Making Labor Pay

From Dollars and Sense: http://www.dollarsandsense.org/archives/2012/0912sciacchitano.html

Recent battles in Wisconsin and San Jose show why we need universal pensions.

By Katherine Sciacchitano

This article is from the September/October 2012 issue of Dollars & Sense magazine.

The political economy of the recovery is making the United States even more unequal than it was during the bubble years. Incomes fell across the board during the crisis: median family income is 6.3% below what it was in 2001. But the top 1% garnered 93% of income growth in the first year of recovery. Housing, still the main source of wealth for middle-income families, remains depressed while stocks are close to pre-crash highs. Moreover, the drive for more tax cuts for the wealthy continues. And policy initiatives to cut Social Security, Medicare, and Medicaid would weaken the safety net even as it is most needed.

A spate of attacks on state and local public-sector pensions now threatens to make inequality even more entrenched and painful, and to undermine both short- and long-term economic growth.

The power of labor is dead center in this agenda. Despite a long-term decline in workers covered by union contracts, unions have over 16 million members: they are still the social force most capable of combating the assault on workers’ incomes and militating for greater equality. Crippling their political power therefore remains both a tactical and a strategic objective on the right. With only 6.9% of workers in the private sector covered by union contracts, versus 37% in the public sector, public-sector unions are bearing the brunt of the attacks. And public pensions are the battering ram.

Attacking Unions, Eroding Pensions

The trip wire for the assault on pensions was the combined fall in state and local revenues from the bursting of the housing bubble, and the steep losses suffered by pension funds during the resulting stock market slide of 2007-2009: by 2010 there were widely acknowledged public pension funding shortfalls totaling nearly $800 billion

While pension funds are slowly making back market losses, conservative advocates like Andrew Biggs at the American Enterprise Institute are arguing for new measures of shortfalls that would bring them to over $4 trillion, and using this $4 trillion figure to call for a national movement to slash both public-sector pensions and union rights. The implicit threat is that taxpayers will have to pay these trillions now and into the future, even though they themselves may not have pensions. The stated policy objective is to convince taxpayers and politicians that defined benefit pensions are too expensive in the public sector and should be replaced with defined contribution plans.

Defined benefit pensions are a form of deferred compensation—pay for work performed; they provide guaranteed lifetime payments in retirement. Defined-contribution plans give workers tax breaks for individual savings; workers invest these savings and then pray they don’t run out. Over the past three decades, defined benefit pensions have been nearly eradicated in the private sector for non-union workers; their abandonment in the public sector would effectively end defined benefit pensions as a norm for retirement security and shift the burden of retirement savings almost entirely to individuals.

Continue reading at:  http://www.dollarsandsense.org/archives/2012/0912sciacchitano.html

Posted in Class War, Corporate Abuse, Economic Issues, Employment, Hard Times, Human Rights. Comments Off on Making Labor Pay

Meet Romney’s Economic Hit Man

From Truth Dig:  http://www.truthdig.com/report/item/meet_romneys_economic_hit_man_20121018/

By Robert Scheer
on Oct 18, 2012

Mark the name of R. Glenn Hubbard, the man who will make your life miserable if Mitt Romney is elected president. Unless, that is, you happen to be one of the swindlers who has profited mightily from the nation’s economic pain.

Hubbard is the ideological hit man instrumental in justifying the mortgage derivatives bubble that caused the Great Recession during the George W. Bush years. He now serves as Romney’s key economic adviser and is the front-runner to be the next Treasury secretary should the Republican win.

“Romney’s Go-To Economist” read the headline on a New York Times profile of the dean of Columbia University’s Business School, which notes that “During a stint as chairman of the Council of Economic Advisers for President George W. Bush, from 2001 to 2003, Mr. Hubbard was known as the principal architect of the Bush tax cuts.” In that capacity, and after returning to Columbia, Hubbard was also the chief cheerleader for a runaway derivatives market that spiraled out of control and left the Great Recession in its wake.

