Stopping the epidemic of catalytic converter theft

By Sally Greenberg, Chief Executive Officer, National Consumers League

For many years, I drove a 2007 Toyota Prius. I loved my little fuel-efficient and quiet machine, getting 45 mph and putting almost 189,000+ miles on it. All went well until one night a few years ago when—being an insomniac, I was up reading at 3 am—outside my window I heard what sounded like someone taking bolts off a tire, a loud buzzing or whirring sound. It lasted about 5 minutes. I thought some kindly father or uncle was putting air in a kid’s tire or changing a flat.

The next morning when I headed out for work, I started up my Prius, and to my shock, it sounded like a jet engine driving down the street! It dawned on me that the sound I heard last night was guys cutting the catalytic converter (CC) off my Prius! To borrow a phrase my mother used to say, I was mad as a wet hen!

 So I called my insurance company.

And, sure enough, they confirmed that 2005-2009 Priuses are a prime target because their CCs have precious metals that can be melted down and sold by unscrupulous actors. The CC is used to filter out harmful byproducts from the car’s exhaust, using precious metals like platinum, palladium, and rhodium to accomplish this. These metals can sell for hundreds to thousands of dollars per ounce.

While my auto insurer, State Farm, thankfully covered most of the replacement cost, I had to cancel going to work. I couldn’t drive the car so I had to have it towed to my garage seven miles away. I ended up paying for a shield to be placed on the CC to prevent it from happening in the future. In total, I was out of pocket $1,000 while the repair cost more than $3,500.

According to State Farm, the average cost of a repair comes in at around $2,900. As of October 2023, $41.7 million had been paid out to State Farm customers to repair and replace the part. In addition to the cost of replacement, customers report that repairs can take weeks to months, depending on the vehicle and due to a shortage of available replacement parts. Used vehicle lots are bearing a large brunt of this wholescale theft and insurance companies are also paying needless costs.

Ever since my catalytic converter incident, I’ve taken a closer look at this issue and learned that there is no legitimate use for a sawed-off CC because it cannot be used in another vehicle. The only thing it’s good for is its melted-down metals. Thus, the business model is illegal. In other words, there are bad guys on both sides—the theft rings and those who accept and pay for the scrap metal for melting down.

The good news is that in the first half of 2023, claims are down. There were around 14,500 claims filed then, compared to the 23,000 claims made during the same timeframe in 2022.

Carfax, however, issued a warning that the nation might be underestimating how widespread the problem is because many car owners don’t file insurance claims. Some drivers don’t have full coverage on older vehicles and some don’t have insurance at all.

That is why we welcome efforts by Congress to pass laws to deter catalytic converter theft. The bills introduced so far in the House and Senate include marking the part with a unique number and requiring the identity of those selling and buying the CC. NCL supports both!

H.R. 621, the PART Act,  was introduced by Reps. Jim Baird (R-Ind.), Betty McCollum (D-Minn.), Angie Craig (D-Minn.), Randy Feenstra (R-Iowa), and Michael Guest (R-Miss.). S. 154 was introduced by Sens. Amy Klobuchar (D-Minn.), Mike Braun (R-Ind.), Ron Wyden (D-Ore.), and J.D. Vance (R-Ohio).

We are working with the National Auto Dealers Association and 20 other organizations who all sent a letter to the leadership of the House and Senate Commerce Committees in support of the PART Act in May. NCL urges members to cosponsor H.R. 621/S. 154.

As for me, I replaced my 2007 Prius last summer with a new Prius Prime, whose CC is relatively worthless in terms of precious metals. I love my new car and am so relieved to know it won’t be a target for thieves in the night.

NCL looks forward to working with Congress to pass the PART Act, which will protect consumers and insurance companies from the hassle and expense of catalytic converter theft.

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Resources:

Issue Brief

Request to Cosponsor

Current Cosponsors

Coalition Letter to Commerce Committees

 

 

NCL urges regulators to investigate auto makers’ data collection practices

March 27, 2024

Media contact: National Consumers League – Melody Merin, melodym@nclnet.org, 202-207-2831

Washington, DC – Today, the National Consumers League sent a letter to the Federal Trade Commission urging oversight of vehicle manufacturers’ collection of consumer data. Modern cars can collect a range of information on drivers, including the locations they visit, their exact weight, and their texts and call records. Consumers are often unaware of this data collection and are even more surprised when insurance companies utilize this surveillance to increase drivers’ premiums. As digitally connected vehicles become more commonplace, the risks they pose to consumer privacy will only become greater—absent mandatory safeguards.

The full letter can be found here.

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About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit nclnet.org.

