NCL’s experiences with Initiative 77, DC’s repealed One Fair Wage attempt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

National Consumers League applauds the Department of Justice for bringing phone scam perpetrators to justice – National Consumers League

July 24, 2018

Media contact: National Consumers League – Carol McKay, carolm@nclnet.org, (412) 945-3242 or Taun Sterling, tauns@nclnet.org, (202) 207-2832

Washington, DC–The National Consumers League (NCL), America’s pioneering consumer and worker advocacy organization, today commended the U.S. Department of Justice (DOJ) for its crackdown on impersonation scams targeting vulnerable Americans. Last week, following their arrest in 2017, 24 perpetrators of a phone scam in which fraudsters extorted money from victims by impersonating IRS agents, or employees of the U.S. Citizenship and Immigration Services were sentenced to up to 20 years in prison. The following statement is attributable to James Perry, Customer Services Coordinator and John Breyault, Vice President, Public Policy, Telecommunications, and Fraud, both of the National Consumers League:

“Imposter scams consistently rank amongst the most prevalent scams reported to NCL’s Fraud.org campaign. Last year alone, Americans lost a whopping $327 million to scammers who were impersonating individuals or government agencies. With the DOJ’s announcement that they have ended a massive operation that extorted hundreds of millions of dollars from vulnerable consumers, Americans can feel a little bit safer from a threatening phone call from a scammer. While we applaud the DOJ for this hard-won victory, we must all continue working hard to both educate consumers about this scam and redouble our efforts to put other perpetrators of this scam behind bars.”

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About the National Consumers League

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 https://nclnet.org.

Imposters, information theft, and internet scams: the dangers of unregulated online pharmacies – National Consumers League

By NCL Food Policy and LifeSmarts Caleigh Bartash

With technology improving rapidly over the past few decades, online retailers have proved more convenient, reducing the market share of brick-and-mortar retailers. However, the convenience of purchasing prescription medication online or over the phone can inadvertently trap consumers in internet scams.Countless issues can arise from ordering prescription medication online. Unapproved internet dealers often evade government recognition or detection, failing to comply with drug safety regulations. Consumers can receive counterfeit, contaminated, or expired drugs. In some cases, these drugs may contain deadly opioids like fentanyl. Unauthorized medications can also have varying amounts of a medicine’s active ingredient — if they contain the correct ingredient at all.

Consumers may be attempting to access medications that they have previously been prescribed. However, they face security threats as soon as they give their personal details to an illegitimate pharmacy. These sellers have poor security protections, with leaks of sensitive customer information all too common. Illegitimate online sellers may even outright sell consumer data to scammers. Moreover, these websites can trick unsuspecting consumers into downloading viruses which further risk personal property and information.

Counterfeit drugs, unauthorized data sharing, and cyber attacks are dangerous, but now, a new threat has emerged involving counterfeit letters from the U.S. Food and Drug Administration.

Last week, the FDA released a press announcement alerting consumers to fraudulent warning letters claiming to be sent from the government. They advised that any consumer who received a warning message is likely the victim of a scam.

The July 2018 FDA press announcement is unique in that it is targeted directly to consumers. Commonly, these warning letters are used as a tool to inform the public about drug safety issues and are typically sent exclusively to manufacturers and companies creating products under their jurisdiction. FDA commissioner Dr. Scott Gottlieb summarized the FDA’s policy, stating “we generally don’t take action against individuals for purchasing a medicine online, though we regularly take action against the owners and operators of illegal websites.”

What’s next for those that received a warning letter? The FDA requests that potential victims contact them with information, including pictures and scanned documents if possible, in an effort to help them investigate the scams. Consumers can use the email address FDAInternetPharmacyTaskForce-CDER@fda.hhs.gov as the primary channel for communicating with the agency about suspicious warnings.

The best way to avoid falling victim to any scam involving illegal internet pharmacies is to abstain from suspicious websites. How do you distinguish fake internet pharmacies from safe ones? The FDA offers guidance with their BeSafeRx campaign. Asking a few simple questions at the doctor’s office or calling a certified pharmacist can help consumers protect themselves. Safe online pharmacies usually offer information including address, contact information, and state license. Consumers should be wary if the pharmacy does not require prescriptions to access pharmaceutical drugs. Other warning signs include international addresses, clear spam messages, and unreasonably low prices.

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Have more questions about fraud? NCL’s Fraud.org site has prevention tips, an outlet for consumer complaints, and an experienced fraud counselor to teach you how to avoid common scams. And for those wanting to learn more about proper medication consumption, our Script Your Future initiative has helpful advice and information so you can navigate your prescriptions with the utmost confidence.

D.C. City Council Angers Voters by Moving to Overturn Initiative 77 – National Consumers League

By NCL Public Policy intern Melissa Cuddington

After the passage of Initiative 77, seven members of D.C. City Council pledged to overturn the initiative, essentially suppressing the will of the voters. This move by the City Council has further outraged D.C. voters, who already feel disenfranchised. Considering the 80,000 DC voters who weighed in on this issue, its no wonder.

In the past few weeks, there has been controversy surrounding Initiative 77 and its hope of survival in D.C. City Council. Initiative 77, a worker-led campaign that passed by a 56% to 44% margin, would raise the minimum tipped wage by $1.50 a year until it reaches $15.00 by 2025. Currently, in the District of Columbia, the minimum tipped wage is a mere $3.33. Employers are allowed to pay tipped workers this small amount if tips make up the difference. Therefore, if tipped workers make at least $13.25 in tips, the current minimum wage, then employers are “off the hook” for covering the difference.

According to a recent article in The Washington Post, even those who voted against the initiative agreed that the City Council should not negate the will of the people. Those interviewed for the article responded with heated comments saying, “it enrages me,” and, “the City Council shouldn’t assume an electorate…doesn’t know what they are voting for.” These are not isolated responses; many voters have reached out to their City Council members, strongly protesting the possibility of repeal.

NCL supported the OFW campaign but regardless, it is not democratic or just for the City Council to overturn the decision of the voters. Many, including the leading group in this effort, Restaurant Opportunities Centers United (ROC United), have accused the City Council of voter suppression and stomping on democracy. 

NCL believes in Initiative 77 and shedding the distinction between a tipped and minimum wage. We also strongly believe that civic participation is the foundation of our democracy. If the City Council moves to overturn this measure, it will send a very negative message to voters about the importance of the democratic process and the value of their voice in it.