 percent of children in poverty.”

The decade up to 2013 saw the cost of living shoot up by 30 percent, based on the consumer prices index. Within that average, some basic requirements of life have risen astronomically, including electricity, gas and other fuels, which “have risen by more than 150 percent since 2003, and domestic water bills have risen by 70 percent. The cost of public transport has risen by 88 percent, and private transport by 63 percent.”

In the same period, food and drink prices overall, excluding alcohol, rose by 47 percent.

Millions of people are forced to rely on welfare payments, the real value of which is constantly dropping as they have not risen with inflation. The report found: “At the individual level, the value of means-tested benefits has not been rising in the last five years.”

Real terms pensioner benefits “are back where they were ten years ago,” while benefits for children are “the lowest they have been since 2007.” Means-tested benefits, adjusted for inflation, “for a working-age couple have not been as low since 1979.”

Those whose jobs and livelihoods have been destroyed have faced the most cruel and sadistic punishment of having even their pittance Job Seeker’s Allowance payments “sanctioned” and suspended, leaving them with no income, under legislation introduced in 2012. According to the Citizens Advice Bureau, the average duration of a sanction was eight weeks, but they can last up to three years.

The JRF notes, “In 2013/14, the number of people whose JSA was suspended for not complying with the terms of their ‘claimant commitment’—commonly referred to as a sanction—rose to 800,000, the highest level ever. The year before, the figure was 740,000, itself a record.”

 

http://www.wsws.org/en/articles/2014/12/15/ukpo-d15.html

US budget resolution funds war and repression

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By Patrick Martin
13 December 2014

The omnibus spending resolution adopted by the US House of Representatives just before midnight Thursday, and which is now before the Senate, is a detailed public statement of the priorities of the American ruling elite. The bulk of the more than $1.1 trillion in funding goes to the military and other repressive functions of the federal government, such as spying, prisons and the police.

President Obama hailed the measure as a “bipartisan effort to include full-year appropriations legislation for most government functions that allows for planning and provides certainty, while making progress toward appropriately investing in economic growth and opportunity, and adequately funding national security requirements.” In other words, the bill makes it possible for the administration to continue waging war around the world and building up the apparatus for a police state at home.

Attached to the funding bill are hundreds of policy measures, many of them added at the last minute with no public discussion and, in many cases, without most congressmen or senators even being aware of what was being proposed before they rubber-stamped the bill. These include, most notoriously, the repeal of a major section of the Dodd-Frank legislation that sought to place some restrictions on the speculative activities of the banks following the 2008 financial crash.

The language in this section, permitting banks to use federally insured deposits to gamble in the swaps and derivative markets, was literally drafted by the banks. According to an analysis by the New York Times, 70 of the 85 lines in that section of the bill come directly from Citibank, which spearheaded the lobbying by Wall Street on this issue.

The four largest Wall Street banks conduct 93 percent of all US derivatives trading, so the measure is a brazen demonstration of the subservience of Congress to the big banks. According to the Washington Post, Jamie Dimon, CEO of JP Morgan Chase, another of the big four banks, personally telephoned individual congressmen to urge them to vote for the amendment to Dodd-Frank.

The House of Representatives passed the funding bill late Thursday by a vote of 219 to 206 after a delay of seven hours. The delay was to allow the Obama administration to pressure a sufficient number of Democratic congressmen to support the Republican-drafted bill and offset defections among ultra-right Republicans who wanted the legislation to block Obama’s executive order on immigration.

The final vote saw 162 Republicans and 57 Democrats supporting the bill, while 136 Democrats and 70 Republicans opposed it. As always, just enough Democratic votes were found to assure that the reactionary measure passed, the government agencies were funded, and the financial markets were reassured.

Some liberal Democrats, most notably the minority leader, Nancy Pelosi, made speeches posturing as opponents of the legislation. Pelosi even declared, in a comment that was widely publicized, that she was “enormously disappointed that the White House feels that the only way they can get a bill is to go along with this.”