While pocketing millions in fees from the financial industry that he was ostensibly studying as a neutral academic, Hubbard was an enthusiastic backer of the virtues of a burgeoning unregulated capital market that sold toxic derivatives to the world. In a landmark paper that he co-wrote in November 2004 with William C. Dudley, at the time the chief U.S. economist at Goldman Sachs, it was asserted, “The capital markets have helped facilitate a major transformation of the U.S. mortgage financing system over the past 25 years. … The result has been a dramatic decline in the cyclical volatility of housing activity.”

Their study was published by the Global Markets Institute of Goldman Sachs at the very time that Goldman, a leader in the capital market, was packaging and selling some of the toxic mortgage-based derivatives that would come close to destroying the world’s economy.

Continue reading at:  http://www.truthdig.com/report/item/meet_romneys_economic_hit_man_20121018/

Posted in Class War, Economic Issues, Hard Times, Right Wing Extermist. Comments Off on Meet Romney’s Economic Hit Man

This Is What Tyranny Looks Like

From Common Dreams:  http://www.commondreams.org/view/2012/05/23-4

by Carl Gibson
Published on Wednesday, May 23, 2012 by Common Dreams

Remember when police beat Tea Party activists with batons, raided homes without warrants, unjustly arrested and strip-searched Tea Party protesters, or attacked and intimidated journalists covering Tea Party rallies?

Me neither. But then again, the Tea Party took to the streets in favor of higher profits and less regulations for the richest 1 percent, whose ranks they hope to but will never join. The media is more than happy to inflate their crowd estimates, and police are more than happy to let pro-status quo protests take to the streets undisturbed. The Tea Party has since phased out street protests to take over a major political party and make it bend to their every radical whim.

While it hasn’t yet taken over a major party, the Occupy movement has successfully exposed the oppressive fascist police state that has reared its ugly head in the past year. If you want to see what tyranny looks like, consider what happened to the estimated 75,000 protesters who took on the military-industrial complex at last weekend’s NATO summit in Chicago, after the mayor revoked protesters’ attempts to lawfully assemble.

-A night before protests even begun, the Chicago Police Department raided an activist’s home and arrested several on unproven allegations of terrorist activity, all without a valid warrant.

-At the front of a police line surrounding a NATO gathering, police suddenly start beating unarmed protesters with batons in an eerie video resembling police at Egypt’s Tahrir Square.

-While covering the protests, credentialed journalists are attacked by police who use bicycles as weapons.

Continue reading at:  http://www.commondreams.org/view/2012/05/23-4

Posted in Civil Rights, Class War, Constitutional Rights, Fascism, Globalization, Hard Times, Police Abuse, Police State. Comments Off on This Is What Tyranny Looks Like

Global Protests Against Draconian Education Cuts, Tuition Hikes

From The Nation:  http://www.thenation.com/blog/168049/global-protests-against-draconian-education-cuts-tuition-hikes

Allison Kilkenny
on May 24, 2012

Austerity protests have become part of the new global landscape, a reality underscored by a wave of recent protests in Philadelphia and Quebec.

More than 1,000 people rallied Wednesday to protest the Philadelphia District’s plans to “transform schools,” a pleasant euphemism generally meaning school closures and mass layoffs. The Philly district plans to possibly lay off 2,700 blue-collar workers, including every member of SEIU B2BJ Local 1201, the city school union representing bus assistants, cleaners, mechanics and other workers.

Philly.com reports that all these workers have received pink slips and could be let go by the end of the year.

Eleven men and three women were arrested during Wednesday’s protest, including B2BJ president George Ricchezza, union health and welfare administrator Dennis Biondo and retired teachers Lisa Haver and Ronald Whitehorne, among others. They were later released and are to be arraigned in June.

The individuals were arrested for “clogging traffic,” according to a local CBS affiliate.

Earlier in the month, the school system announced that it expects to close forty public schools next year and sixty-four by 2017, shocking figures that received little national attention, prompting Black Agenda Report’s Bruce A. Dixon to publish an article titled, “Why Isn’t Closing 40 Philadelphia Public Schools National News?

