Friday, January 14, 2022

CORPORATE COURT FUCKS OVER WORKERS
US Supreme Court Blocks OSHA Vaccine Mandate


By Elizabeth Redden
January 14, 2022

The Supreme Court on Thursday blocked an Occupational Safety and Health Administration rule mandating that large employers require employees get vaccinated against COVID-19 or undergo weekly testing.

The court allowed a separate rule mandating vaccination for employees of health-care facilities receiving Medicare and Medicaid funding to go into effect.

In blocking the OSHA rule, which would have applied to colleges and other workplaces with 100 or more employees, and which would have affected an estimated 84 million workers, a six-member majority of the court found that the states, businesses and nonprofit groups that sued were likely to prevail in their arguments that OSHA exceeded its authority as set out in the Occupational Safety and Health Act of 1970.

The majority said in an unsigned opinion that the act empowers the secretary of labor “to set workplace safety standards, not broad public health measures.”

“Although COVID-19 is a risk that occurs in many workplaces, it is not an occupational hazard in most,” the court’s opinion states. “COVID-19 can and does spread at home, in schools, during sporting events, and everywhere else that people gather. That kind of universal risk is no different from the day-to-day dangers that all face from crime, air pollution, or any number of communicable diseases. Permitting OSHA to regulate the hazards of daily life—simply because most Americans have jobs and face those same risks while on the clock—would significantly expand OSHA’s regulatory authority without clear congressional authorization.”

The three liberal justices on the court dissented, arguing the court acted “outside of its competence and without legal basis” in displacing the judgments of OSHA officials.

“In the face of a still-raging pandemic, this Court tells the agency charged with protecting worker safety that it may not do so in all the workplaces needed,” Justices Stephen G. Breyer, Elena Kagan and Sonia Sotomayor wrote in a dissenting opinion. “As disease and death continue to mount, this Court tells the agency that it cannot respond in the most effective way possible. Without legal basis, the Court usurps a decision that rightfully belongs to others. It undercuts the capacity of the responsible federal officials, acting well within the scope of their authority, to protect American workers from grave danger.”

 Businesses are whipsawed again as the Supreme Court blocks OSHA’s vaccine mandate.

Image
Walmart has yet to issue broad requirements for its staff.
Credit...Eduardo Munoz/Reuters

A requirement that large companies mandate vaccines or weekly testing for workers was blocked by the Supreme Court on Thursday, leaving the often fraught choice up to employers.

Parts of the rule, which the Occupational Safety and Health Administration issued in November, had been scheduled to take effect on Monday.

Vaccine mandates have been a controversial approach to battling the pandemic. United Airlines and Tyson Foods are among the major companies that already have such requirements, but many others are waiting for legal battles to be resolved.

Walmart, Amazon and JPMorgan Chase, three of the largest private employers in the United States, have yet to issue broad requirements for their staff. A spokesman for Macy’s, which began to request the vaccination status of its employees this month, said the retailer was “evaluating this late breaking development.”

Some companies with vaccine mandates said keeping those policies might become more difficult in light of the Supreme Court’s ruling.

Franz Spielvogel, who owns Laughing Planet, a chain of fast casual restaurants with more than 200 employees, required his employees to be fully vaccinated or submit to weekly testing by mid-January and does not plan to change that rule. But the Supreme Court’s decision frustrated him, he said, because he no longer has federal cover to justify his policy.

“It turns into a bit of a head scratcher for us,” Mr. Spielvogel said, though the recent surge of Covid-19 cases has made him feel more strongly about the need for a mandate. “As a business owner and as an employer and as someone dealing with the public, I want my customers to know they’re walking into a safe place.”

In a November poll of 543 companies by the consulting firm Willis Towers Watson, 57 percent said they either required or planned to require Covid-19 vaccinations. That included 32 percent that planned to mandate vaccines only if the OSHA rule takes effect. Seven percent said they planned to carry it out regardless of the outcome. A little more than 70 percent of the adult U.S. population is fully vaccinated.

“Our recent survey suggests that many more employers would have pursued vaccine mandates if the rule was left in place,” Dr. Jeffrey Levin-Scherz, who leads the consulting firm’s clinical response to the coronavirus, said in a statement.

Some companies have been concerned about losing employees when workers are already scarce, and although firms with mandates have said those concerns have largely not come to fruition, a national requirement could have further eased those concerns.

The National Retail Federation, which was one of several trade groups to sue the administration over the mandate, called the Supreme Court’s action a “significant victory for employers.” The organization said it “urges the Biden administration to discard this unlawful mandate and instead work with employers, employees and public health experts on practical ways to increase vaccination rates and mitigate the spread of the virus in 2022.”

Companies have been preparing for months for the mandate, and many may still go forward with their policies, said Douglas Brayley, an employment lawyer at Ropes & Gray. He noted that the Supreme Court did not say anything against employer vaccination mandates.

Some local and state laws still require employers to mandate vaccines or weekly testing. New York City, for example, has a more stringent rule than the federal government’s, requiring all on-site workers to be vaccinated. The Supreme Court has repeatedly upheld state vaccine mandates, and it did not limit the ability of employers to create their own requirements.

But other states have laws blocking mask and vaccine mandates, which the federal rule would have pre-empted. With the Biden administration’s rule blocked, many employers in those states will be unable to require vaccines, said David Michaels, an epidemiologist and a professor at George Washington University and a former OSHA administrator.

“This decision will be an excuse for those employers who care less about their employees to return to business as usual,” Dr. Michaels said. He added that the decision could exacerbate the divide between white-collar workers who can remain at home and workers who have to conduct business in person as Covid cases surge.

The Supreme Court’s decision, which described OSHA’s rule as “a blunt instrument,” left open the possibility that the agency could issue a revised rule that is targeted at certain types of workplaces or is more clearly within its purview, such as requiring improved ventilation and personal protective equipment, Dr. Michaels said. It could also follow a more traditional rule-making process rather than the emergency one it used, though that could take years.

