MySpace, once the undisputed leader in social networking and the most popular topic on Mashable, announced it is cutting nearly 30% of its staff today.

Source:
http://mashable.com/2009/06/16/myspace-layoffs/

9 June 2009

Like so many of his initiatives, President Barack Obama’s announcement Monday at a cabinet meeting that his stimulus package would “create or save” 600,000 jobs over the summer was largely a public relations exercise. Its aim, along with Vice President Joseph Biden’s “Roadmap to Recovery,” unfurled at the same meeting, is to assuage mounting anger over job losses, while doing next to nothing to ameliorate the desperate situation confronting tens of millions of workers.

If anything, Monday’s announcement underscores the administration’s rejection of any serious measures to address a jobs crisis without parallel since the Great Depression. It merits only contempt.

Biden outlined ten initiatives that he said would begin to “build momentum" toward job growth in the coming months. His proposals revolve around accelerating the disbursement to federal agencies, states and local governments of stimulus money already appropriated through the $787 billion American Recovery and Reinvestment Act. No new monies are being allocated to deal with a real unemployment rate that surpasses 16 percent.

The projects Biden hopes will be launched in the coming 100 days involve the hiring of health care workers and teachers, and construction work at military bases, national parks, airports, highways and Veterans Administration centers.

The announcement came exactly one week after the administration forced General Motors into bankruptcy—a move that will further shrink the US’ industrial base and result in the destruction of hundreds of thousands of jobs. According to a recent analysis by the Center for Automotive Research, the forced bankruptcies of GM and Chrysler could result in the loss of 447,000 jobs by the end of 2010.

Even were Obama’s objective realized, 600,000 jobs over the next 100 days would scarcely begin to address the unemployment crisis. It would replace only 10 percent of the six million jobs that have been lost since the recession began in December of 2007, and provide work for just over 4 percent of the 14.5 million officially unemployed.

Since Obama’s stimulus package was signed into law 100 days ago, 1.6 million jobs have been lost. Just to keep pace with the entry of new workers into the labor force, the US economy must generate 450,000 jobs over next three months.

The unemployment figures released on Friday showed that US payrolls shrank by another 345,000 jobs in May. If the same pace of job destruction continues, well over 1 million more jobs will be lost over the next 100 days, eclipsing the 600,000 Obama is pledging to “create or save” by speeding up the disbursement of stimulus funds. This amounts to a tacit admission that the official jobless rate, 9.4 percent for May, will likely climb into double-digits by the end of the summer.

Under Obama, mass unemployment has been joined by the driving down of wages and the ramping up of labor productivity—in other words, an intensification of the exploitation of the working class. According to the Labor Department, workers’ weekly income in May actually fell at an annualized rate of 2.3 percent.

Layoffs and declining wages will deepen the foreclosure and credit crises, as growing numbers of workers are no longer able to afford their mortgages or payments on auto loans and credit cards. Already in the first quarter, a record number of homeowners entered into mortgage delinquency or foreclosure—just over 12 percent of all mortgage loans—according to a recent analysis by the Mortgage Bankers Association.

The administration’s token measures in relation to the unemployment crisis stand in stark contrast to its largess when it comes to the banks. Trillions of dollars have been allocated to bail out the financial aristocracy.

The resulting record budget deficit and vast increase in the national debt are, in turn, being used by Obama to demand sharp cuts in basic social programs such as Medicare and Social Security. While Obama lectures the American people on the need to slash consumption and “live within their means,” he declares that he will do “whatever it takes” to cover the gambling debts of Wall Street speculators.

All of his economic and social policies—from the stimulus package, to housing, to health care “reform”—are tailored to the interests of the financial elite. As a result, they offer neither immediate relief for workers facing the loss of their jobs, incomes and homes, nor a longer-term perspective for addressing the social crisis.

Even as unemployment soars and wages decline, the banks are celebrating a recovery in their profits, based on the massive taxpayer subsidies provided by the government. Wall Street has seen a 35 percent rise in stock values over the past three months while the recession has taken an ever greater toll on working families.