Continue reading at:  http://www.thenation.com/blog/168049/global-protests-against-draconian-education-cuts-tuition-hikes

Posted in Class War, Education, Environment, Equal Treatment, Globalization, Hard Times. Comments Off on Global Protests Against Draconian Education Cuts, Tuition Hikes

Did slaves catch your seafood?

From Salon:   http://www.salon.com/2012/05/21/did_slaves_catch_your_seafood/singleton/

Thailand, a major source of fish imported to the US, depends on forced labor for its product

By , GlobalPost
Monday, May 21, 2012

This article originally appeared on GlobalPost.

PREY VENG, Cambodia, and SAMUT SAKHON, Thailand — In the sun-baked flatlands of Cambodia, where dust stings the eyes and chokes the pores, there is a tiny clapboard house on cement stilts. It is home to three generations of runaway slaves.

The man of the house, Sokha, recently returned after nearly two years in captivity. His home is just as he left it: barren with a few dirty pillows passing for furniture. Slivers of daylight glow through cracks in the walls. The family’s most valuable possession, a sow, waddles and snorts beneath the elevated floorboards.

Before his December escape, Sokha (a pseudonym) was the property of a deep-sea trawler captain. The 39-year-old Cambodian, his teenage son and two young nephews were purchased for roughly $650, he said, each through brokers promising under-the-table jobs in a fish cannery.

There was no cannery. They were instead smuggled to a pier in neighboring Thailand, where they were shoved aboard a wooden vessel that motored into a lawless sea. His uncle had fallen for the same scam five years prior and escaped to warn the others. But Sokha told his son, then just 16, that this venture would turn out differently. He was wrong.

“We worked constantly, for no pay, through seasickness and vomiting, sometimes for two or three days straight,” he said. “We obeyed the captain’s every word.”

Continue reading at:  http://www.salon.com/2012/05/21/did_slaves_catch_your_seafood/singleton/

Posted in Abuse, Class War, Fascism, Globalization, Hard Times, Human Rights, Nazism, Slavery, Workers. Comments Off on Did slaves catch your seafood?

Greeks fearing collapse of eurozone bailout pulled record sums from bank

From The Guardian UK: http://www.guardian.co.uk/business/2011/dec/16/greeks-fearing-collapse-of-eurozone-bailout-pulled-record-sums-from-bank

Bank of Greece reveals that investors fearful of political instability and economic collapse pulled €12.3bn from local banks as Papandreou referendum threatened debt deal

in Athens
guardian.co.uk
, Friday 16 December 2011

An unprecedented exodus of capital from Greece – peaking in a record number of withdrawals from banks in recent months – has exacerbated the liquidity crisis now wracking the recession-hit country.

The latest figures released by the Bank of Greece reveal that in September and October alone investors pulled €12.3bn (£10.3bn) from domestic banks, spurred by fears of political uncertainty and economic collapse.

Overall, outflows have reached a record 25% since September 2009 – when household and corporate deposits stood at a peak of €237.5bn, the data showed.

Theodore Pelagidis, an economics professor at the University of Piraeus, said: “This is part of the death spiral of the recession as a result of austerity measures. People realise that contagion has come to banks and they are very afraid of losing their deposits. On average around €4bn-€5bn in capital flees the banking system every month.”

The extraordinary figures back up anecdotal evidence that it is not just the super-rich behind the flight of funds.

Over the past year, as the eurozone debt crisis has intensified in the nation where it largely began, there have been countless cases of ordinary depositors hauling suitcases stuffed with cash to the safer destinations of Cyprus, London and Switzerland.

Continue reading at:   http://www.guardian.co.uk/business/2011/dec/16/greeks-fearing-collapse-of-eurozone-bailout-pulled-record-sums-from-bank

Posted in Anti-Globalization, Class War, Corporate Abuse, Depression, Globalization, Hard Times, Uncategorized. Tags: , , . Comments Off on Greeks fearing collapse of eurozone bailout pulled record sums from bank

How Credit Collectors Have Reinvented the Debtors’ Prison

From New Deal 2.0:  http://www.newdeal20.org/2011/12/14/how-credit-collectors-have-reinvented-the-debtors-prison-67301/

by Mike Konczal
Wednesday, 12/14/2011

ew tactics have an old ring to them and low-income debtors are falling prey.

