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newstfionline · 4 years

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Headlines

The Covid-19 economic shock (NYT) The economy’s recovery from the fastest, deepest recession in U.S. history is likely to be a long, grinding affair. More than $6.5 trillion in household wealth vanished during the first three months of this year as the pandemic tightened its hold on the global economy, the Federal Reserve said this week. That’s roughly equivalent to the economies of the United Kingdom and France combined. “This is the biggest economic shock in the U.S. and in the world, really, in living memory,” Fed Chair Jerome H. Powell said Wednesday. “We went from the lowest level of unemployment in 50 years to the highest level in close to 90 years, and we did it in two months.” Almost 90 percent of the 20 million workers who lost their jobs in April said they had been laid off temporarily and expected to return to their jobs, a possible sign the economy might quickly return to normal. Yet economists are far less sanguine. After a quick initial bounce this year, the economy “will go largely sideways” until a coronavirus vaccine is developed, according to economist Mark Zandi of Moody’s Analytics.

Tenants behind on rent in pandemic face harassment, eviction (AP) Jeremy Rooks works the evening shift at a Georgia fast-food restaurant these days to avoid being on the street past dusk. He needs somewhere to go at night: He and his wife are homeless after the extended-stay motel where they had lived since Thanksgiving evicted them in April when they couldn’t pay their rent. They should have been protected because the state’s Supreme Court has effectively halted evictions due to the coronavirus pandemic. But Rooks said the owner still sent a man posing as a sheriff’s deputy, armed with a gun, to throw the couple out a few days after rent was due. The pandemic has shut housing courts and prompted most states and federal authorities to initiate policies protecting renters from eviction. But not everyone is covered and a number of landlords—some desperate to pay their mortgages themselves—are turning to threats and harassment to force tenants out. The evictions threaten to exacerbate a problem that has plagued people of color like Rooks long before the pandemic, when landlords across the U.S. were filing about 300,000 eviction requests every month. The data and analytics real estate firm Amherst projects that 28 million renters, or about 22.5% of all households, are at risk of eviction.

Pandemic leads to a bicycle boom, and shortage, around the world (AP) Fitness junkies locked out of gyms, commuters fearful of public transit, and families going stir crazy inside their homes during the coronavirus pandemic have created a boom in bicycle sales unseen in decades. In the United States, bicycle aisles at mass merchandisers like Walmart and Target have been swept clean, and independent shops are doing a brisk business and are selling out of affordable “family” bikes. Bicycle sales over the past two months saw their biggest spike in the U.S. since the oil crisis of the 1970s, said Jay Townley, who analyzes cycling industry trends at Human Powered Solutions. The trend is mirrored around the globe, as cities better known for car-clogged streets, like Manila and Rome, install bike lanes to accommodate surging interest in cycling while public transport remains curtailed.

Mexico desperate to reopen 11 million-job tourism industry (AP) An irony of the coronavirus pandemic is that the idyllic beach vacation in Mexico in the brochures really does exist now: The white sand beaches are sparkling clean and empty on the Caribbean coast, the water is clear on the Pacific coast and the waters around the resort of Los Cabos are teeming with fish after 10 weeks with no boats going out. There are two-for-one deals and very eager staff. It’s all only an airline flight—and a taxi ride, and a reception desk—away, and that’s the problem. There are a number of ways to think about it: Might it be safer to travel than stay home? How much is mental health worth, and, if people are going to socially distance anyway, why not do it in a beautiful, isolated place? On the other hand, despite the pandemic, flights are often crowded, even hotels in Mexico that bend over backward to disinfect everything have little capacity to actually test their employees, and while fellow guests are likely to be few and far between, they also probably won’t be wearing masks. In Quintana Roo state, where Cancun is located, tourism is the only industry there is, and Cancun is the only major Mexican resort to reopen so far. Mexico’s tourism income crashed in April, when it was only 6.3% of what it was one year ago. Hundreds of thousands of hotel rooms were closed. Tourism provides 11 million jobs, directly or indirectly in Mexico, and many of those workers were simply sent home to wait it out.

Top US diplomat finds virtual path into Venezuela amid rift (AP) A year after shutting down the U.S. Embassy in Caracas, Washington’s top diplomat in Venezuela has found a way to slip back inside the South American nation—at least virtually. Each Thursday afternoon, James Story hits the “Go Live” button on Facebook from his office in the U.S. Embassy in Bogota or his home in the Colombian capital hundreds of miles from Caracas. In a freewheeling approach, he answers questions in fluent Spanish from Venezuelans and the few U.S. citizens still in the country, addressing the latest intrigue and turmoil bubbling over in Venezuela and the United States. For 30 minutes, Story talks about everything from Venezuela’s purchases of gasoline from Iran, despite its vast oil reserves, to recent unrest in the U.S. over George Floyd’s death in police custody to accusations that President Nicolás Maduro is undermining Venezuela’s constitution. Story’s low-budget, weekly question-and-answer session on the popular social media platform is a way for Story to get his message out since he’s deprived of traditional tools such as visiting hospitals and schools, talking to local reporters and hosting cocktail parties for power brokers.

Colombia’s confirmed coronavirus cases rise above 50,000 (Reuters) Reported coronavirus cases in Colombia have risen to over 50,000, the country’s health ministry said on Sunday, as neighboring Ecuador approaches the same milestone. The disease overwhelmed Ecuador’s health system, in some cases leaving authorities unable to collect the bodies of the deceased and forcing the government to temporarily store corpses in refrigerated shipping containers. Colombia’s economy has been battered by the twin ills of a coronavirus quarantine put in place by President Ivan Duque and falling oil prices.

