Trump’s fuel economy rollbacks: a loss for workers, consumers, the environment

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By NCL LifeSmarts intern Elaina Pevide

Cars are baked into American life – around 83 percent of households own one – so any change in the cost or availability of gasoline affects an enormous group of Americans.

Although most of us have grumbled about the cost of gas at some point—and memories of the Great Recession and its dramatic spikes in gas prices are enough to send shivers down the spine of many Americans—some Americans are affected more than others by increases. Did you know that low-income households spend twice as much of their income on gasoline as other Americans? For this group, fuel economy is an especially close-to-home issue.

The Obama Administration made significant headway in improving fuel economy standards and fostering American innovation when it announced the One National Program in 2010. That program unified the Environmental Protection Agency’s (EPA) greenhouse gas emission standards with the fuel economy standards set by the National Highway Traffic Safety Administration (NHTSA). This initiative set long-term goals for fuel efficiency aiming at Model Year 2025, when vehicular CO2 emissions were slated to be reduced by half. The One National Program was a win-win for consumers and the environment. Obama’s initiative would have made the American automotive industry a world leader in environmentally-friendly innovation while also giving the U.S. a huge advantage in a turbulent global economy adapting to the threat of climate change.

Perhaps the greatest benefactor of Obama’s One National Program was the average consumer. Doubling fuel economy means that consumers get twice the bang for their buck at the pump. These benefits would eventually help the less affluent the most, many of whom own used vehicles. Low-income secondhand car owners would pay little of the front-end cost of innovation, but would still save hundreds of dollars on gas on later model used cars.

During the last 7 months of the Obama Administration, EPA Administrator Gina McCarthy determined that, given the success of the program thus far, the program would maintain its initial goal of a 54.5 mpg fuel economy standard by 2025. Unfortunately, the Trump administration did not take long to backpedal on this dramatic win for consumers, workers, and the environment.

On March 15, 2017, then-EPA Administrator Scott Pruitt and Department of Transportation Secretary Elaine Chao reopened the evaluations. Two weeks later, they provided their disappointing and controversial results: the Trump EPA did not believe in the efficacy of the One National Program. By August, NHTSA and the EPA announced a new rule, called the Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule, the euphemistically-named rollback that handed the automotive industry a big win. The federal actions revoked the ability of California and 13 other states to enforce their own higher standards for environmentally-friendly vehicles.

The SAFE Vehicles Rule is misnamed. The Trump Administration is, in our view, mistaken in its assertions that the freeze and rollback of fuel economy standards will benefit anyone. An analysis by the Consumer Federation of America found that the program has already saved consumers $500 billion, with an extra $400 billion to be found in health, macroeconomic and environmental benefits. Trump’s plan will end these savings and cost the average American household $4,500. We know that fuel efficiency creates a healthy economy, environment, and, thus, a healthier society. Sadly, the current Administration has thrown that out the window.

Global warning and climate change are urgent problems. According to an article from Union of Concerned Scientists, cars and trucks account for nearly one-fifth of all U.S. emissions, emitting around 24 pounds of carbon dioxide and other global-warming gases for every gallon of gas. About five pounds comes from the extraction, production, and delivery of the fuel, while the great bulk of heat-trapping emissions–more than 19 pounds per gallon–comes right out of a car’s tailpipe.

Improving vehicular fuel efficiency is crucial to the future of the United States. High fuel economy standards reduce our need for foreign oil and encourage American companies to keep up with the green innovation around the world. As Europe, China, and other regions address global warming and reducing auto emissions, America is rolling back the clock. As a nation heavily reliant on cars for daily life, we call upon President Trump, his federal appointees, and the auto industry, to reverse these foolhardy decisions and demand improved fuel economy–to set us back on track towards the goals we were on course to meet just a few years ago.

Elaina Pevide is a student at Brandeis University where she majors in Public Policy and Psychology with a minor in Economics. She expects to graduate in May of 2020.