NPR just ran a story called “Unpaid Bills Land Some Debtors Behind Bars.” As they report, ”Here’s how it happens: A company will often sell off its debt to a collection agency, generally called a creditor. That creditor files a lawsuit against the debtor requiring a court appearance. A notice to appear in court is supposed to be given to the debtor. If they fail to show up, a warrant is issued for their arrest.” Marie Diamond has more.

This is increasingly common across the country. My colleagues Matt Stoller and Bryce Covert have both written about debtors being jailed for failure to appear in court. Debtors’ prisons are illegal, and some point out that this is really jail for a summons problem, not a payment. But I haven’t had a full vision of the practice until I read this excellent working paper by Lea Shepherd of Loyola Chicago law school, “Creditors Contempt” (h/t creditslips). Beyond laying out the problems with the current system, which gives a disproportionate amount of the coercive powers of the state to creditors, this paper also has implications for another topic I’m interested in — the class bias of the submerged state.

The key here is something called in personam debt collection remedies. In an agrarian economy, it was relatively straight forward for creditors to order a sheriff to seize the property of a debtor. In rem actions, where a sheriff would go and seize property, would work just fine. But this became harder to do as time went on.

The debt collection market evolved in personam debt collection remedies. This in personam action has two goals: discovery and collection. The court orders the debtor to disclose information about his property, location of his assets, etc. to help creditors track down those assets. Then the court orders certain payments to be made, which allows for collection. This court order is enforced through the court’s authority to hold debtors in contempt, which in turn is enforced through threats of imprisonment. Depending on the jurisdiction, contempt charges can be made against either the failure to show up for the discovery process or the failure to stick to the collection ordered.

Continue reading at:   http://www.newdeal20.org/2011/12/14/how-credit-collectors-have-reinvented-the-debtors-prison-67301/

Illinois Debtors Thrown In Jail: Lisa Madigan Working To Stop Debt Collector Arrest Warrants

From Huffington Post:  http://www.huffingtonpost.com/2011/12/12/illinois-debtors-thrown-i_n_1144093.html

First Posted: 12/12/11

Some Illinois residents struggling to pay off their debt have yet another thing to worry about: getting thrown in jail.

As WBEZ reports, creditors in the state have figured out ways around laws that prevent them from putting debtors in jail, and the number of people being issued arrest warrants linked to unpaid bills is growing. Collection agencies can reportedly file a lawsuit requiring a court appearance, and if the defendant doesn’t show up for their hearing, an arrest warrant can be issued.

The practice has been happening more often in a stagnant economy, and Illinois Attorney General Lisa Madigan wants to do something about it.

“We can no longer allow debt collectors to pervert the courts,” Madigan told the Wall Street Journal, adding that some victims of this practice were thrown in jail without knowing that they were being sued due to misleading or sloppy paperwork submitted to the court by debt collectors.

NPR spoke to one Illinois woman who was shocked to learn that a warrant was out for her arrest:

Continue reading at:   http://www.huffingtonpost.com/2011/12/12/illinois-debtors-thrown-i_n_1144093.html

Posted in Austerity, Civil Rights, Class War, Constitutional Rights, Corporate Abuse, Economic Issues, Fascism, Hard Times. Comments Off on Illinois Debtors Thrown In Jail: Lisa Madigan Working To Stop Debt Collector Arrest Warrants

Home Sweet Home: The New American Localism

From NPR: http://www.npr.org/2011/12/13/143538472/home-sweet-home-the-new-american-localism?sc=fb&cc=f

by
December 13, 2011

You can talk about the global village, a mobile society and the World Wide Web all you want, but many in our country seem to be turning toward a New American Localism.

These days, we are local folks and our focus is local. We are doing everything locally: food, finance, news, charity. And maybe for good reasons.