Europe’s borders reopen but long road for tourism to recover (AP) Borders opened up across Europe on Monday after three months of coronavirus closures that began chaotically in March. But many restrictions persist, it’s unclear how keen Europeans will be to travel this summer and the continent is still closed to Americans, Asians and other international tourists. Border checks for most Europeans were dropped overnight in Germany, France and elsewhere, nearly two weeks after Italy opened its frontiers. The European Union’s 27 nations, as well as those in the Schengen passport-free travel area, which also includes a few non-EU nations such as Switzerland, aren’t expected to start opening to visitors from outside the continent until at least the beginning of next month, and possibly later.

Surveillance tech (Worldcrunch) Following pushback from Black Lives Matter activists, Amazon has suspended police use of its facial recognition software for one year. IBM followed suit, also announcing it will stop offering its similar software for “mass surveillance or racial profiling.” But the moves come amid a tumultuous few months for so-called “surveillance tech,” which some have touted during the pandemic as a necessary tool to ensure public cooperation to stem the spread of a deadly virus. Despite the potential medical benefits, the use of geolocation technology to curb COVID-19 has raised concerns over fundamental data protection, especially in countries like China, South Korea and Israel where tracking has been more intrusive: enlisting credit card records for purchase patterns, GPS data for travel patterns, and security-camera footage for verification. In Russia, the pandemic proved a convenient excuse to test a nascent, China-inspired citizen monitoring system, backed by a Moscow court ruling in early March stating that the city’s facial recognition system does not violate the privacy of its citizens. Even places not particularly known for their police state-like tactics are pushing limits: In Paris, cameras were installed at the popular Châtelet metro station to monitor mask use, as it is illegal to take public transportation without a mask. Similar (and seemingly well-intentioned) efforts like fast-tracked coronavirus data collection apps have raised suspicions of data protection breaches by both hackers and governments, including in the Netherlands and South Africa. In Germany, a country known for its hard stance on privacy protection, new surveillance tools are being met with a considerable amount of defiance.

American sentenced to 16 years in Russia on spying charges (AP) A Russian court on Monday sentenced an American businessman to 16 years in prison on spying charges, a sentence that he and his brother rejected as being political. The Moscow City Court read out the conviction of Paul Whelan on charges of espionage and sentenced him to 16 years in a maximum security prison colony. The trial was held behind closed doors. Whelan, who was arrested in Moscow in December 2018, has insisted on his innocence, saying he was set up. Speaking after the verdict, U.S. Ambassador John Sullivan denounced the secret trial in which no evidence was produced as an egregious violation of human rights and international legal norms. He described Whelan’s conviction as a mockery of justice and demanded his immediate release.

For Migrants in Russia, Virus Means No Money to Live and No Way to Leave (NYT) Migrant workers from Central Asia, shrugging off the risk of coronavirus infection, have gathered in groups each day outside their countries’ embassies in Moscow, banging on doors and fences and shouting for officials to come out and tell them when they can finally get on a charter flight home. With regular flights canceled, charters offer the only feasible way out for the more than five million migrant workers from former Soviet republics now stranded in Russia as a result of the pandemic, with many living in increasingly dire circumstances. While Russia has been battered by the virus, with the third most cases in the world after the United States and Brazil, the crisis has hit migrant workers especially hard, as they were the first to lose their jobs and often the last to receive medical help. Many have no money for food and, once infected with the coronavirus, have been left in crowded dorms to fight the disease by themselves. Many would like to return to their countries. But they can’t. Before the pandemic hit, more than 15 flights left Moscow each day for various cities in Uzbekistan, Central Asia’s most populous nation. Today, there are only two charters a week, and the embassy’s waiting list has more than 80,000 names.

Press freedom in the Philippines (Foreign Policy) The journalist Maria Ressa, the founder of news site Rappler, has been found guilty of criminal libel by a Manila court in a case Human Rights Watch described as a “devastating blow” to press freedom in the Philippines under President Rodrigo Duterte. Ressa and another Rappler journalist, Reynaldo Santos Jr., were sentenced to up to six years in prison under the country’s cybercrime prevention act of 2012, which includes libel. The article that was deemed libelous predated the law, but a later online update of a typo was enough for prosecutors to consider it worthy of an indictment.

18 dead, 189 hurt as tanker truck explodes on China highway (AP) A tanker truck exploded on a highway in southeastern China on Saturday, killing 18 people and injuring at least 189 others, authorities said. The explosion caused extensive damage to nearby buildings. One photo showed firefighters hosing down a row of buildings with blown-out facades well into the night. The truck carrying liquefied gas exploded around 4:45 p.m. on the Shenyang-Haikou Expressway south of Shanghai in Zhejiang province, the official Xinhua News Agency said, citing local authorities.

Hong Kong families, fearing a reign of terror, prepare to flee the city (Washington Post) China’s Communist Party has haunted Leung’s family for generations. Her father, Guo Yao, fled forced labor and the violent purges of the Cultural Revolution for a better life in Hong Kong, where he arrived with his wife in 1973 to find relative freedom and prosperity. Now, 17 years after the death of her father, Leung is preparing to flee Hong Kong. A new law approved by the Communist Party to take effect this summer will allow China’s powerful state security agencies to operate in the territory, paving the way for political purges and intimidation of government critics by secret police. Officials are pushing to impose party propaganda in schools. With their political freedoms deteriorating, nurses, lawyers, business people and other skilled workers are rushing to renew documents that could provide a pathway to residency in Britain, or finding ways to emigrate to Taiwan, Canada or Australia. Applications for police certificates required to emigrate soared almost 80 percent to nearly 21,000 in the latter half of 2019 from a year earlier, even before the advent of the security law, coinciding with a crackdown on pro-democracy protests. Animal rescue groups have reported an increase in surrendered dogs as their owners leave Hong Kong. Protesters fearing persecution have sought refuge in Germany, the Netherlands and United States. The exodus of talent recalls the pre-handover years, when anxiety over Beijing’s rule drove tens of thousands of people out of Hong Kong.