In the meantime, the court’s ruling could encourage states and local governments to go forward with their own requirements. That could create further complications for national employers.

“Local jurisdictions are going to look more carefully at the OSHA mandate and determine whether to adopt something similar,” said Domenique Camacho Moran, a partner in the labor and employment practice at the law firm Farrell Fritz.

United Airlines said this week that while 3,000 of its employees had Covid-19, none of its vaccinated employees were currently hospitalized. Since its vaccine policy went into effect, the airline said, its employee hospitalization rate had dropped significantly below the rate for the U.S. population.

Dr. Megan Ranney, an emergency physician and the associate dean at Brown University’s School of Public Health, called the ruling a “tremendous blow” to national efforts to battle the pandemic.

“There is 30 percent of the movable adult population” that isn’t vaccinated for which a mandate may have made a difference, she said. “Now, the mandates are not going to be in place, and so I worry that those folks are going to continue to not get vaccinated — unless an awful lot of employers decide that this is in their best interest to put in place.”

Sapna Maheshwari contributed reporting.


Businesses react to ruling against Biden vaccine mandate
By DAVID KOENIG

President Joe Biden speaks about the government's COVID-19 response, in the South Court Auditorium in the Eisenhower Executive Office Building on the White House Campus in Washington, Thursday, Jan. 13, 2022. (AP Photo/Andrew Harnik)

For companies that were waiting to hear from the U.S. Supreme Court before deciding whether to require vaccinations or regular coronavirus testing for workers, the next move is up to them.

Many large corporations were silent on Thursday’s ruling by the high court to block a requirement that workers at businesses with at least 100 employees be fully vaccinated or else test regularly for COVID-19 and wear a mask on the job.

Target’s response was typical: The big retailer said it wanted to review the decision and “how it will impact our team and business.”

The Biden administration argues that nothing in federal law prevents private businesses from imposing their own vaccine requirements. However, companies could run into state bans on vaccine mandates in Republican-controlled states. And relatively few businesses enacted their own rules ahead of the Occupational Safety and Health Administration requirement, raising doubt that there will be rush for them now.

In legal terms, the Supreme Court’s conservative majority said the OSHA lacked authority to impose such a mandate on big companies. The court, however, let stand a vaccination requirement for most health care workers.

The National Retail Federation, the nation’s largest retail trade organization and one of the groups that challenged the OSHA action, called the court’s decision “a significant victory for employers.” It complained that OSHA acted without first allowing public comments, although administration officials met with many business and labor groups before issuing the rule.

Chris Spear, the president of the American Trucking Associations, another of the groups that fought the OSHA rule, said it “would interfere with individuals’ private health care decisions.”

Karen Harned, an official with the National Federation of Independent Business, said that as small businesses try to recover from nearly two years of pandemic, “the last thing they need is a mandate that would cause more business challenges.”

But mandate supporters called it a matter of safety for employees and customers.

Dan Simons, co-owner of the Founding Farmers chain of restaurants in the Washington area, said vaccine mandates are “common sense.” He requires his 1,000 employees to be fully vaccinated; those who request an exemption must wear a mask and submit weekly COVID test results.


“If your priority is the economy, or your own health, or the health of others, you would agree with my approach,” Simons said.

Administration officials believe that even though the OSHA rule has been blocked, it drove millions of people to get vaccinated. But companies that used mandates to achieve relatively high vaccination rates may decide that they have accomplished enough.

Ford Motor Co. said it was “encouraged by the 88% of U.S. salaried employees who are already vaccinated.” The car maker said it would review the court decision to see if it needs to change a requirement that most U.S. salaried workers get the shots.

Labor advocates were dismayed by the ruling.


“This decision will have no impact on most professional and white collar workers, but it will endanger millions of frontline workers who risk their lives daily and who are least able to protect themselves,” said David Michaels, who led OSHA during the Obama administration and now teaches at the George Washington University’s School of Public Health.

For their part, labor unions had been divided all along about Biden’s attempt to create a vaccine mandate, with many nurses and teachers groups in favor, but many police and fire unions opposed. Some unions wanted the right to bargain over the issue with companies.

The United Auto Workers, which encourages workers to get vaccinated, said the decision won’t change safety protocols such as face masks, temperature checks and distancing when possible for more than 150,000 union members at General Motors, Ford and Stellantis factories.

The Service Employees International Union, which represents more than 2 million service industry workers, said the Supreme Court’s decision is a relief for health care workers but leaves others without critical protections.

“In blocking the vaccine-or-test rule for large employers, the court has placed millions of other essential workers further at risk, caving to corporations that are trying to rig the rules against workers permanently,” the union said.

The union called on Congress and states to pass laws requiring vaccinations, masks and paid sick leave. Workers also need better access to testing and protective equipment, the union said.

The United Food and Commercial Workers International Union, the largest union for grocery workers and meatpacking plants, said that the Supreme Court decision fails to recognize the “extreme health risks” America’s front-line food and retail workers face on the job.

“Frontline workers need to be protected and this decision needlessly ignores that there was a better way to address this issue without negating this mandate,” said Marc Perrone, president of the UFCW International in a statement.

Meanwhile, employers have been split on what to do with their unvaccinated workers. Among 543 U.S. companies surveyed in November by insurance broker and consulting firm Willis Towers Watson, fewer than one in five required vaccination. Two-thirds had no plans to require the shots unless the courts upheld the OSHA requirement.

Jeff Levin-Scherz, an executive in the firm’s health practice, said most companies with mandates will keep them because they are working. He said nothing short of a mandate can get vaccination rates to 90%, and “you really need a very high level of vaccination to prevent community outbreaks.”

United Airlines was one of the first major employers to announce a mandate, back in August. CEO Scott Kirby has said that 99% of United employees either got vaccinated or submitted a request for exemption on medical or religious grounds.

United declined to comment Thursday, but in earlier comments Kirby has sounded committed to the mandate for his employees because “it was the right thing to do for safety.”