“One bedrock thing that is going on,” says Brad Edmondson, founder of ePodunk and former editor of American Demographics magazine, is that “because of aging and the recession, people aren’t moving around as much.”

The U.S. Census Bureau backs him up with a news release — based on a recent report — titled “Mover Rate Reaches Record Low.” The bureau found that only 11.6 percent of Americans changed their living spaces between 2010 and 2011. That is the lowest rate on record since the Current Population Survey of the United States began tracking geographical mobility in 1948. In 1985, for instance, the changed-residence rate was 20.2 percent.

“With homeowner mobility at an all-time low, more people are putting down roots and getting to know their neighbors,” Edmondson says. “At the same time a lot of households have seen sharp declines in discretionary income. They are looking for ways to relax that don’t cost as much, and they are substituting cooperation for cash.”

The new version of the popular bumper sticker “Support Your Local Sheriff” could become “Support Your Local Everything.”

Continue reading at:   http://www.npr.org/2011/12/13/143538472/home-sweet-home-the-new-american-localism?sc=fb&cc=f

Posted in Anti-Globalization, Food, Hard Times, Labor. Tags: . Comments Off on Home Sweet Home: The New American Localism

Bank Of America Makes Millions Charging Fees To Withdraw Unemployment Benefits

From Think Progress:  http://thinkprogress.org/economy/2011/11/14/367467/bank-of-america-unemployment-benefit-fees/

By Marie Diamond
Nov 14, 2011

Late last month, a national backlash forced Bank of America to abandon its plan to charge customers $5 a month to use their debit cards. But Huffington Post reportsthat the corporation has quietly been mining other sources of fees, preying on its most vulnerable customers to rake in millions in revenue:

Shawana Busby does not seem like the sort of customer who would be at the center of a major bank’s business plan. Out of work for much of the last three years, she depends upon a $264-a-week unemployment check from the state of South Carolina. But the state has contracted with Bank of America to administer its unemployment benefits, and Busby has frequently found herself incurring bank fees to get her money.

To withdraw her benefits, Busby, 33, uses a Bank of America prepaid debit card on which the state deposits her funds…Busby visits the ATMs in her area and begrudgingly accepts the fees, which reach as high as five dollars per transaction. She estimates that she has paid at least $350 in fees to tap her unemployment benefits. […]

In short, the same banks whose speculation delivered a financial crisis that has destroyed millions of jobs have figured out how to turn widespread unemployment into a profit center: The larger the number of people who are out of work and dependent upon the state for sustenance, the greater the potential gains through administering their benefits.

Continue reading at:  http://thinkprogress.org/economy/2011/11/14/367467/bank-of-america-unemployment-benefit-fees/

Posted in Class War, Discrimination, Economic Issues, Hard Times. Comments Off on Bank Of America Makes Millions Charging Fees To Withdraw Unemployment Benefits

Senator warns of layaway’s cost

I am never surprised by how low the rich and their corporations will go in exploiting the poor.

First credit cards with usurious interest rates, pay day loans, rent to own stores that sucker people in by offering a low price and then doubling the actual price with the fine print, interest and carrying charges.

Here’s a revolutionary proposition for this years annual orgy of ritualized gift giving.  Boycott the chain stores, the big box stores. Regift.  Give the gift of time or actual money.  Buy something made in the USA from an independent merchant.  Buy something used or hand made. Shop at flea markets and antique stores.

Or ask family and friends to contribute to a cause in your name.

Fuck the chain stores and the corporate masters.

Just say no to Xmas shopping.

From Yahoo News:  http://news.yahoo.com/apnewsbreak-senator-warns-layaways-cost-131026072.html

By MICHAEL GORMLEY – Associated Press
November 14, 2011

ALBANY, N.Y. (AP) — The return of layaway plans this holiday shopping season is raising concern that the break from credit cards might actually cost consumers far more.

For example, a rock ‘n’ roll Elmo doll that requires a $5 layaway fee and a 10 percent down payment for a month can equal a credit card that charged more than 100 percent interest, U.S. Sen. Charles Schumer said Sunday.