Netanyahu turns to rich friend to fund corruption trial fees (AP) Israeli Prime Minister Benjamin Netanyahu is on trial for accepting gifts from wealthy friends. But that has not stopped him from seeking another gift from a wealthy friend to pay for his multimillion-dollar legal defense. The awkward arrangement opens a window into the very ties with billionaire friends that plunged Netanyahu into legal trouble and sheds light on the intersection of money and Israeli politics. Netanyahu has asked an Israeli oversight committee to allow a 10 million shekel ($2.9 million) donation from Spencer Partrich, a Michigan-based real estate magnate, to fund his legal defense. The request for financial aid from a friend is not illegal, and Israeli politicians have a long tradition of hobnobbing with wealthy Jewish supporters abroad. But to some, the optics of Netanyahu’s request are sketchy. “It is a problem that we have prime ministers who have ties to moguls,” said Tomer Naor, of the Movement for Quality Government in Israel, a good governance group. “When the borders blur, you are blinded by the big money. You want more of it. Then all of a sudden the friend asks for a little favor and that poses a problem.”

Nigeria attacks (Foreign Policy) At least 141 people were killed in two militant attacks in Northern Nigeria over the weekend, both have been claimed by Islamic State West Africa Province. The attacks in Monguno and Nganzai districts of Borno state killed at least 60 people, while a separate attack in Gabio district killed at least 81. The United Nations, which has a humanitarian base in Monguno, said it was “appalled” by the attacks.

#headlines #news

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crinaboros · 6 years

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Where have all the mothers gone?

by CRINA BOROŞ, Investigate Europe | The Black Sea, 5 October 2017

Romania’s parents are leaving to work abroad in the absence of a living wage at home, and children are paying the price

The drive from the northwest Romanian city of Iasi to the village of Liteni is a winding route through an open vista of sunflowers. Tractors work the fields next to peasants driving battered horse-and-carts, heavy with hay. On a fallow meadow outside the village, a shepherd with a tanned face holds up a gnarled wooden crook, and calls to his flock. The sheep pass by a lake, recently restocked with carp, and now open for fishing.

Crossing a narrow bridge into the village, we drive along roads that kick up clouds of dust, between rows of houses - new and old. Many are unfinished, with bright tiled roofs, and exteriors of plaster, standing on land scattered with building tools and broken pieces of fence.

We follow the road to the heart of the village, accompanied by the local school headteacher, George Moga, who points to the buildings.

“That house was made with money from Greece,” Moga says. “That one - with earnings from Italy.”

It’s a torrid July day and Moga takes us to a smallholding which breeds pigs and chickens. He introduces the owners, a family led by father Costel Butnaru.

“Come here in the strawberry season,” he says, “you won't find the shadow of a woman in this village!”

Photo: After working abroad family reunited in Liteni, Iasi county. Costel Butnaru (left), Lavinia Tihulcă, Petre Butnaru, Gabi Butnaru, Mihaela Butnaru and two nephews. Credit: Johnny Green, Investigate Europe, July 2017, Liteni, Romania

“It may be tough abroad, but being left behind is worse.”

Costel’s wife Vasilica, 44, has been on the road between home and work for eight years. She travels from Romania to Almonte, Huelva, in southwest Spain, where she shares a room with five women. From March to mid-summer, they pick strawberries and in September, they prepare plants for the coming season.

“I got left behind to take care of the children,” says Costel. “I taught them how to write, took their hands in mine and we drew letters together. I was trying my best to be there for them, and make sure they have what they need.”

A decade ago Vasilica was a housewife, and Costel was earning ‘nice money’ working in construction in Bucharest. But since the financial crisis of 2008, he could not find stable employment.

Sometimes there is work in the vineyards of nearby wine-maker Cotnari. Over 35 kilometres away is a car upholstery factory in Lețcani, but they only pay the minimum wage, plus food vouchers. Costel would need to commute by bicycle, even at night, and in weathers that can reach minus 20 degrees.

“It may be tough abroad,” says Costel, “but being left behind is worse.”

Romanians now has one of the highest percentages of its citizens working abroad in Europe, and many come from rural areas such as Liteni, where work is scarce or poorly-paid.

The villagers moved abroad to work in building, fruit-picking, housekeeping or care work in Italy, Spain, Germany and Cyprus.

But since the construction boom in southern Europe collapsed in 2008, the jobs available favour skills usually associated with women - which means a new phenomenon is emerging in Romania: villages with few - if any - women of working age, and large numbers of children growing up without a mother.

“We didn’t have our Sunday rest. We even worked on Easter Day.”

13 year old Gabi Butnaru has just finished 6th grade in the village of Liteni.

“Mommy used to help me read,” she says. “Sometimes she would help me with homework.”

But her mother has been leaving for work abroad since her daughter was in kindergarten. This year, on 9 March, a day after International Women’s Day, she left to pick strawberries and raspberries on a farm in Lucena, Spain.

Gabi’s life changed. When her father was out farming, she had to learn how to bake potatoes, make soup, and clean and feed the pigs, cows and chickens, before she could find the time to study.

“It was tough,” says Gabi, her eyes welling up with tears. “Finding the energy to do it all, to do it well…” With a straight face, she starts crying.

Her mother Mihaela is now back in Romania. It was tough for her to be away from home, among foreigners, and working for a boss with high expectations, whose language she did not speak.

She shared a room with four other women on the farm. Monthly rents in the nearby Spanish town were around 250 Euro per month, and the women needed to keep this cash for home.

Mihaela worked to exhaustion.

“We didn’t have our Sunday rest,” she says. “We even worked on Easter Day!”

Collecting strawberries is painful work. Pickers must bend over seven days a week, up to eight hours a day, plus overtime, and need to move fast through the bushes.

“I only got up to move when I carried the crates of fruit,” Mihaela says. “There is no stool to sit on, and nowhere to sit at all. Some women can rest on their fists, but I can’t. My back is killing me! When pain cuts like a knife, you feel like throwing in the job!”