Airlines fall under a separate Biden order that required federal contractors to get their workers vaccinated. That requirement was not part of Thursday’s Supreme Court ruling, but it has been tied up separately since early December, when a federal district judge in Georgia issued a preliminary injunction barring enforcement of the mandate.

___

AP Staff Writers Anne D’Innocenzio in New York, Paul Wiseman in Washington and Dee-Ann Durbin and Tom Krisher in Detroit contributed to this report.

___

US Supreme Court strikes down Biden large employer vaccine mandate

Kevin Reed
WSWS.ORG

On Thursday afternoon, the Supreme Court of the United States struck down the Biden administration’s policy requiring large employers to make COVID-19 vaccines mandatory among workers. While every region of the country is facing an unprecedented surge of the Omicron variant, the decision impacts approximately 84 million workers, more than 20 million of whom are unvaccinated.

In a 6-3 vote, the high court overturned the decision of a three-judge panel of the Sixth Circuit Court of Appeals in Cincinnati that ruled in December that the Biden administration’s large employer vaccine mandate was lawful. The original lawsuit was filed by the National Federation of Independent Businesses, an organization that claimed the vaccine mandate “restricts the freedom small business owners depend on to run their businesses and is a clear example of administrative overreach.”

The judges in the majority were Chief Justice John G. Roberts Jr. and Justices Brett M. Kavanaugh, Clarence Thomas, Samuel A. Alito Jr., Neil M. Gorsuch and Amy Coney Barrett. Those in opposition to the ruling were Justices Stephen G. Breyer, Sonia Sotomayor and Elena Kagan.

United States Supreme Court Building at Dusk
 (Credit: Wikimedia Commons/Joe Ravi)

In its nine-page decision, the right-wing majority ruled that the Occupational Health and Safety Administration (OSHA)—the federal agency that published the new rules for large businesses in November and is responsible for enforcing the policy—does not have authorization from Congress to impose the mandate.

The specifics of the Biden proposal entitled “COVID–19 Vaccination and Testing; Emergency Temporary Standard” would have mandated employers to require employees to get vaccinated or wear masks each day and get tested for COVID-19 weekly at their own expense. The rules had provisions for exceptions based on employee religious objections and for workers who do not have indoor close contact with other employees.

The six justices stated that the OSHA rules are not “everyday exercise of federal power” but instead are “a significant encroachment into the lives—and health—of a vast number of employees.” In siding with business owners and against the public health interest, the court argued that COVID-19 does not qualify as an occupational hazard and therefore falls outside the responsibility of OSHA to regulate “work-related dangers.”

Significantly, the court majority brief states, “COVID-19 can and does spread at home, in schools, during sporting events, and everywhere else that people gather. That kind of universal risk is no different from the day-to-day dangers that all face from crime, air pollution, or any number of communicable dis­eases. Permitting OSHA to regulate the hazards of daily life—simply because most Americans have jobs and face those same risks while on the clock—would significantly expand OSHA’s regulatory authority without clear congressional authorization.”

By blocking the Biden administration’s vaccine policy—even after 63 million Americans have contracted COVID-19 and more than 843,000 have died from the virus—the Supreme Court has endorsed in legal terms the standpoint of the corporations and Wall Street that the pandemic must be allowed to spread among the working population without restrictions and that the public must “learn to live” with the pandemic.

As a matter of fact, the Supreme Court decision barely even refers to the devastating impact of the pandemic on society as a whole. With its narrow focus on Congressional authorization and jurisdiction, the court expresses indifference to the OSHA projection that the mandate “will save over 6,500 lives and prevent hundreds of thousands of hospitaliza­tions.” The court majority responded to these life-and-death matters with, “It is not our role to weigh such tradeoffs.”

The court also justified its decision by arguing that OSHA lacked a historical precedent for “a broad public health regulation of this kind—addressing a threat that is untethered, in any causal sense, from the workplace.” For the Supreme Court majority, it matters little that OSHA was established by Congress in 1971 and that the COVID-19 virus represents an unprecedented global public health crisis with no historical parallel, with the possible exception of the Great Influenza epidemic of 1918-20 that killed an estimated 20-50 million people worldwide.

In contrast to the reactionary Supreme Court ruling, the Sixth Circuit Court of Appeals decision of December 17 upholding Biden’s OSHA rules begins with the following, “The COVID-19 pandemic has wreaked havoc across America, leading to the loss of over 800,000 lives, shutting down workplaces and jobs across the country, and threatening our economy.”

The claim by the Supreme Court majority that the coronavirus is not an occupational hazard is blatantly false. Transmission of COVID-19 in the workplace is a primary cause of the spread of the virus and has been the subject of significant studies and research. For example, a study conducted in May 2020 by Harvard T.H. Chan School of Public Health showed that workplace transmission played a substantial role in the spread of the disease during the early stages of outbreaks in six Asian countries. Meanwhile, it showed that the majority of work-related cases occurred in occupations other than health care.

In October 2020, a report by the Century Foundation entitled “Halting Workplace COVID-19 Transmission: An Urgent Proposal to Protect American Workers” said that, while the initial wave of the pandemic hit health care and nursing home staff, “tens of thousands of other workers—emergency responders, corrections officers, transit workers, meat and poultry processing workers, farm workers, grocery store and warehouse workers, and many others—have been sickened and hundreds more of them have died.”

In addition to its decision on the large business vaccine mandate, the Supreme Court upheld the OSHA rules requiring health care workers at medical facilities that participate in the federally funded Medicare and Medicaid programs to be vaccinated. The implementation of this aspect of Biden’s policy will affect more than 17 million health care workers and would “save hundreds or even thousands of lives each month.”

In responding to the legal defeat, Biden appealed to the very same businesses which were behind the campaign to block the vaccine mandate. “The Court has ruled that my administration cannot use the authority granted to it by Congress to require this measure. … I call on business leaders to immediately join those who have already stepped up—including one-third of Fortune 100 companies—and institute vaccination requirements to protect their workers, customers, and communities.”
Microsoft opens a review of its sexual harassment policies
Bill Gates, one of Microsoft’s founders, solicited at least two employees while he was running Microsoft, according to reports in The New York Times and The Wall Street Journal.
Credit...Ruth Fremson/The New York Times

By Emily Flitter

Microsoft has selected a law firm to review its sexual harassment and gender discrimination policies, the company’s board announced on Thursday, after shareholders raised alarms about how Microsoft and Bill Gates, one of its founders, had treated employees, especially women.