But in remarks to a meeting of the Democratic caucus, Pelosi gave the game away, refusing to seek a party-line vote and instead telling members, “I’m giving you the leverage to do whatever you have to do.” The second-ranking and third-ranking Democratic leaders, Minority Whip Steny Hoyer and Deputy Whip James Clyburn, broke with Pelosi and sided with the White House on the bill, openly recruiting the votes required for passage.

Along with the $1.1 trillion bill that will fund most federal agencies through September 30, the House passed by voice vote a resolution funding the whole government through Saturday midnight, to give the Senate time to act on the main measure. The Senate approved this stopgap as well, and Obama signed it at the White House on Friday morning.

The House met again Friday afternoon and passed another extension, this time for five days, giving the Senate until midnight Wednesday to complete action on the funding legislation. Ultimate Senate passage is not in doubt. Outgoing Majority Leader Harry Reid has given his public backing, saying Thursday, “I’m upset with certain things in the bill. It’s not perfect. But a longer-term funding is much better for our economy than a short-term one.”

Most press coverage of the funding bill gives the following breakdown of the spending: $521 billion for the military, $492 billion for nonmilitary items, and $73 billion in emergency spending, most of it military-related. This is highly misleading, since much of the “nonmilitary” spending is demonstrably in support of US military operations or domestic police and security operations directed against the American population.

The $492 billion of “nonmilitary” spending includes the following, according to the official summary posted on the web site of Congress. (Click here and then page down to the section titled “Omnibus summaries,” which contains live links to department-by-department spending).

· $11.4 billion for the National Nuclear Security Administration, the unit of the Department of Energy that assembles US nuclear weapons.

· $40.6 billion for Department of Energy, NASA, NSF and other scientific research, much of it related to nuclear energy, cybersecurity and missile technology.

· $65 billion for the Veterans Administration, which provides medical care and other services for those shattered in body and mind by their service as cannon fodder in American wars.

· $26.7 billion for the Department of Justice, which includes the FBI, DEA and BATF ($10.7 billion), federal prisons ($6.9 billion), and aid to local police ($2.3 billion).

· $25 billion for the Department of Homeland Security, which is funded only through February 27, 2015 because of its role in enforcing immigration policy (the full-year amount would be more than $60 billion).

· $7 billion from the health budget for biodefense and bioterrorism research.

· An undisclosed figure, believed to be in the range of $60 billion, for intelligence operations, including the CIA and 17 other federal agencies.

At a minimum, these figures suggest that $236 billion, or nearly half, of the supposedly “nonmilitary” spending is actually directed to sustaining the military-intelligence capabilities of American imperialism.

Adding that to the explicitly military and overseas contingency funding, the real dimensions of the US military-intelligence-police-prison complex begin to come into view: a staggering $830 billion, more than 80 cents out of every dollar in the funding bill, is devoted to killing, spying on, imprisoning or otherwise oppressing the people of the world, including the American people.

Further details of the massive legislation, weighing in at more than 1,600 pages, will undoubtedly emerge over the coming days. Among the provisions worth taking note of:

· The bill provides $3.1 billion in aid to Israel, mostly financial subsidies, and $1.45 billion in aid to Egypt, most of it military, as well as $1 billion in aid to Jordan, another US client state in the region.

· The bill eliminates the Obama administration’s Race to the Top program, used for six years to promote private charter schools and attacks on teachers in public schools. Republicans attacked the program as an effort to impose federal standards in education.

· The bill bans enforcement of a series of environmental and labor regulations, ensuring that air and water will be more polluted and workers will be more brutally exploited.

 

http://www.wsws.org/en/articles/2014/12/13/budg-d13.html

Tides of relief: Nikos Romanos wins victory in hunger strike

By ROAR Collective On December 11, 2014

Post image for Tides of relief: Nikos Romanos wins victory in hunger strikeAfter a month on hunger strike and weeks of solidarity protests, the anarchist prisoner Nikos Romanos is finally granted his demands by the government.