NCL endorses the Shrinkflation Prevention Act

March 13, 2024

Media contact: National Consumers League – Melody Merin, melodym@nclnet.org, 202-207-2831

Washington, DC – Today, the National Consumers League sent a letter to the United States Senate urging action on the Shrinkflation Prevention Act. As American consumers struggled with spiking inflation, companies posted steep profits. One analysis found that corporate greed drove over 50% of consumer price increases in the years following the pandemic. One of the methods businesses have used to extract greater profits has been shrinkflation—selling less product at the same price. The Shrinkflation Prevention Act would officially designate this as an unfair or deceptive practice.

“Multiple surveys have found that consumers are unhappy with this practice,” said NCL CEO Sally Greenberg. “Almost four out of five Americans say they feel cheated by shrinkflation. Despite this sentiment, sellers continue to take advantage of the public and participate in this trend.”

The full letter can be found here.

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About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit nclnet.org.

NCL applauds Biden Administration actions to minimize unfair charges, protect producers from retaliation

March 5, 2024

Media contact: National Consumers League – Melody Merin, melodym@nclnet.org, 202-207-2831

Washington, DC – Today, the White House Competition Council announced new actions to lower costs for consumers and promote market health. The Consumer Financial Protection Bureau (CFPB) finalized a rule to save consumers $10 billion a year by capping credit card late fees to an average of $8. The Federal Communications Commission (FCC) is initiating a ban on bulk billing, a practice where landlords or service providers charge all tenants in a building for a particular service—even for residents who do not choose that service. Lastly, the Department of Agriculture (USDA) is implementing protections for farmers and ranchers from retaliatory practices used by the industry’s dominant firms.

The following statement is attributable to NCL Chief Executive Officer Sally Greenberg:

“Under President Biden’s leadership, consumer protection agencies are doing critical work to guard the marketplace against industry misconduct. As more industry sectors have become increasingly consolidated, today’s actions are necessary to ensure that consumers aren’t ripped off and to protect producers from illegal retaliation and discrimination. When businesses concentrate market power and employ unfair practices to maintain that dominance, new legal safeguards and structural reform become necessary to protect the public from further harm. Today’s announcements are an important piece of this effort to maintain healthy marketplaces that benefit consumers and workers.”

The National Consumers League has worked to protect both consumers and workers from consolidated corporate power since 1899. From advocating against banking fees that disproportionately affect marginalized communities to fighting for transparency in telecom billing, NCL continues to provide a voice for the public interest.

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About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit nclnet.org.

A coalition of consumer, health groups – including NCL – call for nutrition, ingredient, and allergen labeling on alcoholic beverages

February 27, 2024

Media contact: National Consumers League – Melody Merin, melodym@nclnet.org, 202-207-2831

Washington, DC – A coalition of consumer and health groups is urging Treasury Secretary Janet Yellen to ensure that the agency responsible for regulating most alcoholic beverages in the U.S. – the Alcohol and Tobacco Tax and Trade Bureau (TTB) – keeps its commitment to require standardized alcohol labeling on all beer, wine, and distilled spirits products by initiating three promised rulemakings on nutrition, ingredients, and allergen labeling on an accelerated basis.

The appeal comes in the form of a February 27 letter from five leading public interest groups as TTB begins a series of “listening sessions” on labeling and advertising of alcoholic beverages on February 28. Raising concerns that the listening sessions are no more than a delay tactic to maintain the status quo and “slow walk deliberations for months,” the organizations – the Asthma and Allergy Foundation of America (AAFA), Center for Science in the Public Interest (CSPI), Consumer Federation of America (CFA), Food Allergy Research and Education (FARE), and National Consumers League (NCL) – called for TTB to publish the rulemakings by June 2024.

The Treasury Department promised that TTB would issue mandatory alcohol labeling rules in a November 17, 2022 letter in response to a lawsuit filed by CSPI, NCL, and CFA. The Department stated its intention to publish the three rulemakings before the end of 2023.

“We write … to express our dismay and serious concern that TTB has backtracked from its written undertaking of the November 17, 2022 agreement,” the groups wrote to Secretary Yellen. “TTB has, in effect, enabled recalcitrant companies by delaying indefinitely rulemakings on mandatory alcohol labeling while opting for a voluntary rule under which labeling “Serving Facts” or “Alcohol Facts” and ingredients are optional.”