The board said it had chosen Arent Fox, based in Washington, D.C. Microsoft said the firm had never done employment-related work for it in the past.

Shareholders passed a resolution during the company’s 2021 annual meeting to review the policies Microsoft has in place for its employees to protect them against abuse and unwanted sexual advances.

The resolution passed with support from almost 78 percent of Microsoft’s shareholders. It was the only of five proposals on ethical issues put forth by shareholders to succeed. Others, like a call for a report on race- and gender-based pay gaps at the company and a pledge to prohibit sales of facial recognition to government entities, failed.

“Microsoft is under intense public scrutiny due to numerous claims of sexual harassment and an alleged failure to address them adequately and transparently,” the text of the resolution said. “Reports of Bill Gates’s inappropriate relationships and sexual advances toward Microsoft employees have only exacerbated concerns, putting in question the culture set by top leadership and the board’s role holding those culpable accountable.”

Mr. Gates solicited at least two employees while he was running Microsoft, according to reports in The New York Times and The Wall Street Journal. In one incident, in 2007, Mr. Gates sat through a presentation by a Microsoft employee, then immediately emailed her to ask for a date. Microsoft leaders later warned Mr. Gates not to do things like that. In 2019, Microsoft’s board received a letter from an engineer claiming to have had a sexual relationship with Mr. Gates in 2000. A spokeswoman for Mr. Gates confirmed that the two had had an affair that “ended amicably.”

Satya Nadella, Microsoft’s chief executive, said in a statement on Thursday that workplace culture was Microsoft’s “No. 1 priority.”

“We’re committed not just to reviewing the report but learning from the assessment so we can continue to improve the experiences of our employees,” he said.

Karen Weise contributed reporting.

 Otto Rühle 1925

The Psyche of the Proletarian Child


First published: as Die Seele des proletarischen Kindes (Dresden: Verlag am anderen Ufer, 1925), 203-205. Published in The Weimar Republic Sourcebook, Kaes et al.


Proletarian youth challenged the principle of authority for the first time in June 1919 when a number of young workers abandoned Free Socialist Youth in order not to oppose from within an authoritarian organization (which was an appendage of the parties) but to adopt a new position of their own. “Where are the leaders of the young,” ran a manifesto of these young people on this occasion, “who have not run their heads up against ‘fatherly benevolence’ and the ‘well-intentioned advice’ of older men? It is high time that an end be put to the fairy tale of disinterested and selfless friendship of age to youth.”

This youth – anarchistic youth, as they called themselves – refused utterly, decisively, and consistently all membership in any sort of party or union and all tutelage of whatever form by any organization of adults. Indeed when the syndicalists – an organization with a federal basis – mistakenly passed a resolution that obligated “all organizations and executive committees to initiate syndicalist youth groups everywhere,” the young proletarian anarchists made a great commotion rebelling against it. “Just as you struggle against the thought that socialism can be initiated centrally from the top down by decree,” they called out to the syndicalists in their publication, “we reject the idea that a youth movement be initiated by a congress resolution and by older people.” This led to conflicts in which the old struggle between fathers and sons was identically repeated – conflicts in which the profound leaning toward a mentality anchored in authoritarianism of even the best a d purest among the syndicalist champions was betrayed. Their threat that the rebellion of the young would force them to apply “the whole of their authority as fathers” was the most embarrassing unmasking, for behind the masks of the nicest socialist language there peered out for an instant the face of an extreme bourgeois despotism. The syndicalists still enjoyed the success of having an anarcho-syndicalist youth organization come into being, a fatal success for this appendage of the syndicalist union is the weakest, most powerless, final offshoot of the authoritarian youth movement born of the instinct for power and the drive for domination, which, in its deepest foundations, has nothing to do with socialism.

Socialism is precisely community, and community is the antipode to domination, authority, and violence. To hold authority as distant as possible means to be closest to socialism. That is why the anarchist youth groups – isolated, not very strong, but unshakable in their fundamentally nonauthoritarian attitude – which have joined together in a revolutionary community as “free youth,” as well as the youth groups of the General Workers’ Union, are today the vanguard and apex of the proletarian march toward the socialist goal. By virtue of their mental disposition, it is they who are most clearly called to the new work, they who are the chosen ones.

 


Goodbye ‘godsend’: Expiration of child tax credits hits home

By JOHN RABY, FATIMA HUSSEIN and JOSH BOAK

Hairdresser Chelsea Woody stands outside her car at a grocery store Tuesday, Jan. 11, 2022, in Charleston, W.Va. For the first time in half a year, families on Jan. 14, are going without a monthly deposit from the federal child tax credit. Woody, a single mother, relied on the check to help raise her young son. (AP Photo/John Raby)

CHARLESTON, W.Va. (AP) — For the first time in half a year, families on Friday are going without a monthly deposit from the child tax credit — a program that was intended to be part of President Joe Biden’s legacy but has emerged instead as a flash point over who is worthy of government support.

Retiree Andy Roberts, from St. Albans, West Virginia, relied on the checks to help raise his two young grandchildren, whom he and his wife adopted because the birth parents are recovering from drug addiction.

The Roberts are now out $550 a month. That money helped pay for Girl Scouts, ballet and acting lessons and kids’ shoes, which Roberts noted are more expensive than adult shoes. The tax credit, he said, was a “godsend.”

“It’ll make you tighten up your belt, if you’ve got anything to tighten,” Roberts said about losing the payments.