Her husband Petre runs through the list of drugs his 33 year-old wife takes to Spain: painkiller Ketonal for backache, paracetamol for toothache, valerian herb for stress relief, and aspirin to increase the blood flow.

Despite the physical pain at work, and the emotional pain at home, Mihaela says: “We don’t have a choice: we need the money!”

Her husband broke his left leg 12 years ago, and cannot bend it. Now he works odd jobs, such as shoeing horses, welding and ploughing.

“He earns enough for bread and a bottle of cooking oil,” says Mihaela. “But with these earnings, child benefit and tiny aid from the local government, one can’t afford much.”

The family sometimes landed in debt, which she needed to pay off, and meant leaving abroad for longer, while her injured husband stayed at home with her daughter.

“A child is suffering,” she says. “She’s doing hard household work and yet she’s only a child. She shouldn’t be exploited, she’s so young! She’s had a lot to bear from a very young age!” Mihaela’s voice fades and tears resume. “I can’t bear being apart from them!”

Gabi nods through her sobbing, and admits she was crying often on the phone to her mother, asking Mihaela to return. Will she let her mother go abroad again?

Photo: Revisiting separation: Gabriela Butnaru (13), Lavinia Tihulca (13), Mihaela Butnaru (33). Credit: Johnny Green, Investigate Europe, July 2017, Liteni, Romania

“No!” Gabi says without hesitation, wiping her face dry. “All I want is us all to be at home, united, and to be a happy family.”

Revisiting separation: Gabriela Butnaru (13), Lavinia Tihulca (13), Mihaela Butnaru (33) (photo: Johnny Green, Investigate Europe)

“School, clean, cook, do homework, sleep, repeat”

13 year-old Lavinia’s mother left to Spain for the first time this year to pick fruit, and she had to take on her mother’s duties. This was stressful, as Lavinia loves to feel prepared for the school day, which lasts from 8 am to 2 pm. “Then I would clean, cook, do homework, sleep,” she says, “get up in the morning. Get dressed. Brush hair. Go to school. Repeat.”

She is in a class where 13 of her fellow pupils from 28 have parents working abroad. In many cases, this has ruined marriages, and the parents divorced.

“These pupils are not how they used to be,” says Lavinia. “They’re more distant, more reserved, less childish. Some of their grades are falling. All they can think about is the break-up of their parents.”

The number of children growing up with one or two parents working abroad is in the 100,000s in Romania, and could account for around ten per cent of all kids in the country, though true statistics are sketchy.

At the primary and middle school in Liteni, 115 pupils from 350 have at least one parent working abroad. The headteacher George Moga says economic migration scars many of the children left behind.

“We’ve experienced cases of child burn-out,” Moga says. “Parents who work abroad tell children that they are doing this for them. Meanwhile, the child’s sole duty is to study hard, so children who have to learn to manage without a parent’s help or supervision, drown themselves in study or household chores, and often end up unable to smile.”

Photo: “We’ve experienced cases of child burn-out,” says Liteni headteacher George Moga. Credit: Johnny Green, Investigate Europe, July 2017, Liteni, Romania

Nation on the Minimum Wage

The United Nations believes around 3.4 million Romanians have emigrated since the fall of Communism - 17 per cent of the country’s citizens.

Every village in the country has seen its share of work migrants - officially there are now over one million Romanians are in Italy, 900,000 in Spain, 600,000 in Germany and 180,000 in the UK, but the real figure is greater.

At first glance, an observer would ask whether this was due to Romania’s rapid deindustrialisation following Communism, which must have witnessed a surge in unemployment.

But on paper, only 4.18 per cent of Romanians are jobless. One of the lowest numbers in the EU. So why do they move abroad?

Firstly, there is no job security. Only 5.1 per cent of the working poor aged 16 to 64 have a permanent employment contact.

Secondly, wages are too low. The country has the second lowest minimum wage in the EU - at a net value of 1,065 Lei (232 Euro) per month. Over 230,000 citizens earn less than the minimum wage. The state has to top up the difference with benefits.

Thirdly, too many employers pay this rock-bottom salary. According to Labour Inspection agency data, around a third of contracts covering full and part time jobs pay the national minimum wage or under.

Romania’s average (median) salary, the net cash that families take home at the end of the day - is the EU’s lowest - at 2,448 Euro per annum, and has been since the crisis of 2008. Bulgaria beats it with 3,151 Euro, according to Eurostat.

This is set against the fact that prices of goods and energy costs are more or less the same as in western Europe.

“An increased number of sexual abuse cases”

This behaviour of the children left behind changes. A 2012 UNICEF report, and a Soros Foundation study found that parent migration was one of the main causes of children leaving school early. In general, one in five kids in Romania leave school early. This rate is on the rise - to 19.1 per cent in 2015, according to an EU report.

Director of the Social Assistance and Child Protection Services (DGASPC) in Iaşi Niculina Karacsony says a major problem is that many children have not been prepared by their parents for a temporary separation.

“We’re not condemning parents who leave to earn a living abroad,” says Karacsony. “But we are condemning those who do so without preparing their children for the separation, and who do not communicate often with them.”

This is backed up by Alex Gulei, executive director of Alternative Sociale, an NGO in Iaşi which works closely with DGASPC. “One thing that comes up again and again is that they hate when parents forget to Skype at 7 pm as they are expecting, or promise to return on a date when they don’t,” says Gulei. “They hate it when parents do not deliver on their word.”

In the most extreme cases, say experts, kids left behind by parents have died following irreversible depression. Another problem is domestic violence. Among the cases of children of migrant workers that are referred to DGASPC Iaşi, its director stresses “an increased number in cases of sexual abuse”.

This most commonly happens within the family, and when mothers are not at home. Some fathers have not seen their wives for a long time, and have taken to drink, while brothers have abused their siblings. Victims have been as young as three years’ old.

“I grew up with my parents fighting. This was our normal.”

19 year-old Andreea’s mother worked abroad in Italy during her teenage years, leaving her and her younger sister with a father who took to drink and violence.