No more surprises: Congress and patients alike sick of surprise billing

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By NCL Health Policy intern Alexa Beeson

This July, the House Energy and Commerce’s Health Subcommittee passed the No Surprises Act (H.R. 3630) to protect patients from surprise billing. The Senate Health, Education, Labor and Pensions Committee also passed its companion to address surprise billing, the Lower Health Care Costs Act (S.1895). These bills were being considered after a press conference at which President Trump called for reform in surprise billing.

Stakeholder witnesses at the House hearing this June on H.R. 3630 included patient, provider, and insurance payer groups. Reimbursement models were discussed at length, but the unifying theme was that patients should be held harmless in surprise billing situations.

Surprise billing happens mostly in a small subsect of out-of-network providers; the patient has no idea about who’s in or out of network. Some professionals are out-of-network technicians subcontracted by an in-network facility, such as a last-minute anesthesiologist switch for a surgery, or any other non-disclosed provider. To get reimbursed for their services, providers send a bill to the patient for whatever wasn’t covered by the insurance company.  

Surprise billing also occurred among patients who should receive reduced prices for care. Johns Hopkins Hospital filed suit on more than 2,400 patients in the last decade, collecting the equivalent of 0.03 percent of its operating revenue. Some of these patients were never told about their right to charity care, and many who qualify never received a discounted rate. These bill collections are inconsequential for Johns Hopkins but could bankrupt a patient.

Legislation to address balance or surprise bills will protect patients, ensuring they will only have to pay in-network rates for out-of-network emergency care. This will help patients avoid bills that can set them back, sometimes, hundreds of thousands of dollars. Although surprise bills only come from a small portion of providers, 1 in 7 insured adults will receive a surprise medical bill from an in-network hospital. The Kaiser Family Foundation found that 70 percent of such patients were not aware that the provider was out-of-network when they received the care.

Panelist Sonji Wilkes, a patient advocate, presented testimony about her struggle with a surprise bill sent after the birth of her son, who was diagnosed with hemophilia. That child was treated by a charitable out-of-network hematologist who did not charge them for her services. However, the NICU that observed the boy was subcontracted to a third-party provider. This meant that the NICU was out-of-network. The Wilkes were sent a $50,000 bill by the hospital that still haunts them 15 years later.

Thomas Nickels, the executive vice president of the American Hospitals Association, claimed that fixed reimbursement rates, such as a median benchmark or percentage of the Medicaid reimbursement value, would disincentivize insurers from maintaining adequate provider networks. Nickels supported the Alternative Dispute Resolutions method, which involves baseball-style arbitration where providers and payers settle on reimbursement value on a case-by-case basis.

Jeanette Thornton, a senior vice president at America’s Health Insurance Plans, argued that the New York model of baseball-style arbitration would create immense clerical burden, resulting in lost time and greater administrative costs. She argued the arbitration reimbursement model would raise costs for patients in the end. Instead, she advocated for the government-dictated fixed reimbursement rates.

Both versions of the bill call for a benchmark to resolve payments between insurance plans and out-of-network providers. This benchmark says health plans would reimburse providers with the median in-network rate already contracted within specific geographic areas. The House bill contains binding arbitration as a fallback in case either the provider or payer decide the payment was an unfair price.

The National Consumers League supports Congress’ tackling of this issue of surprise or balance billing. NCL has taken no position on how these bills are settled between the payer and provider, as long as patients are protected from outrageously expensive bills they can never hope to pay and were never anticipating. In addition, medical debt is the greatest contributor to consumers declaring bankruptcy, and balance billing is a contributor to that troubling consumer issue. The bottom line is that a bill for medical services should never cause bankruptcy, and a patient should never have to choose between medical treatment and food or housing. We are hopeful this issue will be resolved during this Congressional session.

Alexa is a student at Washington University in St. Louis where she studies Classics and Anthropology and concentrates in global health and the environment. She expects to graduate in May of 2020

Finally, regulation where it’s needed: seven new bills with a focus on consumer safety

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By NCL Health Policy intern Alexa Beeson

This June, the House Energy and Commerce’s Consumer Protection and Commerce Subcommittee held a hearing in which they considered seven different bills concerning product safety. The hearing was motivated by a commitment to removing life-threatening products from the market, which–somehow–remain in circulation for purchase. Most notably, the bills address furniture tip-over (H.R. 2211), crib bumpers (H.R. 3170), inclined infant sleepers (H.R. 3172), and fire safety (H.R. 806).