The monthly tax credits were part of Biden’s $1.9 trillion coronavirus relief package — and the president had proposed extending them for another full year as part of a 

But Democratic Sen. Joe Manchin, from Roberts’ home state of West Virginia, objected to extending the credit out of concern that the money would discourage people from working and that any additional federal spending would fuel inflation that has already climbed to a nearly 40-year high.

According to IRS data, 305,000 West Virginia children benefited from the expanded credit last month.

Manchin’s opposition in the evenly split Senate derailed Biden’s social spending package and caused the expanded tax credits that were going out in the middle of every month to expire in January. This is whittling down family incomes at the precise moment when people are grappling with higher prices.

However, families only received half of their 2021 credit on a monthly basis and the other half will be received once they file their taxes in the coming months. The size of the credit will be cut in 2022, with full payments only going to families that earned enough income to owe taxes, a policy choice that will limit the benefits for the poorest households. And the credits for 2022 will come only once people file their taxes at the start of the following year.

West Virginia families interviewed by The Associated Press highlighted how their grocery and gasoline bills have risen and said they’ll need to get by with less of a financial cushion than a few months ago.

“You’re going to have to learn to adapt,” said Roberts, who worked as an auto dealer for five decades. “You never really dreamed that everything would all of a sudden explode. You go down and get a package of hamburger and it’s $7-8 a pound.”

By the Biden administration’s math, the expanded child tax credit and its monthly payments were a policy success that paid out $93 billion over six months. More than 36 million families received the payments in December. The payments were $300 monthly for each child who was five and younger, and $250 monthly for children between the ages of six and 17.


Retiree Andy Roberts displays a photo of his daughter, 5-year-old Tesla, at his home Thursday, Jan. 13, 2022, in St. Albans, W.Va. For the first time in half a year, families on Jan. 14, are going without a monthly deposit from the federal child tax credit. Roberts relied on the check to help raise his two young grandchildren, whom he and his wife adopted. (AP Photo/John Raby)

The Treasury Department declined to address questions about the expiration of the expanded child tax credit, which has become a politically sensitive issue as part of Biden’s nearly $2 trillion economic package that has stalled in the Senate.

Manchin has supported some form of a work requirement for people receiving the payment, out of concern that automatic government aid could cause people to quit their jobs. Yet his primary objection, in a written statement last month, sidestepped that issue as he expressed concerns about inflation and that a one-year extension masked the true costs of a tax credit that could become permanent.

“My Democratic colleagues in Washington are determined to dramatically reshape our society in a way that leaves our country even more vulnerable to the threats we face,” Manchin said. He added that he was worried about inflation and the size of the national debt.

The Census Bureau surveyed the spending patterns of recipients during September and October. Nearly a third used the credit to pay for school expenses, while about 25% of families with young children spent it on child care. About 40% of recipients said they mostly relied on the money to pay off debt.

There are separate benefits in terms of improving the outcomes for impoverished children, whose families could not previously access the full tax credit because their earnings were too low. An analysis by the Urban Institute estimated that extending the credit as developed by the Biden administration would cut child poverty by 40%.

The tax credits did not cause an immediate exodus from the workforce, as some lawmakers had feared. The Bureau of Labor Statistics reported that the percentage of people with jobs increased from 58% the month before the monthly payments began to 59.5% last month. That same trend occurred in West Virginia, where the employment-population ratio rose to the pre-pandemic level of 52.9%.

There’s an academic debate over whether the credit could suppress employment in the long term, with most studies suggesting that the impact would be statistically negligible.

Academics who study the tax credit are torn on how a permanent program would affect the economy and child welfare.

Katherine Michelmore, an associate professor of public policy at the University of Michigan, and two other researchers estimated that roughly 350,000 parents would exit the workforce, a figure that is not all that significant in an economy with roughly 150 million jobs.

Michelmore said the long-term effects of a permanent tax credit would have a positive impact on the economy, as children who grow up in families with higher incomes “tend to do better in school, they’re more likely to graduate from high school. It might be 50 years down the road but there will be more cost savings in the future.”

One of the key questions for policymakers is whether bureaucracies or parents are better at spending money on children. Manchin has proposed a 10-year, funded version of Biden’s economic proposal that would scrap the child tax credits focus and instead finance programs such as universal pre-kindergarten, to avoid sending money directly to families.

“It’s a moral question of do you trust families to make their own decisions,” Michelmore said.

Hairdresser Chelsea Woody is a single mother from Charleston, West Virginia, who works six days a week to make ends meet. The extended child tax credit payments had helped pay for her son’s daycare, as well as letting her splurge on clothes for him.

“It truly helps out a lot. It’s an extra cushion, instead of me worrying how I’m going to pay a bill or if anything comes up,” Woody said as she loaded groceries into her car. “It’s helpful for a lot of people. It helps working families out because we struggle the most. I’m hardly home with my kid because I work all the time.”

___

Hussein reported from Washington and Boak from Baltimore.
Inflation Inequality: Poorest Americans Are Hit Hardest By Soaring Prices On Necessities


By Jacob Orchard
THE CONVERSATION
01/14/22 

Inflation By The Numbers: U.S. Consumer Price Index Reaches Highest Level Since 1982

The fastest rate of inflation in 40 years is hurting families across the U.S. who are seeing ever-higher prices for everything from meat and potatoes to housing and gasoline.

But behind the headline number that’s been widely reported is something that often gets overlooked: Inflation affects different households in different ways – and sometimes hurts those with the least, the most.

Inflation, as calculated by the Bureau of Labor Statistics, is designed to track the price increases in a typical U.S. household’s basket of goods. The problem is spending bundles differ across households. For example, a family in the lowest 20% of income typically spends around 15% of their budget on groceries – this is nearly 60% more than households in the top 20% of the income distribution, according to my calculations.

The widening inflation gap


On Jan. 12, 2022, the BLS released figures showing that inflation jumped by 7% in December from a year earlier – the fastest pace since 1982. To see how this varied across households, I used the bureau’s own price data and factored in the typical spending habits of different income groups.

I calculate that inflation is running at 7.2% for the lowest income households – higher than for any other group. For the highest-income families, the rate of change was 6.6%.