The renewed orgy of money-making on Wall Street—set into motion by the Obama administration’s policies—imparts to Obama’s declaration that he will generate 600,000 jobs over the summer an almost provocative character. This is an administration that believes it has perfected the art of pulling the wool over the population’s eyes. By means of vague and dishonest rhetorical gestures, Obama wagers he can prevent the growth of social opposition while ruthlessly pursuing the class interests of the financial aristocracy.

He is mistaken. The present mood among workers—a combination of shock, anger and dimming hope in the Obama administration—will inevitably give way to a renewal of class struggle.

Independent and united action by workers is the key to stopping the destruction of jobs and living standards. It is necessary to organize strikes and factory occupations to fight against layoffs, to mount protests against home foreclosures and evictions, and to consciously work for the united mobilization of workers, young people, the unemployed, students, and professionals.

The demand must be raised for a trillion-dollar public works program to rebuild schools, health care facilities, public transportation, housing and basic industry. The ill-gotten fortunes of the speculators must be confiscated and used for social needs.

To break the back of the dictatorship exercised by the financial elite, a new political perspective is required. It is not a question of appealing to or pressuring Obama and Congress. Four months after the elections, the Democratic administration and Democratic Congress have demonstrated that they are nothing more than political instruments of the financial elite.

So, while millions of Americans rendered unemployed by the unrelenting recession continue to seethe in pain, there is a glimmer of hope. The pace of job loss in the U.S has significantly slowed in May, reinforcing hopes that the worst is behind us.

Housing sales are up and so is the consumer confidence. The stock markets have bounced back after hitting a 12-year low in March. All these factors indicate that the economy is starting to turn around.

"The pace of the recession finally seems to be slowing," declared Andrew Stettner, deputy director of the National Employment Law Project.

Sung Won Sohn, an economist at Cal State Channel Islands, said of the optimism about the future, “The psychology has improved significantly because of the massive economic stimulus program. That's one of the reasons why layoffs are slowing down."

Recovery not so soon
Experts opine that even as the recession wanes, more job losses may be on the anvil. In fact, the rate of unemployment may be amongst the last indicators to improve even as recovery creeps in, they opine.

Stettner added, "But with the unemployment rate climbing, it should be abundantly clear that the job market is in a hole that could take years to climb out of."

Labor Secretary Hilda Solis observed that dislocated employees have a tough time getting back into the labor force. She said, “It's not going to turn around as quick as you and I would like to see it."

By Ulrich Rippert
15 May 2009

Steel workers outside the Luxemburg headquarters of ArcelorMittal
PHOTO: PIERRE HECKLERA

A demonstration on Tuesday of steel workers in front of the Luxemburg headquarters of the world’s largest steel concern, ArcelorMittal, reflects the growing class antagonisms building up in Europe and throughout the world.

At the start of the meeting, attended by approximately 200 shareholders, the management of ArcelorMittal announced the destruction of 9,000 jobs, including 6,000 in Europe. Germany is to lose 750 jobs, France 1,400 and Belgium 800. Nearly 1,000 jobs will be eliminated in the US.

Around 1,500 steel workers from Belgium and France had travelled by coach and train to the capital of Luxemburg to protest against the planned dismissals. Reduced hours were introduced several months ago at the company’s French plant in Charleroi and its Belgian plant in Lüttich. Now layoffs are in the cards at both factories.

Many workers were especially furious because the management had decided to pay out a dividend of $1.1 billion to shareholders despite a fall-off in production and mass redundancies. “We lose our jobs and the shareholders get a dividend,” was the comment in a television interview by one bitter worker from the ArcelorMittal plant in Florange, France.

The police had sealed off the company headquarters with barriers supervised by special police units. During the demonstration angry workers suddenly attacked the police with paving stones and bottles. The metal barrier was torn down and workers tried to break open the entrance door of the building. There followed a series of violent clashes with the police and company security guards.

According to eyewitness accounts, one steel worker threw a smoke bomb in a window, spreading a noxious smell amongst the assembled shareholders.