Focusing on the health consequences of delaying action on alcohol labeling, the letter from advocates to Secretary Yellen describes how better alcohol labeling will benefit the 84 percent of U.S. adults who drink alcoholic beverages – 216 million people – and who currently do not have the facts about the alcohol they are consuming to protect their health and safety. Overconsumption of alcohol is a costly public health problem that has become much worse in recent years, as alcohol-related deaths have risen substantially. Among the key concerns, alcohol is involved in about 30 percent of all traffic crash fatalities in the U.S, is a source of empty calories that contributes to obesity, can impact blood sugar control in people with diabetes, and labeling can be a life-or-death matter for people with food allergies. Additionally, excessive drinking increases the risk of liver disease, hypertension, cardiovascular disease, alcohol use disorders, certain cancers and severe injuries.

“The consensus among public health and nutrition experts and consumers themselves, in favor of mandatory and complete alcohol labeling is overwhelming,” said Thomas Gremillion, Director of Food Policy at the Consumer Federation of America. “By reneging on its promise to initiate rulemakings, TTB continues to deny Americans the same helpful and easily accessible labeling information now required for conventional foods, dietary supplements, and nonprescription drugs.”

The letter to Secretary Yellen also stresses that alcohol manufacturers have the capability to put standardized Serving Facts labels on their products, when required. This is the case for products such as some hard ciders, hard seltzers, and wine coolers that are regulated by the Food and Drug Administration, which requires such products to have the same Nutrition Facts panel and ingredients statements on nonalcoholic beverages, from soft drinks to juices.

“To date, TTB has taken the position that requiring standardized nutrient content labeling on alcoholic beverages is too costly and burdensome for beverage alcohol manufacturers,” said Sally Greenberg, CEO of the National Consumers League. “However, the inconvenient truth for the industry is that some of the very same companies whose products do not include a Serving Facts statement if they are regulated by TTB already put complete alcohol labeling on their hard ciders, hard seltzers, wine coolers, and other FDA regulated wines and beers.”

Highlighting that the time has come for mandatory alcohol labeling, the letter makes clear that the agency’s current voluntary labeling rules are not working. Although the rule gives companies the option of putting “Serving Facts” or “Alcohol Facts” and ingredients information on their products, new research from the Center for Science in the Public Interest finds that most manufacturers have opted out of TTB’s voluntary program. Using TTB’s COLA database to examine the labels for 132 of the nation’s top beer and wine brands, CSPI’s study found that only 11 labels of the 65 beer brands examined (17%) and none of the 67 wine brands included ingredients lists while 18 beers (28%) and no wines used the voluntary “Serving Facts” label, and one additional beer brand carried the voluntary “Alcohol Facts” label. CSPI’s review also showed that even when serving information is included on beer and wine labels, there is no standard format for where and how the disclosures appear, making it hard for consumers to find information easily and compare different brands.

“We have the data that demonstrate that Treasury’s voluntary rule has failed to adequately improve transparency in alcohol labeling,” said Dr. Peter G. Lurie, President of the Center for Science in the Public Interest. “Ensuring that the agency ends this ineffective voluntary regime by issuing mandatory labeling rules necessitates national leadership. This is why we are appealing directly to Secretary Yellen to intercede personally to require the agency to commit to publish all three proposed rules by June 2024.”

The 2022 letter whereby TTB undertook to publish standardized alcohol content, calorie, and allergen labeling by the end of 2023 resulted from a lawsuit filed by Center for Science in the Public Interest, Consumer Federation of America, and the National Consumers League on October 3, 2022. The suit charged TTB with failing to act on a citizen petitionsubmitted to the Treasury Department in 2003 to mandate alcohol labeling. CSPI, CFA, and NCL filed the petition along with a coalition of 66 other organizations and eight individuals, including four deans of schools of public health.

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About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit nclnet.org.

NCL applauds FTC action to stop imminent grocery monopoly 

February 26, 2024

Media contact: National Consumers League – Melody Merin, melodym@nclnet.org, 202-207-2831

Washington, DC – Today, the Federal Trade Commission (FTC) and bipartisan state attorneys general sued to block the proposed merger between Kroger and Albertsons. The $24.6 billion deal—the largest supermarket merger in U.S. history—would create a near monopoly by consolidating 5,000 stores and 4,000 pharmacies under one corporation. Without FTC action, consumers would see inflated prices and workers would be stuck with anticompetitive compensation.

“Decades of ignoring federal law have allowed industry consolidation to grow unchecked, leaving everyone worse off except for a handful of executives at the top,” said NCL CEO Sally Greenberg. “The FTC is rightfully asserting its authority and putting the interest of consumers and workers first. Monopolists should know that they can no longer take advantage of the American public without facing legal challenges.”