The difference between the two income groups steadily increased throughout 2021, starting the year at just 0.16 percentage point but ending at 0.6 percentage point – near the highest it has been since 2010.

The reason for this widening rich-poor inflation gap, known by economists as inflation inequality, comes down to the typical spending habits of people in each income group.

In times of economic uncertainty and recession, most households tend to hold back on buying luxury goods. But by and large, people can’t cut down on necessities such as groceries and heating – although wealthier consumers are better placed to stock up on these necessities when prices are cheap.

This shift of spending away from luxury items like vacations and new cars, and toward necessities, pushes inflation up for poorer families more than richer ones. This is because lower-income households dedicate a higher percentage of their income on necessities.

My data shows that this inflation gap tends to be widest in times of recession or in the early stages of economic recovery. In the aftermath of the Great Recession of 2008-2009, the gap in inflation rates between the lowest and highest income groups was close to 1 percentage point – higher than it is now.

RELATED STORIES
Record US Inflation Growing Concern For Fed, Business

By contrast, in times of economic growth – for example, from 2012 to 2018 – the gap narrows. It even inverted at one point in 2016; the inflation rate for poorer Americans was almost a half-percentage point lower than that of richer Americans.

The main driver of the growing gap in 2021 was the increases in groceries and gas prices. This has made inflation run hotter for all households. But given the greater proportion of household income that poorer families dedicate to food and energy costs, it has affected them more.

Take out gas and grocery prices, then the inflation gap is reduced significantly.

Going forward, I expect the inflation gap will follow a similar pattern as we saw after the Great Recession – as economic recovery turns into continued expansion, inflation will be lower for low-income households than high-income households.

More US consumers are shopping in stores this year compared with last year, according to the National Retail Federation Photo: GETTY IMAGES NORTH AMERICA via AFP / Brandon Bell

This article originally appeared in The Conversation.

Jacob Orchard is a Doctoral Candidate in Economics at the University of California San Diego.



Inflation at 40-year high pressures consumers, Fed and Biden


WASHINGTON (AP) — Inflation jumped at its fastest pace in nearly 40 years last month, a 7% spike from a year earlier that is increasing household expenses, eating into wage gains and heaping pressure on President Joe Biden and the Federal Reserve to address what has become the biggest threat to the U.S. economy.
© Provided by The Canadian Press

Prices rose sharply in 2021 for cars, gas, food and furniture as part of a rapid recovery from the pandemic recession. Vast infusions of government aid and ultra-low interest rates helped spur demand for goods, while vaccinations gave people confidence to dine out and travel.

As Americans ramped up spending, supply chains remained squeezed by shortages of workers and raw materials and this magnified price pressures.

The Labor Department reported Wednesday that a measure of inflation that excludes volatile food and gas prices jumped 5.5% in December, also the highest in decades. Overall inflation rose 0.5% from November, down from 0.8% the previous month.

Price gains could slow further as snags in supply chains ease, but most economists say inflation won’t fall back to pre-pandemic levels anytime soon.

“U.S. inflation pressures show no sign of easing,’’ said James Knightley, chief international economist at the financial services company ING. “It hasn’t been this high since the days of Thatcher and Reagan. We could be close to the peak, but the risk is that inflation stays higher for longer.’’

High inflation isn't only a problem for the U.S. In the 19 European countries that use the euro currency, inflation rose 5% in December compared with a year earlier, the biggest increase on record.

Companies large and small are adapting as best they can.

Nicole Pomije, a bakery owner in the Minneapolis area, said she plans to raise prices for cookies because of surging ingredient costs.

Her basic cookies were priced at 99 cents each, while premium versions were selling for $1.50 each. But Pomije said she will have to jack up the prices of her basic cookies to the premium price.

“We have to make money,” she said. “We don’t want to lose our customers. But I think we might.”

Businesses struggling to hire have hiked pay, but rising prices for goods and services have eroded those income gains for many Americans. Lower-income families have felt it the most, and polls show that inflation has started displacing even the coronavirus as a public concern.

High inflation has put President Biden on the defensive. His administration, echoing officials at the Fed, initially suggested that price increases would be temporary. Now that inflation has persisted, Biden and some congressional Democrats have begun to blame large corporations. They say meat producers and other industries are taking advantage of pandemic-induced shortages to drive up prices and profits. But even some left-of-center economists disagree with that diagnosis.

On Wednesday, the president issued a statement arguing that the drop in gas prices in December and a smaller increase in food costs showed progress.

One trend experts fear is a wage-price spiral. That happens when workers seek more pay to offset higher costs, and then companies raise costs further to cover that higher pay. On Tuesday, Federal Reserve Chair Jerome Powell told a Senate panel that he has yet to see evidence that wages are broadly driving up prices across the economy.

The biggest driver of inflation, according to economists, are mismatches between supply and demand. Used car prices have soared more than 37% over the past year because a shortage of semiconductors has prevented auto companies from making enough new cars. Supply-chain constraints have driven furniture prices nearly 14% higher over the past year.

Shoppers are feeling the pinch all around them, from the gas station to the grocery store.

Vicki Bernardo Hill, 65, an occupational therapist in Gaithersburg, Maryland, says she no longer throws extra canned food, boxes of cereal or bakery items into her shopping cart at the Giant Food store.

“I am trying to stick to my list and buying things that are on sale, ” said Hill.

Because she couldn't find a good deal on a used car, Hill recently bought a new Mazda, spending $5,000 more than she had planned.

Inflation could ease as the omicron wave fades and as Americans shift more of their spending to services such as travel, eating out and movie-going. That would reduce the demand for goods and help clear supply chains.

But some higher prices, such as rents, could prove to be stickier. Rental costs, which have accelerated since summer, rose 0.4% in December, the third consecutive monthly increase. That's significant because housing costs make up one-third of the government's consumer price index.

Powell told Congress that if it becomes necessary to fight high inflation more aggressively, the Federal Reserve is prepared to accelerate the interest rate hikes it plans to begin this year. The Fed's benchmark short-term rate, now pegged near zero, is expected to be bumped up at least three times this year.