The witnesses included Will Wallace, a manager at Consumer Reports; Crystal Ellis, a devastated mother and founder of Parents Against Tip-Overs; Chris Parsons, the president of Minnesota Professional Fire Fighters; and Charles A. Samuels, a member of Mintz, a law firm that represents manufacturers of some of the products implicated in various accidents.

Ellis was especially moving. She lost her son, Camden, five years ago on Father’s Day in a tip-over accident involving an unstable dresser. The day she testified would have been her son’s 7th birthday. Camden’s death and the deaths of many others in tip-over accidents catalyzed the founding of Parents Against Tip-Overs, which advocates for children who were victims of unsafe consumer products. Ellis recounted the devastating loss of her son and pleaded that the committee act to protect other children from suffering the same fate. Ellis urged the committee to evaluate the standards set forth by the Consumer Product Safety Commission (CPSC), which are not regulated enough to prevent tip-overs.

Furniture tip-over is a more widespread problem than you might realize. According to the CPSC, an estimated annual average (2014-2016) of 9,300 children ages 0-19 were treated in the emergency department for furniture tip-over injuries, not including televisions or appliances. If you include television and other appliances, which were not covered in the bills at the hearing, the number jumps to more than 15,000. From 2000-2016, furniture tip-overs killed 431 children.

These deaths could have been prevented by enforcing stricter safety regulations. The current CPSC regulations do not demand mandatory safety standards for tip-over prevention. The product manufacturing industries are only held to a voluntary standard. Additionally, products under 30 inches tall are exempt from any such safety regulations. However, as found by a Consumer Reports investigation, shorter furniture still causes major tip-over accidents.

The Stop Tip-overs of Unstable, Risky Dressers on Youth (STURDY) Act would seek to change these standards. The bill would require the CPSC to mandate manufacturers to produce more rigorous testing of their products; to perform more “real-world” testing and to revise consumer warning requirements, ensuring higher standards of product safety and transparency.

The National Consumers League thanks the Consumer Protection and Commerce Subcommittee for taking measures to hold industry accountable with regards to product safety standards. One positive message that everyone can take away from this hearing is that times are changing. Industry will be held accountable, and consumers will be protected. It looks like the time for the CPSC to take charge in handling consumer safety and protection–instead of letting industry set its own rules–is just around the corner, to paraphrase Rep. Frank Pallone (D-NJ).

Alexa is a student at Washington University in St. Louis where she studies Classics and Anthropology and concentrates in global health and the environment. She expects to graduate in May of 2020

The ‘tampon tax’: an unconstitutional loss to American consumers

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By NCL LifeSmarts intern Elaina Pevide

Bingo supplies in Missouri, tattoos in Georgia, cotton candy in Iowa, gun club membership in Wisconsin; what do these products and services have in common? They are all treated as tax-exempt by states that still put a tax on tampons.

Sales taxes on menstrual products, often referred to as “tampon taxes”, are still present in 35 states. Tampon taxes are cited as a major contributor to the “pink tax”, the heightened cost of products and services marketed toward women. For example, a purple can of sweet-smelling shaving cream for women will almost always cost more than its male counterpart across the aisle. This trend translates across industries. A 2015 study from the Joint Economic Committee found that women pay more 42 percent of the time for products from pink pens to dry cleaning. These pricier goods and services serve no benefit to the consumer and have no apparent improvement in function or quality. The pink tax cuts into women’s spending power and takes advantage of consumers simply on the basis of gender.

Tampon taxes and the pink tax have both been making waves recently as pressing feminist issues. While markups on products for women are unjust, activists are targeting the tampon tax as priority number one. Menstrual products, they argue, are necessities and states have the power to cut sales taxes on them by labeling them as such. States give tax exemptions to other items– like bingo supplies, tattoos, and cotton candy–that are far less vital to the health and success of consumers. Today, five states do not have sales taxes on any products, five states have always given hygiene products tax-exemption status, and five states have successfully fought to eliminate the tampon tax. Currently, 35 states remain with 32 having tried–and failed–to pass legislation on the matter.