According to its own website ArcelorMittal is “by far and away the world’s largest steel producer”. The company has a total of around 60 plants in more than two dozen countries and employs 310,000 workers.

The steel giant arose from the rapid fusion of steel enterprises over the past decade. It emerged in its existing form in 2007 though the merger of the two leading steel producers: Arcelor S.A. and the Mittal Steel Company.

The former chairman of the board of Mittal Steel, Lakshmi Mittal heads the newly fused company with his son Aditya Mittal as President and Chief Financial Officer. The Indian business family Mittal developed its corporate empire by cannibalizing and reorganizing ailing steel plants in Asia. After the collapse of the Stalinist regimes in Eastern Europe and the Soviet Union, they specialized in buying up cheaply and then privatizing former state-owned enterprises. Their sphere of operations extended to Romania, Poland, the Czech Republic, Bosnia and Herzegovina, Macedonia, Kazakhstan and Ukraine.

According to Forbes magazine, Lakshmi Mittal is the world’s eight-richest person with a fortune of $19.3 billion. On the occasion of the marriage of his daughter to a 25-year-old London-based financier five years ago, father Mittal spent an estimated $64 million for the ceremony.

Last year the head of the company was distinguished with the second highest Indian honor, the Padma Vibhushan, for his “unusually outstanding achievements”. The Indian government also organized a special “day of the republic” as a further tribute.

ArcelorMittal is now using the present steel crisis to introduce drastic saving measures, layoffs and wage and benefit cuts in all of the factories belonging to the business empire. The dismissals already announced form only the prelude to the closing of entire plants.

According to the World Steel Federation, the international steel industry is currently undergoing the biggest slump in demand since the Second World War. Against a background of global recession and a dramatic decrease in automobile production and engineering, the demand for steel is expected to fall across the world by 14.9 percent this year. In the European Union the drop in demand will be even higher, at 28.8 percent.

For Germany the trade federation Stahl anticipates a decrease of one quarter in the production of raw steel in 2009. This figure currently appears to be an underestimate. In April German steel production actually sank by 53.1 percent. According to official figures, 45,000 of Germany’s total of 94,000 steel workers are already working reduced hours.

The role of the trade unions

As is the case in all other large companies, the trade unions play a key role at ArcelorMittal in implementing job and benefit cuts. Although the company’s management pursues an international strategy with workers in Europe and across the globe forced them to pay for the consequences in the form of cutbacks and redundancies, the trade unions refuse to organize any joint struggle of all those affected.

Instead they co-operate closely with their respective managements behind the back of the workforce to support concessions aimed at protecting their “own location” at the expense of other sections' workers.

Lakshmi Mittal has gathered considerable experience in his dealings with trade union bureaucrats and their opportunist policies. In Eastern Europe and the states of the former Soviet Union he implemented his privatization plans in close co-operation with the former functionaries of the leading state parties. In 2001 he also made a generous donation to the British Labour Party. Media reports at the time made clear that this generosity was directly bound up with the support of head of the party and government Tony Blair in facilitating his takeover of the Romanian state enterprise Sidex.

Two days before the worker protests at the ArcelorMittal shareholders meeting in Luxembourg, the European Metalworkers' Federation (EMF) issued a press release in which they appealed to “the responsibility and personal interests” of the shareholders. The shareholders would have to ensure that “Mittal submitted a clear industrial plan which makes clear how all ArcelorMittal locations can be preserved in such a way as to enable them to recommence production when the economy picks up,” explained Peter Scherrer, secretary-general of the European Metalworkers' Federation.

The press release continues: “The EMF demands in particular that the shareholders support the conclusion of a European framework agreement to assist in overcoming the crisis for the company.” In fact, such an agreement is aimed at organizing the dismantling of jobs in such a fashion that they can be successfully implemented by the trade union.

The rage of workers which was so visible in their protest in front of the ArcelorMittal headquarters in Luxembourg was not only directed against the planned mass redundancies and simultaneous dividend payout of billions. It was also an expression of growing opposition to the refusal of the trade unions to conduct any international struggle for the defense of jobs.