“I grew up with my parents fighting,” she says. “This was our normal. I was glad when mommy left because my father was brutal with her. Finding work in Italy was her escape.“

Now she is a volunteer organising social activities at the Alaturi de Voi Foundation, which aims to reduce teenage pregnancies and drug abuse, and offers young people social and psychological support.

Photo: “I asked my mother to come home immediately, but because we would be left with no money, I had to wait for her to save for one more year,” Andreea, now 19. Credit: Johnny Green, Investigate Europe, July 2017, Liteni, Romania

Just before Andreea became a teenager, her mother, a sales assistant, needed money because she was in debt after defaulting on bank loans. Her earnings from work in Italy covered the interest payments, and she could send cash home only for food.

“But there would be times when father would waste all the money on smoking or another of his addictions,” she says. ”He became jealous, and suspected my mother of cheating.”

Her mother telephoned often and saw her daughters once or twice a year. But having to step into her mother’s role, take care of her little sister and the house, meant Andreea would be fainting, and feeling sick, and soon developed gastritis.

”It was mainly because of stress, but also poor nutrition,” she says. “I was young when mother left, I couldn't cook and was eating instant soup all the time.”

During this time, the teenager was admitted to hospital for five times with gastritis.

As her parents’ marriage disintegrated, her father began hitting his two daughters.

”He filed for a divorce, thinking this would bring my mother home and make her stay,” she says. “Mother saw this as her chance to escape a bad marriage and she took it.”

As the separation began, Andreea’s father kicked his two kids out of the house. They did not even have time to pack their belongings. In shock, they sought refuge at their grandparents’ house, where - due to the age gap - they would have constant arguments.

“I asked my mother to come home immediately, as I could not look after myself,” she says. “But because we would be left with no money, I had to wait for her to save for one more year.”

Alexandra says that she has lived in “total stress” most of the years spent away from her mother.

“If someone is confrontational or raises their voice, I’m in tears,” she says. “I cry out randomly and I don’t understand why.”

ORIGINAL PUBLICATION - The Black Sea - http://m.theblacksea.eu/stories/article/en/mothers-leave-romania#

Photography: Johnny Green

#migration #labour migration #gig economy #national minimum wage #Romania #crina boros #iasi #liteni #johnny green #investigate europe #the black sea #children #home

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d33-alex · 4 years

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Building up the pillars of state

The pandemic and the state

Economic policy and the virus

Rich countries are experimenting with radical new economic policies. History suggests that the effects will be permanent

“The government intervention is not a government takeover,” the American president argued. “Its purpose is not to weaken the free market. It is to preserve the free market.” The imf pointed to the “unprecedented policy actions undertaken by central banks and governments worldwide”. The economic response to the financial meltdown of 2007-09 was big enough. But in answer to the covid-19 pandemic policymakers are launching even bigger, more radical interventions. Putting the economy on a wartime footing is supposed to be temporary. A look at 500 years of governmental power, however, suggests another outcome: the state is likely to play a very different role in the economy—not just during the crisis, but long after.

The policy response has been swift and decisive. Globally central banks have cut interest rates by more than 0.5 percentage points since January and have launched huge new quantitative-easing schemes (creating money to buy bonds). Politicians are throwing open the fiscal spigots to support the economy. As The Economist went to press, America’s Congress was set to pass a bill that boosts spending by twice as much as President Barack Obama’s package in 2009 (see United States section). On top of that, Britain, France and other countries have made credit guarantees worth as much as 15% of gdp, seeking to prevent a cascade of defaults. On the most conservative measure, the global stimulus from government spending this year will exceed 2% of global gdp, a much bigger push than was seen in 2007-09 (see chart 1). Even Germany, whose fiscal rectitude is the punchline of economists’ jokes, is spending more (see Charlemagne).

The upshot is that the state is swelling. Last year overall government spending accounted for 38% of gdp across the rich world. The stimulus effort, combined with a fall in nominal gdp in the next few months, will push that ratio well above 40%, perhaps to its highest-ever level.

To focus just on the numbers misses something crucial, though. There are important qualitative changes under way in how policymakers manage the economy—the responsibilities they have seized for themselves, what is seen as a legitimate action and what is not, and the criteria used to judge policy success or failure. On these measures, the world is in the early stages of a revolution in economic policymaking.

Central banks have in effect pledged to print as much money as necessary to keep down government-borrowing costs. The European Central Bank is promising more or less to buy everything that governments might issue; this should reduce the gap in borrowing costs between weaker and stronger euro-zone members, which widened in the early days of the pandemic. On March 23rd America’s Federal Reserve promised to buy unlimited quantities of Treasury bonds and agency mortgage-backed securities, if necessary. The rise in borrowing caused by America’s stimulus may be matched, at least initially, by bond purchases by the Fed, which smells a lot like money-printing to finance deficits. The central bank also announced new programmes to support the flow of credit to companies and consumers. The Fed is now the direct lender of last resort to the real economy, not just the financial system.

Politicians, too, are ripping up the rulebook. In a standard recession firms are allowed to go bust and people to become unemployed. Even in normal economic times, roughly 8% of businesses in oecd countries go under each year, while 10% or so of the workforce lose a job. Now governments hope to stop this from happening entirely. President Emmanuel Macron does not speak only for France when he vows that no firm will “face the risk of bankruptcy” as a result of the pandemic. Boris Johnson, Britain’s prime minister, contrasts his government’s response with the one during the last financial crisis: “everybody said we bailed out the banks and we didn’t look after the people who really suffered”. Larry Kudlow, the director of America’s National Economic Council, calls America’s fiscal stimulus “the single largest Main Street assistance programme in the history of the United States”, comparing it favourably with Wall Street bail-outs a decade ago.