States resistance to eliminate the tampon tax, typically for fiscal reasons, is at odds with the interests and demands of consumers. A survey of 2,000 women, conducted on behalf of menstrual cup company Intimina, found that three out of four women believe the tampon tax should be eradicated. Nearly 70 percent of those surveyed interpreted taxes on feminine products as a form of sexism.

Countless advocacy organizations have been established out of the need to provide consumers with affordable menstrual products and eliminate the tampon tax. One such group, Period Equity, recently launched a campaign with reproductive care company LOLA called “Tax Free. Period.”. Their campaign calls for the remaining 35 states with a tampon tax to eliminate it by Tax Day 2020. In the meantime, they’re gearing up for a legal battle to challenge the states that refuse to comply. Their argument? Taxes on a product that affect only women and other individuals who menstruate is a form of discrimination and thereby unconstitutional.

As reproductive rights groups await the response of state legislatures and federal courts on this issue, the half of Americans that use menstrual products in their lifetime are suffering. Women make less in wages than men but are forced to spend more. The tampon taxes expound gender inequality and costs American consumers millions of dollars each year–dollars that could benefit their families and stimulate the economy elsewhere. Period Equity’s tagline says it best: “Periods are not luxuries. Period.” It’s about time for American tax policy to reflect that reality.

Elaina Pevide is a student at Brandeis University where she majors in Public Policy and Psychology with a minor in Economics. She expects to graduate in May of 2020.

Raise the Wage Act 2019: House majority looking to lift millions out of poverty

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By NCL Health Policy intern Alexa Beeson

June 16 marked the longest period the United States has gone without an increase in the federal minimum wage. The federal wage floor was last raised a decade ago, in 2009. The current minimum wage is just $7.25 an hour, which is a poverty wage by federal standards, but tipped workers and people with disabilities often make even less. Worse yet, the value of this wage has decreased by 13 percent since its enactment due to inflation.

Many states have increased their minimum wages, including some red states like Arkansas and Missouri. These states have done so through the popular-vote referendum process. There is widespread support from all Americans–Democrats and Republicans alike–on this issue. In fact, 70 percent of Republican voters want a raised federal wage floor. There are still 21 states, however, whose workers receive only the bare minimum federal wage or, even worse, a tipped wage.

The U.S. House of Representatives, now led by a Democratic majority for the first time in many years, will be taking up the Raise the Wage Act (H.R. 582), and there is a companion bill by the same name in the Senate (S. 150).

The Raise the Wage Act will incrementally lift the federal wage floor to $15 an hour over the next five years. If enacted, the legislation would reduce levels of poverty across the nation without driving vulnerable populations into unemployment. It will also help decrease the wage gap between minimum and median wage workers. The House is expected to have a roll call vote on H.R. 582 before the August recess. If it does pass in the House, the act will have a hard time making it through the Republican-controlled Senate. However, this is still a progressive step in the right direction.

This act will also end subminimum wages for tipped employees. If employees make less than the $7.25 federal minimum wage, including tips, employers are supposed to add the rest to their paycheck. However, some employers fail to do so. The affected employees can make as little as $5 less than the minimum wage. The way the system works now, customer gratuities act as wage subsidies that we believe should be covered by the employer. For those concerned with whether raising the minimum wage will stop customers from tipping, studies show that eliminating the tiered wage system will not stop patrons from leaving tips.

Raise the Wage will end the subminimum wage for people with disabilities, some of whom make mere pennies an hour. Subminimum wages act as a form of legalized discrimination, and this bill will make it impossible for employers to get new special exemptions to pay their employee’s subminimum wages. It will also end current exemptions because all wages will be increased to $15 an hour in the next seven years.

Some fiscally conservative groups have claimed that raising the wage to $15 an hour would lead to high unemployment or business closures, with small businesses burdened by the extra costs. However, studies contradict those claims. Many show that raising the minimum wage would have little or no impact on employment. A study conducted by the University of California at Berkeley Institute for Research on Labor and Employment found that when the town of Berkeley raised the minimum wage, it actually saw a decrease in unemployment and a reduction in poverty. Further research showed that wage increases in 51 counties over 45 states had no adverse effect on employment hours or weeks worked.