The proposed deal would eliminate competition between Kroger (including Fred Meyer, Fry’s, and Harris Teer) and Albertsons (among its subsidiaries are Haggen, Safeway, and Vons). Last year, a coalition including NCL and 250 national, state, and local organizations urged the FTC to prevent this merger from taking place. Joining the FTC’s lawsuit are bipartisan attorneys general representing Arizona, California, D.C., Illinois, Maryland, Nevada, New Mexico, Oregon, and Wyoming.

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About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit nclnet.org.

The 340B drug discount program should be helping patients in need, not boosting pharmacy chain profits

By Sally Greenberg, Chief Executive Officer, National Consumers League

The federal 340B drug discount program is a worthy and critical program. Created by Congress in 1992, it mandates that pharmaceutical manufacturers participating in the Medicaid program must offer prescription medicines at discounted rates to community health centers and safety-net hospitals serving low-income and uninsured patients. Over the years, this program has given vulnerable patients access to the drugs they need and freed up resources for the qualified facilities to offer more health care services to indigent communities.

Over the past decade or so, however, this valuable program has been increasingly corporatized by for profit entities known to increase costs for consumers including middlemen like pharmacy benefit managers and pharmacy chains. Too many of the dollars circulating through the 340B program are benefiting the well-off and for-profit corporations, instead of consumers with significant health and financial needs. News stories have shined a spotlight on big health systems using the program to bolster profits, while hallowing out critical resources in underserved areas. However, more attention needs to be given to the billions of 340B dollars going to major pharmacy chains like CVS, Walgreens, Walmart and Rite-Aid that are not benefiting the patients this program is intended to serve. Increasingly, however, policymakers at the federal and state level are suggesting bailing out these for-profit entities under the guides of “contract pharmacy” legislation.

Here’s the problem: In 2010, the federal government issued guidelines allowing 340B-eligible health providers to contract with for-profit retail pharmacies to dispense medications, with virtually no rules or safeguards. Since that time, the number of pharmacies participating in the 340B program has grown from 789 in 2009 to over 25,000 today. If this meant more access to affordable drugs for consumer, that would be one thing, but this has not been the case. As contract pharmacies have increased, so too has consumer challenges affording their medicines, nearly in parallel. For example:

  • Even though 340B contract pharmacies are receiving drugs at discounted prices, there is no evidence they are passing those savings onto consumers. One analysis from the respected IQVIA firm found that 340B discounts were shared with consumers in only 1.5 percent of eligible pharmacy claims.
  • Although the 340B program is intended to benefit underserved, vulnerable communities with high proportions of poor and uninsured patients, hospitals in the program are contracting with pharmacies that are not, in fact, in areas afflicted with poverty and a scarcity of health care services.
  • The vast majority of 340B contract pharmacy arrangements are with the aforementioned big national chains like CVS and Walgreens, which are enjoying enormous profits as a result of their participation in the drug discount program. Contract pharmacies collected an estimated $13 billion in gross profits in 2018, with a 72% profit margin on 340B drugs (because they are getting those drugs at a steep discount, which they don’t share with consumers). Needless to say, fattening corporate pharmacy profits should not be this program’s mission.

Contract pharmacy abuse of the 340B program has not gone unnoticed by policymakers in Washington. In January 2024, leaders in the U.S. Senate questioned CVS Health and Walgreens as part of as part of an ongoing investigation into how health care entities use and generate revenue from the 340B Drug Pricing Program. The Government Accountability Office (GAO) and the Department of Health and Human Service Office of the Inspector General (OIG), also highlighted issues with the program’s integrity as it relates to contract pharmacy use. 340B is in desperate need of transparency and oversight, not unfettered expansion.

Yet that is exactly what is happening in some U.S. states. This matter is taking on a greater urgency now as several states are contemplating legislation that doubles down on the problem instead of fixing it. Consumers would be shocked to learn their state representatives are ushering through changes that would further solidify the profitable role these large corporate contract pharmacies are playing in the abused 340B program. Policymakers at the state and federal level need to address a fundamental question – where do 340B savings go? And when the answer is to corporate pharmacy giants – not patients – it’s time to reconsider ill-conceived policies giving contract pharmacies even more access to 340B drug discounts.

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About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit nclnet.org.

NCL urges Congress to improve air travel as FAA reauthorization progresses

February 15, 2024

Media contact: National Consumers League – Melody Merin, melodym@nclnet.org, 202-207-2831

Washington, DC – Last week, the U.S. Senate Commerce Committee advanced the five-year reauthorization of the Federal Aviation Administration (FAA). The legislation does contain some victories for consumers, but it does not contain the deep reforms of an uncompetitive industry that are sorely needed.

“Passengers are crying out to Congress to implement real reforms that make flying less miserable,” said NCL Vice President of Public Policy, Telecommunications, and Fraud John Breyault. “The Senate Commerce Committee could have used its twice-a-decade opportunity to swing for the fences on behalf of the flying public. Unfortunately, they settled for a bunt single.”