The White House has given the green light for nationwide wage-cutting with its demands on Chrysler and GM workers, who have seen wages for new-hires slashed by 50 percent, along with the abolition of cost-of-living raises and cuts in vacation pay.

Several new reports show that big business is following the example set in Washington with enthusiasm.

According to an account published Sunday by the Washington Post, recent wage cuts have included a 10 percent reduction for contractors working for Microsoft, cuts for hotel workers in New York City, and reductions for state and local government workers in many areas and in much of the newspaper industry.

The Society for Human Resource Management said that its index of wages for new-hires showed a decline and wage rates for temporary workers are also falling. A survey of young workers by the online advocacy group Qvisory found that 19 percent of adults 29 or younger were out of work, 41 percent had been affected by wage cuts or cuts in work hours, and 40 percent had skipped meals recently to save money. Overall, 62 percent said their economic circumstances were “poor” or only “fair.”

Among the well-known companies that have announced major wage cuts are Advanced Micro Devices, Honda, Hewlett-Packard, Best Buy and FedEx. A Watson Wyatt survey of 245 major corporations in February found that 7 percent had already cut salaries and another 4 percent expected to as the economic slump worsens.

The Federal Reserve Board, in the March edition of its “beige book,” which collates reports from regional Federal Reserve banks, noted “outright reductions in hourly compensation costs” for the first time in the current slump.

The spread of wage-cutting has already begun to impact consumer spending, which fell in March, the first monthly decline of the year. Incomes fell for the third consecutive month, by 0.3 percent in March, “reflecting wage cuts and layoffs as employers cut costs,” according to the Associated Press.

The employment cost index, a broad measure of combined wages and benefits published by the Bureau of Labor Statistics, showed a rise of only 0.3 percent in the first quarter of 2009. It was the smallest quarterly increase since the US Department of Labor began tracking such statistics in 1982. Given the more rapid rise in prices, this means that most working class families have suffered a decline in real wages.

The fall in workers’ real incomes and the growth of mass unemployment are driving a continuing increase in poverty, hunger and homelessness. US food stamp enrollment rose again in February, according to figures reported Monday by the US Department of Agriculture, to a staggering 32.55 million Americans. The number of people receiving food stamps has risen by one million since the financial crisis exploded last September, with more than ten percent of all working people compelled to seek food assistance from the federal government.

According to the Food Research and Action Center, a non-profit group, another 16 million people are eligible for food stamps but are not receiving them, either because they are unaware of their right to benefits, have not applied or have been wrongfully denied.

The sharp fall in wages comes after an economic “upturn,” from 2002 through 2007, that was the worst for the incomes of working people since the Census Bureau began tracking the real purchasing power of wages in the 1940s. For the first time, the real earnings of middle-income families were lower at the end of the “recovery” than they were at the beginning.

More than one-quarter of all American workers, 26.4 percent, earned poverty-level wages in 2007, before the beginning of the current recession. That figure has skyrocketed since.

Economist Paul Krugman called attention to what he termed the “Falling Wage Syndrome” in his Monday column in the New York Times. He warned, “Falling wages are a symptom of a sick economy. And they’re a symptom that can make the economy even sicker.” He pointed to the danger that wage cuts would accentuate the problem of defaults on mortgages and consumer debt payments, as well as depressing consumer spending, the principal engine of the US economy.

A supporter of the Obama administration who occasionally criticizes it from a liberal standpoint, Krugman glossed over the fundamental class issues involved in the ongoing assault on wages.

He wrote: “Some of the wage cuts, like the givebacks by Chrysler workers, are the price of federal aid. Others, like the tentative agreement on a salary cut here at the Times, are the result of discussions between employers and their union employees. Still others reflect the brute fact of a weak labor market: workers don’t dare protest when their wages are cut, because they don’t think they can find other jobs.”