By Foula Farmakidis, Spyros Marchetos and Christina Laskaridis

Tides of relief emanated from Greece on Wednesday, when the anarchist prisoner Nikos Romanos ended his month-long hunger strike that sparked solidarity actions across the globe. His demands were essentially met, with the parliament decreeing that student prisoners will be allowed educational leave on certain conditions, including electronic security tagging.

Romanos’ desperate struggle against an intransigent government brought up international memories of Bobby Sands and the other Irish republican prisoners who died in 1981. Now his victory, suggesting that the extreme right-wing Samaras government may be on its last throes, shows what a huge influence a person can have when they are unafraid to risk their own life and when they are backed by a resourceful solidarity movement.

Video report by Ross Domoney:

Romanos, 21, carries a tragic past. In December 2008, his childhood friend Alexis Grigoropoulos died by his side after having been shot, in cold blood, by a policeman. This 15-year-old became the symbol of an entire generation which, with alarming premonition, foresaw the social catastrophe that was soon to be unleashed on Greece. Alexis’ death galvanized and radicalized the youth. No surprise that Romanos, who at 15 years of age carried his friend’s coffin on his shoulder, decided to battle against the state.

In February 2013, Romanos was arrested along three other youths for attempted bank robbery. Witnesses and the public prosecutor agreed that the arrestees did not use their weapons out of concern for the hostages’ safety. After their capture they were all tortured so brutally, that the police digitally edited the photos given to the press so as to mask their injuries.

While serving his sentence, Romanos studied for the national university entrance exams, and thus secured a place at a university. The Minister of Justice visited his prison in September to grant, on behalf of the Greek state, an educational achievement award to him and other inmates. Romanos at the time was protesting against the appalling conditions within the prison, never received the award, and explicitly refused any favors from the state.

Despite awarding Romanos for his efforts in entering university, the state forbade him to actually attend it. Protesting for the law granting inmates educational leave to be enforced, Romanos started a hunger strike on November 10. The legal grounds for withholding his leave are convoluted. The Greek penal system includes educational leave in the framework of the rehabilitation of prisoners, but the Justice Ministry argues that a terrorism suspect cannot be safely let out of prison, even if Romanos has already been acquitted once for the terrorist charges against him.

Few doubt that the young anarchist was refused educational leave as a punishment for his ideas, by a government eager to show that it will not tolerate radical dissent. Romanos demanded from the state, which he intensely abhors, that it recognize his legal rights, which the state is supposed to guarantee for all. He never stole from the public purse nor from citizens; rather he attempted to rob one of the banks which was never brought to account for its part in the economic debacle of the country. No one failed to notice the irony of young anarchists being brutally persecuted for an unsuccessful and bloodless bank robbery by the very same people who treat those convicted of large-scale theft of public money and violent crimes with utmost lenience.

Examples abound. A corporate media and business tycoon who embezzled 235 million euros from the ex-state owned Postal Bank was released on bail, and even visited the US, Paris and the Maldives while his bail terms forbade him from exiting the county. A banker convicted of embezzling 700 million euros from the now defunct Proton Bank, and also facing trial for homicide, was left free to roam by the very same prosecutor who denied Romanos educational leave.

Two electricity company owners facing trial on embezzling 270 million euros from the state were also released on bail, thanks to the legal acumen of their defense attorneys, who just happened to be the Government Speaker at that time, Makis Voridis, and the then Secretary General of the Government, Takis Baltakos. A shipping magnate and oil tycoon sentenced to five years in prison for tax evasion and various other unlawful activities was immediately rewarded with the ownership of the most profitable public company in Greece, privatized at a fire-sale price. Finally, one of the accomplices of Grigoropoulos’ murder was released on bail after just one year in jail, on “humanitarian grounds,” to deal with family difficulties.