NCL, in coalition with other consumer and passenger rights organizations, has called for stronger safeguards to be included in the FAA reauthorization bill for years. Last February, NCL and eight other advocacy groups sent a letter to House and Senate Commerce Committee leaders urging support for a range of critical reforms to the airline industry. Key among those demands was a change to allow state attorneys general to enforce consumer protection laws against airlines, something that federal law currently prohibits them from doing. Thirty-seven bipartisan state attorneys general have also supported this reform, which both the House of Representatives and the Senate have so far ignored in their bills.

“Congress is running out of time to get this right,” said Breyault. “We strongly urge members of the Senate to make protecting the flying public a bigger priority as this bill moves to a floor vote.”

Several of the passenger rights coalition’s other priorities were included in the bill reported out of the Senate Commerce Committee. These reforms include a requirement that children be seated with their family and caregivers without additional fees, a requirement that air travel vouchers not expire before five years, standards for refunds in the event of a delay or cancellation, minimum customer service call center requirements, and creating an assistant Secretary of Aviation Consumer Protection.

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About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit nclnet.org.

NCL testifies before Senate, urges stronger protections against scams

February 1, 2024

Media contact: National Consumers League – Melody Merin, melodym@nclnet.org, 202-207-2831

Washington, DC – Highlighting the ongoing epidemic of fraud across the country, NCL Vice President of Public Policy, Telecommunications and Fraud John Breyault testified today before the Senate Committee on Banking, Housing, and Urban Affairs. Breyault advocated for stronger consumer protections alongside Carla Sanchez-Adams, a senior attorney at the National Consumer Law Center.

“When NCL last testified before this committee in 2021, we warned that peer-to-peer payment platforms such as Zelle, Venmo, Cash App, and PayPal had become ‘payment methods of choice for scammers.’ Unfortunately, the problem has only worsened since then,” Breyault told the committee. “No amount of consumer education, better disclosure, or ‘friction’ put into payment flows will solve this problem alone. The payment platforms where fraud occurs must have a bigger financial incentive to stop scams before they happen.”

The Federal Trade Commission, the primary federal agency for reporting fraud, continues to receive record numbers of complaints, with 5.4 million reports in 2022. Since the last time Vice President Breyault appeared before the Senate Banking Committee, median losses to scams nearly doubled, from $374 per incident to $650. The emergence of new and unregulated technologies, such as peer-to-peer payment apps and cryptocurrencies, has also facilitated staggering losses. Crypto-linked fraud losses exceeded $1 billion annually in 2022 and 2023.

“We are not winning the fight against fraud,” said Breyault. “We need Congress to Act.”

Breyault urged the Banking Committee to swiftly pass bills like the Protecting Consumers From Payment Scams Act and Senator Elizabeth Warrens (D-MA) Digital Asset Anti-Money Laundering Act of 2023 to crack down on scams targeting peer-to-peer payment apps and cryptocurrencies, respectively.

This was Breyault’s fourth time speaking before Congress on policy solutions to address the incessant scams targeting Americans daily. Breyault’s full written testimony can be found here.

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About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit nclnet.org.

NCL applauds competition regulators for centering consumers and workers in 2023 Merger Guidelines

December 19, 2023

Media contact: National Consumers League – Melody Merin, melodym@nclnet.org, 202-207-2831

This week, the Federal Trade Commission (FTC) and U.S. Department of Justice (DOJ) released their final merger guidelines, describing how the agencies will review mergers and acquisitions. The agencies improved upon existing guidelines by recentering marketplace competition and federal antitrust law, a break from previous enforcement regimes that allowed waves of consolidation to occur economy-wide with few repercussions.

“The 2023 Merger Guidelines mark a historic return toward these agencies’ original mandates—to protect the public from predatory corporations,” said National Consumers League Chief Executive Officer Sally Greenberg. “Decades of rubber-stamping harmful deals have allowed anti-consumer and anti-worker practices to run wild. NCL welcomes the updated guidelines and appreciates that the Commission and Department have signaled an intention to examine proposed deals holistically. Strong enforcement of our antitrust laws is key to combatting price gouging, privacy violations, wage suppression, and other noxious practices.”

NCL strongly supports the application of antitrust laws to protect consumers, workers, and our democracy. NCL’s comments to the DOJ and FTC on the 2023 Merger Guidelines can be found here.

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About the National Consumers League (NCL)

The National Consumers League, founded in 1899, is America’s pioneer consumer organization.  Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad.  For more information, visit nclnet.org.