NCL has been a long-standing advocate for fair minimum wages. In the early 1900s, the League’s General Secretary Florence Kelley ran a minimum wage campaign, which passed laws in 14 states. We are encouraged to see the House of Representatives taking affirmative steps to raise the federal minimum wage.

Alexa is a student at Washington University in St. Louis where she studies Classics and Anthropology and concentrates in global health and the environment. She expects to graduate in May of 2020.

Postal banking, an idea whose time has come… again 

Brian YoungToday’s banking system is failing middle-class Americans. Around 8.4 million U.S. households do not have a bank account, and nearly one in five households are underbanked. One of the biggest complaints low-income consumers have is that the overdraft fees and penalties charged by big banks whittle away the meager funds in their bank accounts. Unfortunately, the problem is not likely to improve as many banks, despite generating massive profits, are increasing their fees, closing branches, and laying off workers. Compounding the harms identified above, since 2008, 93 percent of branch closures have occurred in neighborhoods with a median income below the national average, which—unsurprisingly—only worsens socioeconomic inequality.

In order to fill the void, predatory payday and auto title lenders have popped up across the country. These lenders charge outrageous check-cashing fees and interest rates of nearly 400 percent on average. With these predatory rates, if a consumer takes out a $500 loan at 391 percent interest, they will owe $575 just two weeks later. With 400 percent interest rates, it is perhaps not surprising that the Consumer Financial Protection Bureau (CFPB) found that four out of five consumers who take out these loans either default or renew their payday loan within a year, costing them even more in interest and fees. The CFPB also found that by the time consumers escape these loans, one out of five new payday loans end up costing the borrower more than the amount they originally borrowed.

Fortunately, there is an alternative to trapping consumers into inescapable cycles of debt: postal banking. Postal banking is not a new idea. Many countries, including France and the United Kingdom, already provide access to affordable loans and other financial services via their postal service. The postal sector has been found to be the second-largest contributor to financial inclusion worldwide; only the banking industry has more financial customers. In fact, few know that from 1911 to 1967, the United States Postal Service (USPS) operated a robust Postal Savings System that once controlled more than $3.4 billion in assets.

Today, USPS no longer offers a savings program. That’s unfortunate, since 26.9 percent of American households are underserved by traditional banks, which means that their options are limited and that they are often forced into utilizing predatory financial services to cash their paychecks and make ends meet. Compounding the problem, many brick-and-mortar retail stores have embraced a new trend to refuse cash payments altogether. All of these developments underscore how having access to affordable and sustainable credit and digital payments is critically important.

The USPS is uniquely situated to provide relief to unbanked and underbanked Americas. Of its 30,000 locations, 59 percent are located in banking deserts, where there are either no banks or just one within an entire zip code.

Empowering Americans to participate in commerce is something the USPS could start doing tomorrow without any action by Congress. A 2014 Office of the Inspector report found that the USPS could, with current regulatory authority, offer a suite of financial products that would help underserved Americans collectively save billions of dollars a year from predatory fees, promote savings, and increase customer participation in e-commerce. It’s also a savvy business, in our view, for USPS to use its existing infrastructure to expand its current line of products and in so doing, boost its bottom line.

Indeed, a broad coalition of labor, public interest, and faith groups agree and are encouraging USPS to offer vital financial products that Americans need to climb the economic ladder. In the days and months ahead, NCL is looking forward to joining the postal banking movement and working to provide consumers with a public banking option.

Minimum wage gets a boost in state initiatives

Did you know that Arkansas will soon have the highest minimum wage in the United States at $9.25 an hour come January 2019? A quarter of the state’s workers will get a raise! Missouri isn’t far behind, with an initiative passing this fall as well.

As Congress and state legislatures remain in gridlock and unable to move progressive legislation, another very hopeful phenomenon is playing out through the initiative process, even in deep red states. Ballot initiatives are allowing citizens to directly support legislative reforms. As the Arkansas example shows, the greatest beneficiaries are those making minimum wages.