Rate increases would make borrowing for a home or car more expensive, and therefore help to cool off the economy.

Some economists and members of Congress fear the Fed has acted too slowly to head off inflation and that this could eventually force even sharper rate increases that could damage the economy.

Republicans in Congress and even some liberal economists say Biden deserves at least some of the blame for high inflation, arguing that the financial rescue package he pushed through Congress last March added significant stimulus to an already strengthening economy.

______

AP Writers Paul Wiseman and Josh Boak in Washington, Dee-Ann Durbin in Detroit and Anne D'Innocenzio in New York contributed to this report.

Christopher Rugaber, The Associated Press

Critics Say I.M.F. Loan Fees Are Hurting Nations in Desperate Need

Democratic lawmakers say the global fund’s surcharges for emergency relief siphon away money that countries need to fight the pandemic.


A Covid-19 vaccination this week in Karachi, Pakistan, one of the financially distressed nations paying loan surcharges to the International Monetary Fund.
Credit...Akhtar Soomro/Reuters


By Patricia Cohen
Jan. 14, 2022, 3:00 a.m. ET


At a time when the coronavirus pandemic is fueling a rapid rise in inequality and debt, a growing number of policymakers and economists are pressuring the International Monetary Fund to eliminate extra fees it charges on loans to struggling nations because they siphon away scarce funds that could instead be used to battle Covid.

The fund, which for decades has backstopped countries in financial distress, imposes these fees for loans that are unusually large or longstanding. They were designed to help protect against hefty losses from high-risk lending.

But critics argue that the surcharges come at the worst possible moment, when countries are already in desperate need of funds to provide poverty aid and public health services. Some of the countries paying the fees, including Egypt, Ukraine and Armenia, have vaccinated only about a third of their populations. The result, the critics argue, is that the I.M.F. ends up undermining the financial welfare and stability of the very places it is trying to aid.

In the latest critique, a letter this week to Treasury Secretary Janet L. Yellen from 18 Democrats in Congress, including Representatives Alexandria Ocasio-Cortez of New York and Pramila Jayapal of Washington, asked the United States to support ending the surcharge policy.

The surcharge “discourages public health investment by developing countries,” the letter said. “This perverse outcome will undermine global economic recovery.” The letter echoed several other appeals from more than two dozen emerging nations, including Argentina, South Africa and Brazil, as well as economists.



Volunteers at a soup kitchen in Buenos Aires last spring. The coronavirus pandemic has further strained Argentina’s poor.
Credit...Sarah Pabst for The New York Times

“Attempts to force excessive repayments are counterproductive because they lower the economy’s productive potential,” the Nobel Prize-winning economist Joseph E. Stiglitz and Kevin Gallagher, a professor of global development at Boston University, wrote in a recent analysis. “Both creditors and the country itself are worse off.”

They added: “The I.M.F. should not be in the business of making a profit off of countries in dire straits.”

The fund primarily serves as a lender of last resort, although recently it has expanded its mission to include reducing extreme inequality and combating climate change.

In addition to building up a reserve, the surcharges were designed to encourage borrowers to repay on time. The poorest countries are exempt.

The fees have become a major source of revenue for the I.M.F., which is funded primarily by its 190 member nations, with the United States paying the largest share. The fund estimates that by the end of this year, borrowers will have shelled out $4 billion in extra fees — on top of their regular interest payments — since the pandemic began in 2020.

The debate over the surcharge is emblematic of larger contradictions at the heart of the I.M.F.’s structure and mission. The fund was created to provide a lifeline to troubled economies so that they recover “without resorting to measures destructive of national or international prosperity.”

But the terms and conditions that accompany its loans have at times ratcheted up the economic pain. “They penalize countries at a time when they are in an adverse situation, forcing them to make greater cuts in order to repay debts,” according to an analysis from the liberal Center for Economic and Policy Research in Washington.

“Demanding these surcharges during an ongoing recession caused by a pandemic goes even more against” the I.M.F.’s founding principles, the center argues.

Voting power in the fund’s governance is based on the size of each country’s monetary contribution, with only the United States having veto power. That means that countries most in need have the least say in how the I.M.F. carries out its role.

In a statement, the Treasury Department reiterated support for the surcharges: “As the I.M.F.’s major shareholder we have an obligation to protect the financial integrity of the I.M.F.” And it pointed out that the interest rates charged by the fund were often far below market rates.

A review of the surcharges last month by the fund’s executive directors ended without any agreement to halt the charges. An I.M.F. statement explained that while “some directors were open to exploring temporary surcharge relief” to free up resources to deal with the pandemic, most others preferred a comprehensive review later on in the context of the fund’s “overall financial outlook.”

Strapped countries that are subject to the surcharges like Argentina balked earlier at the extra payments, but their campaign has picked up momentum with the spread of Covid-19.

“I think the pandemic makes a big difference,” said Martín Guzmán, Argentina’s minister of economy.

He argues that the pandemic has turned what may have once been considered unusual circumstances into the commonplace, given the enormous debt that many countries have taken on to meet its rising costs. Government debt in emerging countries has hit its highest level in a half a century.

The number of nations subject to surcharges increased to 21 last year from 15 in 2020, according to the I.M.F. Pakistan, Egypt, Ukraine, Georgia, Albania, Tunisia and Ecuador are among those paying.

Argentina, which has long had a contentious and bitter relationship with the fund relating to a series of bailouts and defaults that date back decades, has been a leading opponent of the surcharges.

The country is trying to work out a new repayment schedule for $45 billion that the previous government borrowed as part of a 2018 loan package. By the end of 2024, the government estimates, it will have run up a tab of more than $5 billion in surcharges alone. This year, 70 percent of Argentina’s nearly $1.6 billion bill from the I.M.F. is for surcharges.

A protest against a possible new deal with the I.M.F. in Buenos Aires last month.
Credit...Alejandro Pagni/Agence France-Presse — Getty Images

“The charges will be undermining the mission of the I.M.F., which is to ensure global stability and balance of payments,” Mr. Guzmán said.