The Minister of Justice himself, Charalambos Athanasiou, has often made moves characterized as extreme-right, bigoted, and even venal. He never managed to explain the considerable property he amassed while holding public positions, property he even failed to declare, thus breaking the law — but this was no problem, as he soon changed the law and made it legal. He consistently hindered controls on other high earners with unexplained incomes; he legislated in favor of embezzlers of public money; and he even tried to get most of the convicted drug wholesalers out of prison with a law catering especially for them.

Athanasiou furthermore provoked an international outcry when he snubbed the European Court of Human Rights that had condemned Greece for refusing elementary rights to same sex partners. A further irony, that does not escape the polarized and intensely politicized Greek society, is that he maintained his inhuman stance towards Romanos while his own father — a collaborator of the Nazi occupiers during the Second World War — owed his life to the leniency showed to him by communist partisans.

The Minister of Justice greatly contributed to the heightening of tensions during the past few days. He stoked fears that Romanos might escape, while Romanos had agreed to be tagged during his leave. Romanos’ teacher in prison, actually the head of the prison education service, even proposed to escort the young convict to classes himself, and guaranteed his prompt return to the jailhouse, to no avail. Romanos refused to follow distance courses from within the prison walls, an idea beyond the logistical capabilities of the Greek system, denouncing it as an attempt to chip away at the right of prisoners for leave permits. But during the last month the government clearly cared more about publicly humiliating Romanos than about keeping him alive.

On Monday, December 8, Romanos’ father met with Prime Minister Samaras, who rebuked his pleas on the grounds that a Prime Minister cannot obstruct the course of justice. Actually Samaras has governed the country by bulldozing through austerity and repressive measures, using decrees with no concern whatsoever for the constitution or any other legal obstacles. How else could the state, for example, refuse to implement the court ruling that the cleaners of the Ministry of Finance building be re-hired, following their unlawful redundancy?

On Tuesday, December 9, the Supreme Court refused to overturn the lower court’s decision that refused educational leave to Romanos. With the government rebuking any alternative to distance learning from within prison walls, the parliamentary discussion on Tuesday descended into mayhem. On Wednesday, the 31st day of his hunger strike and with his demands still unmet, Romanos escalated his fight by starting a thirst strike, as an act of refusal to further dilute prisoners’ rights. The danger for his life was now imminent.

Minister Athanasiou had stated: “Even if God Himself were to descend to earth, He couldn’t change this decision.” We do not know who proved more mighty than God Himself, but the fact is that the Greek government — hell-bent on humiliating and thwarting all dissidents, as well as outright beating them — was obliged to make a costly and humiliating U-turn.

A day earlier, it had announced a change of plans for the forthcoming election of the President of the Republic, that may soon lead to a SYRIZA government. Political games played on the back of Romanos might have something to do with this. Seeking alliance with the neo-Nazis of Golden Dawn to scrape together the necessary votes for electing the President, the government had its tactics exposed in Parliament and rejected by Golden Dawn. Its plans to score political points by claiming that the hated Memorandum days are over were further foiled on Monday, when the extension of the international bailout was agreed by European Finance Ministers.

On the back of a mounting public outcry, with masses of people gathering in solidarity outside Romanos’ hospital, tensions rising, and time running out, Athanasiou brought the amendment to Parliament on Wednesday, and Romanos stopped his hunger strike. On the other hand, the government still ignores the300 Syrian refugees who are also on hunger strike on the Parliament’s doorstep; it is still introducing high security prisons fit for an era of austerity and repression; and it still finalized the purchase of Israeli drones for border and protest control. But these may be the government’s last days, while Romanos’ brave and principled stance in prison brought results beyond his wildest dreams. All in all: a big victory for Romanos’ and his comrades’ struggle.

By Foula Farmakidis, Spyros Marchetos and Christina Laskaridis.