The federal minimum wage is stuck at a paltry $7.25;  for seven years, Congress has taken no action to change that. But 29 states, from Maine to Hawaii, and more than a dozen cities have increased their minimum wages. This translates into 60 percent of minimum wage workers making higher than the federal floor, adding $5 billion to the paychecks of 4.5 million low-wage workers.

Ten states are boosting their wage floors step by step, including California, Colorado, Hawaii, Maine, Michigan, New York, Rhode Island, and Washington. Automatic cost-of-living increases will kick in in eight other states: Alaska, Florida, Minnesota, Missouri, Montana, New Jersey, Ohio, and South Dakota.

But let’s give credit where credit is due. The “Fight for $15” movement launched a campaign in liberal areas, first winning at Seattle Tacoma Airport in November 2013 with a referendum for $15 an hour. Within two years, New York and California had adopted $15 an hour as their target. The only thing that is slowing this campaign is state legislatures. When Albuquerque, Chicago, Los Angeles, Providence, Kansas City, San Francisco, San Diego, and Santa Fe each adopted their own minimum wage laws, 18 state legislatures passed laws preempting cities from increasing minimum wages.

Even the liberal DC City Council overruled Initiative 77, which would have done away with tipped wages and ensured all workers in the District earn the minimum wage.

The takeaway here is that increasing the minimum wage turns out to be very popular when placed on the ballot by initiative, even in red states like Arkansas. But reactionary state legislatures, bowing to pressure from the business community, too often work to undo these laws.

We are also cheered by Amazon’s announcement that it will pay all its workforce a base $15 minimum wage and JPMorganChase will pay $18 as a base wage.

Things are looking up for hourly workers. Florence Kelley, NCL’s General Secretary for our first 33 years and drafter of the first minimum wage laws in the United States, is surely smiling down upon us!

Fraud on Venmo threatens consumer trust in the emerging P2P payments space – National Consumers League

Fraud in the peer-to-peer (P2P) money transfer space is an all-too-common occurrence and is growing by leaps and bounds. One of the biggest players in the P2P space is Venmo, which is owned by PayPal. Last quarter, the company reported $17 billion in transactions on Venmo, an increase of 78 percent over the same period last year.Unfortunately, wherever money is exchanged, fraudsters will try to find ways to lure consumers into faux deals and fake transactions, particularly when new and potentially unfamiliar technologies are used to make payments. At NCL’s Fraud.org, we hear from thousands of consumers who have either fallen victim to fraud or want advice about avoiding it.

Venmo is no exception to this rule. PayPal reported a spike in fraud on Venmo earlier this year, leading to wider-than-expected operating losses. As TheStreet.com reported this week, many PayPal investors are bullish on Venmo’s potential for monetization but were taken aback by reports that Venmo’s “transaction loss rate”, an internal metric that includes fraud-related losses, rose from 0.25 percent to 0.40 percent of overall Venmo volume between January and March. This was one of the factors that played a part in Venmo’s operating loss of $40 million during the first quarter, according to The Wall Street Journal. Why the spike in early 2018? That is hard to know.

To their credit, as loss patterns emerged, the Venmo team quickly “updated the new features to prevent losses and protect customers,” said Amanda Miller, a PayPal spokesperson. “With the new instant transfer feature, that meant suspending the new feature for a few days and then reintroducing it. Suspending that feature temporarily was the right thing to protect customers.” Venmo also raised fees from a small flat fee to a percentage-based fee.

We hope these changes will help but what have consumers lost in the process?  Scammers have been long abusing P2P services, including Venmo, with scams ranging from reversing payments for goods purchased to using stolen credit cards or hacked accounts to make Venmo transactions. 

But is that enough? And will consumers be left holding the bag when they get caught in fraudulent payment schemes? That’s a question that PayPal and Venmo must answer. It is widely expected that P2P payment systems like Venmo will continue to grow exponentially in the coming years. To maintain consumer trust, they must do all they can to protect consumers from the inevitable scams and frauds that will continue to pop up and harm consumers. If P2P companies like Venmo can’t get fraud under control on their own, it may soon be time for Congress to step in a consider requiring zero-liability regulations such as those that protect users of debit or credit cards.