To that end, governments across the rich world are channelling vast sums to firms, providing them with grants and cheap loans in an attempt to preserve jobs and prevent them from going bust. In some cases the government is paying the wages of people who cannot work safely: the eu in particular has embraced this policy, while the British state will pay up to 80% of the wages of furloughed workers. The American package includes loans to small businesses that will be forgiven if workers are not laid off. Households across the rich world are being given temporary relief on mortgages, other debts, rent and utility bills. In America people will also be sent cheques worth up to $1,200.

The vast majority of economists support these measures. Nominally they are temporary, designed to hold the economy in an induced coma until the pandemic passes, at which point the world is supposed to revert to the status quo ante. But history suggests that a return to pre-covid days is unlikely. Two lessons stand out. The first is that governmental control over the economy takes a large step up during periods of crisis—and in particular war. The second is that the forces encouraging governments to retain and expand economic control are stronger than the forces encouraging them to relinquish it, meaning that a “temporary” expansion of state power tends to become permanent.

The sinews of power

In recent centuries government spending across the capitalist world has leapt. In the 1600s the outlays of the entire English state accounted for about 5% of gdp, with practically no spending on public health or education, nor much regulation of economic life, save for crude contract enforcement (see chart 2). That began to change in the 18th century, and from the end of the 19th century Britain and other capitalist countries saw increased state intervention, with more government resources being devoted to public goods such as welfare and education and commensurate increases in taxes (see chart 3).

Governments have had some lean periods. In Victorian Britain state spending fell as a share of gdp—though that was largely because economic growth was so rapid, and the measure in chart 2 excludes spending by local governments, which became exceptionally powerful over the period. In the 1980s Ronald Reagan succeeded in stabilising America’s day-to-day federal spending. His reforms, as well as those of Margaret Thatcher in Britain, reduced the role of government in fixing prices; privatisations encouraged profit-making firms to provide formerly state-run services such as power and transport. Yet even during Reagan’s presidency the number of pages of federal regulations rose by 14%.

A back-of-the-envelope calculation finds that, of the more than 50 countries for which there are long-run fiscal data, two-thirds saw their government-spending-to-gdp ratio increase between 1988 and 2018. America’s ratio of day-to-day public spending to gdp is eight percentage points higher than it was in 1962, when Milton Friedman wrote “Capitalism and Freedom”, a book which warned of the dangers of socialism.

Historians argue over why the public sector has a tendency to expand. In the 19th century Adolph Wagner, a German economist, suggested that as places got richer, demands on government grew. An increasingly complex production process needed more regulation and contractual enforcement. Wealthier people would also demand more public welfare provision, the theory goes, perhaps because they worried less about their own material situation and could thus turn their attention to others.

Wagner’s theories also pointed to what economists call “hysteresis” in fiscal policy. Governments may intend to boost spending only for a short while. But then expectations change, making such expansionism hard to undo. It is now common sense that the state should provide education to children at no cost to parents, or support people who are out of work. American governments have in recent decades cut the share of public spending devoted to welfare. However, it remains politically impossible to bring it down to anywhere near its level in the mid-1960s, before President Lyndon Johnson’s “war on poverty” was launched. The upshot is that while it is easy to ratchet state spending up, it is much harder to push it down.

Perhaps the most important lesson of 500 years of history, however, is that nothing has helped boost state power in Europe and America more than crises. Historians broadly agree that the growing fiscal capacity of capitalist countries from the 1700s onwards was linked to the need to fight increasingly sprawling and expensive wars, especially those using navies and where the field of battle was far from home. (The Seven Years War of 1756-63 is widely considered to be the first global war because it involved a large number of countries, often fighting in foreign theatres.)

To win, countries required increasingly complex, well-resourced administrations which could supply fighters with weapons that worked and food that had not rotted. They also needed the money to pay for it, whether by levying more taxes or by becoming a reliable borrower in markets—which called for yet more bureaucracy. Growing state capacity, in turn, allowed for the emergence of the capitalism we know today, with properly regulated markets, efficient telecoms and transport, and healthy and educated citizens.

The winners of those wars also seized control of resources, from sugar and spices to linens, which proved integral to industrialisation. So it is no surprise that historians contend that wars and other crises have been an engine of economic development. It is no coincidence that the Netherlands, the first country to embrace capitalism, in the 17th century, was also at the time the world’s pre-eminent naval power, fighting and winning numerous wars over the period; or that Britain, which came to dominate the seas in the 18th century, then became the world’s largest economy. According to Larry Neal of the University of Illinois at Urbana-Champaign, the Industrial Revolution “occurred precisely during and because of the Napoleonic wars” of the late 18th and early 19th centuries.

The responses to crises since then have further consolidated the power of the state. France’s top rate of income tax was zero in 1914; a year after the end of the first world war it was 50%. Canada introduced income tax in 1917 as a “temporary” measure to finance the war. During the second world war income tax in America turned from a “class tax” to a “mass tax”, with the number of payers rising from 7m in 1940 to 42m in 1945 (today more than twice as many Americans are caught in the net). The second world war also led to calls for the introduction of cradle-to-grave welfare systems. So did the dynamics of the cold war: governments across the capitalist world wanted to forestall a communist rebellion. The state-led model pursued in Europe from the 1950s to the 1970s, in which bureaucrats controlled services from power networks to transport systems, would have been unimaginable without wartime experience, where the state managed practically everything and ordinary people made tremendous sacrifices, whether on the battlefield or at home.

The new ideology

What will be the lasting effects of the covid-19 pandemic? Start with the size of the state. Over the next year government debt will rise sharply, as spending jumps and tax revenues collapse. When the economy recovers, attention will turn to paying it down. “Capital and Ideology”, a new book by Thomas Piketty, a French economist, shows that after the first and second world wars many governments in the West turned to heavier taxation of the incomes and wealth of the richest to achieve that goal. Another option is “financial repression”, where governments force citizens to lend to them at below-market rates (see Free exchange).