Krugman makes arbitrary distinctions in what is in fact a single process. Cutting wages is the class strategy of the American corporate elite, imposed through all the agencies of the ruling class, starting with the Obama administration.

Just as the Reagan administration’s smashing of the PATCO strike in 1981 gave the signal for the orgy of union-busting and strikebreaking that followed, so the Obama administration’s wage-cutting at Chrysler and General Motors is giving the White House seal of approval to a similar policy by corporate America.

Significantly, one of Obama’s key economic advisers today is Paul Volcker, who served as chairman of the Federal Reserve Board from 1979 to 1987, playing a leading role in the corporate onslaught on the working class and hailing Reagan’s mass firing of the PATCO air traffic controllers.

It was President Obama himself who declared that in the new economy he seeks to create, Americans would “consume less and save more.” If one asks exactly which Americans will be consuming less, the figures cited above supply the answer: working class Americans, many of whom are already living on the edge of poverty and bankruptcy.

As for Krugman’s reference to “discussions between employers and their union employees,” this too is an evasion. Giant corporations like the New York Times Co. are demanding savage wage cuts—using, as at the Times-owned Boston Globe—the threat of outright closure and mass layoffs—while relying on the union apparatus to impose their dictates on the work force.

There is no end to the demands by big business that workers pay for the crisis of American and world capitalism. What is required is a movement from below that rejects the entire framework of the profit system and advances the independent social and class interests of working people, based on a socialist program.

About 4,000 of those employees are teachers.

Most school districts have issued layoff notices because they still do not have a state budget for the fiscal year that begins July 1. They also had to comply with a state law requiring them to tell teachers by April 15 whether their jobs might be cut.

A few districts, such as Mesa Public Schools, also note that they are coping with sharp declines in enrollment. That means they'll get less state funding.

Many district governing boards waited until the last two weeks, hoping that the Legislature and Gov. Jan Brewer would hand them a budget sooner than later.

School district officials and board members said they had to estimate future funding based on conversations with legislators and lobbyists. Districts believe they will receive 10 to 15 percent less state money than the current school year because of a looming $3.3 billion state revenue shortfall. They purposely overestimated the severity of the state cuts as a precaution.

Districts have promised they will try to rehire the laid-off instructors this summer, when they have an official budget.

Consequences

State Superintendent of Public Instruction Tom Horne has said these pre-emptive layoffs have spread unnecessary fear.

"It's very damaging to give notices, layoffs, to teachers who they're going to hire back," Horne said.

It's ruining morale, he said, and chasing some qualified teachers out of education, or at least out of the state.

But education groups argue that districts had to take action or risk lawsuits for breaching contracts. The state teachers union, the Arizona Education Association, said it conducted its own survey of 36 districts and thinks the full scope of layoffs is much more severe. The teachers union believes up to 10,000 school employees will be out of jobs next year.

"There's no exaggeration," Arizona Education Association spokesman John Hartsell said.

The Legislature in late January "claimed it would cut education by $991 million," Hartsell said.

Schools make up about 43 percent, or $4 billion, of the state budget.

Ways to save

Arizona has a vast spectrum of districts, from the small and rural to the large and urban. Their measures to address the projected deficit vary, from pay cuts to shorter workweeks to furloughs.

The Fowler Elementary District in Phoenix didn't issue any layoffs but cut 13 positions through attrition, said Superintendent Marvene Lobato. The Chino Valley Unified School District will have a four-day school week.

In the Mayer Unified School District, officials said the superintendent has accepted a pay cut to keep teachers on board.

Union input

Some districts have talked with their local union to target cuts. Several, including the Paradise Valley Unified School District, decided against renewing agreements with teachers on one-year contracts brokered through phased retirement firms.

The Arizona Education Association argues that those employees, although many have more than 25 years in education, are just on contract and aren't entitled to jobs that could be taken by younger teachers.

Paradise Valley Unified is not renewing contracts with 300 such retiring teachers.

Horne warned that districts shouldn't cut their most experienced staff. "It's a myth that they have to lay off by seniority," he said.