NCL’s experiences with Initiative 77, DC’s repealed One Fair Wage attempt

Earlier this month, DC City council voted to repeal Initiative 77 in an 8-5 vote. The initiative, which was supported by DC residents by a 55-44% vote, would have eliminated the gap between the “tipped credit” and minimum wage for restaurant workers and ensure that all tipped workers get the minimum wage that other workers are entitled to.

As it stands, tipped workers in Washington DC get a base tipped wage of $3.89 per hour plus tips. If workers don’t get the minimum wage—which is currently $13.25 an hour in DC—employers are supposed to make up the difference. Initiative 77 was intended to shift the burden of ensuring wage equality from consumers to employers, where we believe it actually belongs.

National Consumers League took a personal interest in this issue because of our extensive history with raising the minimum wage over the decades. We testified before the DC City Council in support of Initiative 77 in what was a marathon hearing that started at 11 am and ended at 3 am. In our testimonies, we emphasized the extensive history of the minimum wage laws unfairly carving out tipped workers, while stressing the importance of ensuring that DC’s most vulnerable make an equitable wage. Our testimonies also included the personal experiences of a staff member that has worked in various front-of-house and back-of-house restaurant positions at businesses in Oregon, a one fair wage state, and Georgia, a non-one fair wage state.

Supporters of the Initiative were, by and large, people of color or professionals with extensive experience in labor law or wage policy. The most vocal opponents of the bill were restaurant employees or small restaurant owners in DC’s most affluent neighborhoods. Opponents followed what seemed to be scripted testimony, arguing that Initiative 77 was a bad bill because it came from “outside of DC” or that implementing it would be the first step of a “grand plan” to eliminate tipping.

In our view, the public hearing showed a clear bias for those opposed to Initiative 77. DC Council Chairman Phil Mendelson—an avowed opponent—led the hearing. Witnesses in favor of repeal were stacked onto the beginning of the hearing, while key supporters of Initiative 77 spoke much later—well after many of the councilmembers had left. Sadly, the council showed a lack of understanding about Initiative 77 and its potential impact on DC as a whole.

Opponents on the Council also expressed opposition to any type of compromise to Initiative 77. At no point during the hearing, did Chairman Mendelson or Councilmember Jack Evans—also an avowed opponent—suggest that they were open to a compromise or that they were willing to meet with groups to address concerns about the plight of tipped workers in DC. Mendelson went so far as to attack one witness from the Restaurant Opportunities Center’s DC office (ROC-DC) when he called the woman back on the stand and suggested she was a plant used by ROC to gather support for the bill. Despite this, ROC-DC and other advocates appeared more than reasonable, suggesting potential compromises; offering an extended timeline for wage increases, tax cuts, and others. Many of the council members that voted for the repeal—most notably Councilmembers Jack Evans (Ward 2), Phil Mendelson (Chairman), Kenyan McDuffie (Ward 5), and Anita Bonds (At-Large)—kept saying that 77 used deceptive language to sway voters. “The language in [Initiative 77] was misleading at best, dishonest at worst,” said Mendelson shortly before the October vote. Why? He didn’t say.

Yet the campaign slogan for those opposed to 77 was “Save Our Tips” despite there being no restriction of the tipping practice in the Initiative 77 bill. We believe that voters were not duped and that the bill passed in every ward, besides Ward 3, because DC’s residents wanted to better the lives of tipped workers. As Councilmember Robert White Jr. said in the public hearing, “[we] cannot assume that voters were ignorant after a campaign of fierce campaigning on both sides.”

Nevertheless, the DC Council voted in favor of repealing the bill. In spite of the sensible wage protection policy offered, the repeal of a measure that reflected the will of the people in the District Of Columbia, which is exactly what 77 was. Initiative 77 is another example of hardworking employees losing to big money—the National Restaurant Association spent millions to defeat 77 and when they lost that battle, persuaded the DC Council to overturn it—and ultimately being ignored. Voters showed up and overwhelmingly voted in favor of Initiative 77, yet the council responded by telling voters that their vote doesn’t matter and their voice is not important. What a sad day for democracy in our nation’s capital.