Central banks’ innovations will also have lasting consequences. Few economists believe that the explicit co-operation between the fiscal and monetary authorities risks creating runaway inflation, as it has done in Venezuela and Zimbabwe, any time soon. (If anything, the bigger worry right now is deflation, not least because of a collapse in oil prices.) However, just as the use of quantitative easing in 2008-09 opened the door to more of the same down the road, it will become harder to make the argument that the “magic money tree” does not exist. Politicians in the future may lean on central banks to peg interest rates at zero to support government borrowing, even during times of economic growth and low unemployment. If central banks promised to fund the government during the coronavirus pandemic, they might ask, then why shouldn’t they also fund it to launch an expensive war against a foreign enemy or to invest in a Green New Deal?

The final impact of the current interventions relates to policymakers’ tolerance for risk. No one cheers when a firm goes bust, but often the process helps shift resources from less efficient to more efficient uses, thus raising productivity and average living standards over time. The novel notion that the government needs to preserve firms, jobs and workers’ incomes at practically any cost may endure, especially if the intervention proves successful in narrow terms. The policy will formally end once the pandemic has passed, but political pressure for similar support schemes—from the nationalisation of tottering firms to the provision of a universal basic income—may well be higher the next time a sharp downturn comes along. If politicians are able to preserve jobs and incomes during this crisis, many people will see little reason why they should not try again in the next one.

Calls for a more activist fiscal-monetary government will come against a backdrop of structurally higher demand for state spending. The public sector tends to provide labour-intensive services in which productivity improvements are difficult, such as health care and education. It must match the salaries of workers in other sectors in order to retain its own, even as they become less productive relative to the overall economy—a phenomenon which raises the cost of provision. Long before the coronavirus pandemic, fiscal wonks argued that government spending would soar during the 2020s, even in the absence of a crisis. That was not only or even primarily because an ageing population would raise demand for health care, but because health systems would be able to treat a wider range of illnesses more effectively, which would push up costs.

The likely economic effects of the pandemic reach far beyond the role of the state. Countries could become even less welcoming to immigrants—the better, they may believe, to reduce the likelihood of infection from foreign arrivals. On the same logic, resistance to the development of dense urban centres could mount, thereby limiting construction of new housing and raising costs. More countries may seek to become self-sufficient in the production of “strategic” commodities such as medicines, medical equipment and even toilet roll, contributing to a further rollback of globalisation. But the redefined role of the state could prove to be the most significant shift. The rules of the game have been moving in one direction for centuries. Another radical change is looming.

The Economist, 28th March 2020

#pandemic #coronavirus #covid19 #economy #social

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samuelfields · 6 years

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Why Households Need To Earn $300,000 A Year To Live A Middle Class Lifestyle Today

In order to comfortably raise a family in an expensive coastal city like San Francisco or New York, you’ve got to make at least $300,000 a year. You can certainly raise a family earning less as many do, but it won’t be easy if your goal is to save for retirement, save for your child’s education, own your own home instead of rent, and actually retire by a reasonable age.

Although $300,000 is a lot compared to the median household income in the United States of ~$59,000, it’s not an outrageous sum of money once you look at the realistic income statement I’ve put together for this post. All expenses in my example use current prices. I’ve also cross checked the expenses with my family’s monthly expenses to make sure they are within reason.

Finally, I use $300,000 in this post because I believe it is the ideal income for up to a family of four to experience maximum happiness. At $300,000, you aren’t paying an egregious amount in taxes, you probably aren’t killing yourself at work, but you’re still earning enough to live a comfortable lifestyle anywhere in the world.

Half the US population lives on the coasts, therefore, this post is directly targeted at folks who need to live on the coasts because of their jobs. This post should also provide insights to non-coastal city residents on how good you’ve got it if you enjoy living where you are.

Who Makes $300,000 A Year?

Before we look at the income statement, I’d like to go through a list of various workers who will eventually make ~$300,000 on their own or in household income if they find someone who also works.

* A Bay Area Rapid Transit janitor made $234,000 + $36,000 in benefits in 2016

* A Bay Area Rapid Transit elevator technician made $235,814 + $48,429 in benefits in 2016

* Starting salaries for 22 year old employees at Facebook, Google, and Apple range from ($80,000 – $120,000) + ($10,000 – $50,000) in annual equity grants.

* 30 year old first year Associate in banking earns $150,000 in base salary + ($0 – $120,000) in bonus

* A 26 year old Airbnb employee shared he got a $250,000 total compensation package back in 2015

* A 26 year old first year law associate at a firm like Cravath make $180,000 base + $20,000 sign on bonus. By the end of their 6th year they are making over $300,000.

* A 29 year old Director of Marketing at a startup makes between $120,000 – $180,000.

* A personal finance blogger with 500,000 pageviews earns between $150,000 – $600,000

* A 42 year old college professor at Berkeley makes $235,000 on average and $279,000 at Columbia and NYU

* The average specialist doctor finishing his or her fellowship at 32 makes $300,000. The average salary for a primary care physician is $200,000.

The permutations of people making $300,000 goes on and on. You can have one person make $300,000 and another make $0. You can have a teacher making $65,000 married to a 5th year engineer making $250,000. The amount of households in big coastal cities making $300,000 is ubiquitous.

Living A Middle Class Lifestyle On $300,000 A Year

Please study this chart closely. Every expense has been carefully vetted to give you the most realistic budget possible that’s not out of control.

Gross Income Review

This dual income household puts away the maximum $18,500 a year each in their respective 401(k)s. With the passage of new tax laws in 2018, they’ve lost their ability to deduct more than $10,000 worth of state income and property taxes. As a result, I’ve used the new $24,000 standard deduction for married couples to keep things simple.

They have a marginal federal income tax rate of 24% and a marginal California income tax rate of 9%. I estimate their combined effective tax rate is roughly 27%, +/- 1%, for a tax bill of $64,530. Yes, their total tax bill is $5,530 more a year than today’s median household income, so hopefully folks who earn less can give them some slack.