According to World Bank estimates, 124 million people were pushed into poverty in 2020, with eight out of 10 of them in middle-income countries.

Meanwhile, the costs of basic necessities like food, heating and electricity are surging, adding to political strains. This week, the I.M.F. warned in its blog that continuing Covid outbreaks, combined with rising inflation, debt and interest rates, mean emerging economies should “prepare for potential bouts of economic turbulence.”


How the Pandemic Has Divided the Global Economy

World’s Growth Cools and the Rich-Poor Divide Widens
Oct. 12, 2021


‘We Were Left With Nothing’: Argentina’s Misery Deepens in the Pandemic
April 19, 2021


Debate Looms Over I.M.F.: Should It Do More Than Put Out Fires?
Oct. 9, 2021


Patricia Cohen is the Global Economics Correspondent based in London. Since joining The Times in 1997, she has also written about theater, books and ideas. She is the author of “In Our Prime: The Fascinating History and Promising Future of Middle Age.” @PatcohenNYTFacebook

A version of this article appears in print on Jan. 14, 2022, Section B, Page 1 of the New York edition with the headline: I.M.F. Fees Said to Harm Poor Nations. Order Reprints | Today’s Paper | Subscribe

 Flag of Iran. Photo by Farzaaaad2000, Wikipedia Commons.Iran Will Make US Withdrawal From Region As Painful As Possible – OpEd


By 

By Khaled Abou Zahr *

The year may have only just started, but US troops in Iraq and Syria have already come under attack by drones three times. It is worth noting that, in both countries, the US presence has decreased. In Syria, there are mere hundreds of US troops left in the northeast of the country for counterterrorism purposes. In Iraq, the number is below 2,500 and troops have ended active combat to shift into an advisory role. In both countries, the main goal is now focused on fighting Daesh, yet most of the attacks against them are coming from Iranian-backed groups.

The reductions in troop numbers and the shift in their roles come at a time when the US is negotiating with Iran in Vienna. It is clear that Tehran is directing these attacks to push its message and apply pressure on Washington. The mullahs are convinced that the US will not retaliate or respond strongly to avoid any escalation. The use of weaponized drones is very efficient in its asymmetry and capacity to create irritation without being important enough to provoke a strong military response. It is also an effective communication tool from Iran that underlines its capacity to rain drones and missiles and make life even more difficult for the US.

There is a growing parallel between the Taliban’s objectives in Afghanistan and Iran’s objectives in the Middle East. The goal is now clearly to push for a full withdrawal of US troops from Syria and Iraq. Tehran is comfortable in its thinking that, through pressure in the negotiations in Vienna, as well as through the official political voices from the Iraqi and Syrian governments, it can corner US forces. America has already noticed that, since its withdrawal from Afghanistan, it now has difficulty assessing the counterterrorism risks, especially concerning the links between the Taliban and Al-Qaeda and what the implications are for US national security.

The American military hence understands that a withdrawal from Iraq and Syria would mean more difficulties when it comes to its counterintelligence missions in both countries. This applies not only to Daesh, but also and mostly to all Iranian-sponsored terrorist activities. Unlike during the 2015 Joint Comprehensive Plan of Action negotiations, declarations from US military officials have been more direct in condemning the Iranian proxies and forces, blaming them for the attacks and warning them of potential retaliation. Some military experts state that the small numbers of US forces in both Syria and Iraq are more like hostages than a deterrent.

Last November, a bipartisan group of members of the House of Representatives raised legal questions regarding US military activities that do not involve Daesh. Their letter specifically questioned US airstrikes on sites in Syria that are used by Iran-backed militia groups. It implied that former President Donald Trump and his successor Joe Biden stretched the current legal authorizations with the missions in Syria instead of seeking the approval of Congress. The goal of this letter was to avoid future legal loopholes that could permit more “endless wars.” However, it also means that they consider US military activities in response to Iranian aggression as outside of the current legal scope, so the Iranian terrorist proxies are indeed in luck.

There is an objective from the US to continue its withdrawal from the region and so the question remains whether this will be executed without reducing the pressure coming from Iranian-backed forces. Could a new surge be the solution instead? In 2007, President George W. Bush ordered the deployment of more than 20,000 soldiers in Iraq with the aim of enhancing the general situation to allow for reconciliation and a state-building process. Gen. David Petraeus took command of the Multi-National Force in Iraq and achieved his mission’s goals. But it is highly doubtful that the current US administration would, or even could, follow such a strategy, especially as it views that the same strategy failed in Afghanistan. This leaves the US with few options.

This lack of clarity — whether on the US military’s role or the legal aspect of its operations — underlines the lack of an overarching strategy, not only for Washington’s military presence in both Syria and Iraq, but also on its geopolitical objectives. This has become true for the entire Middle East just as it was true for Afghanistan. The US military, which is trying to maintain a difficult balance and stability despite its small presence, is left fending off Iranian provocations, especially in northern Syria, where the various actors’ roles and alliances are blurred. This situation is in no way sustainable, especially when Russia and China are more assertive in their engagement in the Middle East.

It is similar to the situation in Afghanistan, where the file was passed from one US administration to the next until it reached a point where no one really remembered what the original goal was and what could still be achieved. Therefore, looking at the geopolitical arrangements in Syria and Iraq, everything indicates the pursuit by the Biden administration of an honorable exit. The rehabilitation of Bashar Assad and the new political arrangements in Iraq point to that goal. The political landscape in Washington is also inward-looking to avoid the repetition of such forever wars, rather than maintaining regional security. However, this scenario will only become a reality with a nuclear deal. Tehran understands this and will try to make this exit as painful for the US as its departure from Afghanistan.

  • Khaled Abou Zahr is chief executive of Eurabia, a media and tech company, and editor of Al-Watan Al-Arabi.
  • Flag of Iran. Photo by Farzaaaad2000, Wikipedia Commons.