Thank you to the  DC City Council members that respected the votes of DC residents and supported the remedying of wage inequality by voting for Initiative 77.

Charles Allen (Ward 6)

Mary M. Cheh (Ward 3)

Brianne K. Nadeau (Ward 1)

Elissa Silverman (At-Large)

Robert White, Jr. (At-Large)

‘Innovation’ = airline speak for finding new ways to gouge consumers

Brian YoungIf you have been listening to the airline industry, you may think that now is one of the best times to fly. According to its lobbyists, fares are down, and the airlines are working overtime to provide their customers with new and innovative products. However, in reality, if you have spent any time shopping around for a ticket, you are probably intimately aware that all of this “innovation” serves one purpose: to stifle what little competition remains in the airline marketplace and to implement new and creative ways to gouge consumers.

The Government Accountability Office, along with several independent researchers, have found that the proliferation of airline fees have allowed airlines to deceptively appear to be lowering fares while, in fact, they are quietly raising the real cost of travel. This nickel and diming allows airlines to rake in revenue–to the tune of $57 billion dollars a year–in so-called “ancillary fees,” in turn allowing the airlines to bring in record profits. In 2018, the industry is estimated to see a $38.4 billion profit margin.

Airline fees also serve another disturbing purpose: they stifle competition and prevent the free market from functioning properly by undermining the ability of consumers to comparison shop. Most of us are aware of the different fees airlines are now charging for carry-on bags, change fees, and even necessities like water. These fees can greatly complicate the comparison shopping process. The fee Delta charges for carry-on bags could be very different than the fee United charges; in this environment, expecting consumers to calculate the real costs based on fees and add-ons in order to compare real prices is absurd.

Airlines are now flexing their creative muscles to develop new fees that vary depending on the day of the week! Lufthansa, for instance, now has a fee that’s based on fluctuating ticket prices, exchange rates, “market-specific conditions,” and special offers. Similarly, Virgin Atlantic has a fare of $93 for one of its routes, but the airline tacks on carrier-imposed surcharges of $320 and government taxes of $225, which increase the ultimate price of the ticket more than 5-fold.

Unsurprisingly the ever-growing list of varying fees has made it difficult for consumers to comparison shop. Staying updated on the new fees airlines have tacked on can become a full-time job. While some online travel agents and meta-search sites do their best to inform users of the new list of fees, (Google Flights for instance, now allows you to search for flights that include carry-on bag fees in the price of the ticket and will soon add an option to search for flight prices that include checked bags) by and large, the burden of determining what fees one is liable for is carried by the consumer.

In addition to just making comparison shopping complicated, many airlines such as Delta and Southwest also take another approach: prohibiting websites from displaying their fares alongside competitors’ completely. Southwest Airlines has long taken this approach, forcing consumers to go directly to its website to determine the price of a flight.

The industry’s refusal to share fare and schedule data has had a measurable detrimental impact on airline passengers. One industry study found that this practice could cost passengers upwards of $6 billion dollars per year (or $30 per ticket). Even more concerningly, the same study found that if this practice continues, more than 40 million Americans could refrain from flying due to sticker shock.

Fortunately, in 2016 Department of Transportation Secretary Anthony Foxx began investigating whether consumers are harmed when airlines restrict their schedule and fare information. However, once the Trump Administration took over the DOT (the relevant cop on the beat for this type of deceptive practice), the agency suspended the investigation, saying that forcing airlines to allow comparison shopping was not needed.

As this administration has signaled a lack of interest in transparent markets, Congress must now act to ensure that competition can once again thrive in the air travel marketplace. At the National Consumers League, we have long believed that an informed consumer is an empowered consumer and that in order for markets to function properly, consumers must be able to comparison shop. If airlines hide behind wildly fluctuating fees and conceal their fare and schedule information from consumers and online travel sites, consumers cannot make informed purchases. It is for this reason than NCL will continue to advocate for transparency in the airline marketplace, both in our advocacy to do away with arbitrary fees, as well as in our work to make sure that passengers can continue to shop around for the best price.