What’s nice about 2018 and beyond is that this family now gets a $2,000 child tax credit. In the past, the credit began to disappear for married couples who earned more than $110,000 and for single filers with AGI above $75,000. Now, singles and married couples can earn up to $200,000 and $400,000 respectively, before their child tax credit begins to disappear.

Child tax credit income thresholds have risen

Expenses Review

Childcare ($24,000): There’s no getting around this expense if both parents are working. Babysitting and childcare for $20/hour is the standard rate I’ve found in San Francisco. I know some families who only pay $10/hour because they are co-sharing the sitter with another family. Either way, childcare for a baby/toddler before they attend first grade costs between $17 – $40 / hour in a big city.

If the parents decide to send their child to private school, this $24,000 annual expense will continue. It’s a shame that so many expensive coastal cities have troubled public school systems. In San Francisco, there’s a lottery system for the sake of social engineering. In other words, even if you buy a $1.5M median home and pay $20,000 a year in property tax, you are not guaranteed to have your kid get into the public school down the street.

Food ($25,200): When you are a dual job household with a baby, there’s little time to cook. Further, given the family is living in a city like New York or San Francisco, food is world class, and on demand food delivery is ubiquitous. It makes little sense to spend hours cooking when you’re already tired and want to reserve your remaining energy for taking care of your baby. However, food is where this family can cut expenses if they start feeling a little tight.

Mortgage ($46,800): Although the payment is $3,900 a month for a $900,000 mortgage at 3.25%, $2,000 of it goes towards paying down principal and building net worth. Therefore, you can theoretically add $24,000 a year to their $37,000 a year in 401(k) savings. Their $1.5M assessed house is a standard 2,000 sqft, three bedroom, two bathroom home on a 3,000 sqft lot. But this is where the SALT cap deduction really hurts homeowners in expensive real estate markets. In the past, they could have deducted $29,250 of mortgage interest to offset part of their income. Now this deduction is capped at a maximum $10,000.

Vacation ($7,800): Some will say that spending three weeks of vacation is a luxury, but I say spending three weeks of vacation is normal for two working parents who want to keep their sanity.When I left my job in banking at age 34, I had been taking six weeks of vacation each year for three consecutive years and I took every day I was allowed off. Three weeks had felt too little for me. By law, every country in the EU has at least four weeks of paid vacation days. Meanwhile, Brazil gets 41 paid vacations days a year. Yes, their respective economies might be a mess compared to ours, but at least they are enjoying life!

Car Payment ($7,400): When you have a baby, all you want to do is protect him or her from harm. Even if you are the best driver in the world, one reckless drunk driver might t-bone you one evening. No longer do you feel comfortable driving a compact city car while transporting your family. Instead, you want a larger vehicle that has the highest safety rating. Related: Safety First: Finally Bought A Family Car

Baby/Toddler Things ($6,000): You can spend as little or as much as you want on your baby. But this family buys disposable diapers, not washable diapers, tons of baby proofing material, lots of toys, the best car seat, and two strollers. It’s funny, but one of the best toys for our son is a tissue box.

Entertainment ($6,000): Date night can easily cost $200+ an outing for two once you include tickets to a ball game or a show and transportation. Entertainment also includes the cost of sporting equipment, memberships, Netflix, cable, internet, and more. If your friends invite you to a weekend getaway, a bachelor or bachelorette party, or a function or two, your entertainment budget will be blown to smithereens.

CPI for all urban consumers has increased by 68% since I graduated from HS in 1995

Final Cash Flow Review

The end result is annual cash flow of only $4,090, which could get spent in a hurry as things always pop up. But overall, this middle class family is building roughly $53,000 in net worth each year through principal pay down and 401(k) savings plus any appreciation in their investments and primary residence.

After 22 years of work with no change in income or expenses, this household will likely amass a net worth of over $2,000,000 and the ability for at least one spouse to retire since their son will have graduated college. However, based on my recommended net worth goal for financial freedom equal to 20X annual expenses, this couple needs to accumulate closer to $3,500,000 to really feel comfortable for both to retire.

2018 Federal Income Tax Rates

After analyzing all the numbers above, the ideal household income to raise a family is $315,000 after deductions. At $315,000 you pay a 24% marginal income tax rate and avoid having to paying a whopping 8% more in federal income tax on each dollar over $315,000. This jump is large compared to the 2% jump from 22% to 24%.

Based on my experience, happiness did not increase for me when I began making over $200,000 as an individual. Happiness did not increase for us when we began making over $300,000 either. Therefore, due to the increase taxes and increase stress, it seems pointless to put yourself through the ringer simply to try and make more from a day job.

However, if this couple were to earn $376,000 and then take the $24,000 standard deduction and contribute $37,000 in their respective 401(k)s to bring taxable income down to $315,000, they would have an additional ~$43,000 in cash flow each year. For financial security and retiring earlier, that’s a nice extra buffer.

Perhaps It’s Time To Move

In order for this household to achieve financial independence, they’ve got to either up their 17% gross savings rate, figure out a way to reduce expenses, or boost income. Since boosting income probably hurts their quality of life, the best way is to reduce expenses. After 10 years of aggressive saving and earning, moving to a lower cost area to work or retire could be the perfect final move.

There’s a moving truck shortage in San Francisco because so many people are moving out of this expensive city. The trend is towards relocating towards the heartland, which is where I’m investing some money. Thanks to technology, there’s no need to grind so hard in cities where the median home price is over $1M. The country is large. Go explore it!

Readers, what do you think is the ideal household income for raising a child in an expensive coastal city? What do you think of this household’s expenses? I estimate that a $300,000 household income is equivalent to roughly $120,000 in a non-coastal city if this helps folks get a better idea of the numbers.

https://www.financialsamurai.com/wp-content/uploads/2018/03/300000-A-Year-Middle-Class-Lifestyle_Compressed.mp3

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ronaldmrashid · 6 years