Schumer is asking major retail associations to direct their members to more clearly present their layaway fees to customers. The Democrat says the ultimate cost of a layaway with a $5 fee can equal 40 percent interest over a month or two for many common purchases compared to the annual rates of most credit cards.

He said if stores don’t better present the cost of layaway purchases, he will ask the Federal Trade Commission to determine whether the increasing use of layaway is a deceptive or misleading business practice. Historically, stores started dropping layaway plans in the 1990s in part because of these costs and inconveniences.

But it’s wrong to compare layaway fees to credit cards and the fees are already clear, a major retail association says.

“It is a leap to suggest that $5 on a $100 purchase is twice the going rate on credit cards, which today averages 14.99 percent nationwide,” said Brian A. Dodge of the Retail Industry Leaders Association.

Continue reading at:  http://news.yahoo.com/apnewsbreak-senator-warns-layaways-cost-131026072.html

Posted in Class War, Discrimination, Economic Issues, Hard Times. Comments Off on Senator warns of layaway’s cost

Fox News bullies organized labor in run-up to Labor Day

From Media Matters for America

http://mediamatters.org/research/201009030041

Fox News figures have attacked labor unions in the days leading up to Labor Day, a national holiday originally created to honor the victories of the labor movement and the achievements of American workers.

Fox News figures assail organized labor

Beck: “I think the unions are like Biff,” the bully from Back to the Future. During the September 2 edition of his Fox News show, Glenn Beck said, “You know what I think of some of the unions? I actually think of Back to the Future. I think the unions are like Biff.” Beck showed a clip featuring Biff Tannen, the bully in the film, and added, “But in the end, once you really realize who they are and you’re not afraid anymore, it always turns out exactly the same way for the bully every time.” Beck then showed a clip of Biff working for the man he originally bullied.

Malkin accused unions of embezzlement, violence, and corruption. During the September 2 edition of Fox News’ America Live, Fox News contributor Michelle Malkin accused labor leaders of “embezzlement,” “violence,” and “corruption.”

Varney: There will be “[t]wo more union outrage stories to bring to you in our next half-hour.” During the September 2 edition of Fox Business Network’s Varney & Co., guest Joseph Caruso criticized a Securities and Exchange Commission rule that would allow more shareholders of public companies to use proxy votes to nominate board members. Caruso claimed that unions would use the rule to “wreak havoc” by nominating labor-friendly board members. In response, Fox Business’ Charles Payne suggested, “So, this will be used more as a tool of intimidation than anything else.” In a subsequent tease, Varney said, “Two more union outrage stories to bring to you in our next half-hour.”

Cavuto likened unions to Hurricane Earl on a “collision course on our towns.” During the September 2 edition of Fox News’ Your World, host Neil Cavuto compared unions to Hurricane Earl, saying, “The monster and the mess. Your World on top of Earl’s collision course with our coast and what could be unions’ collision course with our towns.” Cavuto added: “And get ready for Earl’s wallop and, to hear some state and local governments tell it, unions’ direct hit on their wallet.”

Carlson: How much of the cost of a Chevy Volt is “because you have to pay the unions so much money?” During a discussion of the Chevy Volt on the September 2 edition of Fox & Friends, co-host Gretchen Carlson asked, “How much of that money … is because you have to pay the unions so much money?”

Beck: Labor hero is “indoctrinating children.” During the September 1 edition of his Fox News show, Beck accused Dolores Huerta, an 80-year-old labor activist who co-founded the United Farm Workers with César Chávez, of “indoctrinating our children” because she spoke at a high school. Beck also criticized the Labor Department for spending money on what he called a “catchy tune” that included Labor Secretary Hilda Solis saying, “You work hard, and you have the right to be paid fairly,” and, “[I]t is a serious problem when workers in this country are not being paid every cent they earn.”

Labor Day honors the progress of the labor movement

DOL: Labor Day is “a creation of the labor movement and is dedicated to the social and economic achievements of American workers.” According to the U.S. Department of Labor’s “History of Labor Day,” Labor Day “is a creation of the labor movement and is dedicated to the social and economic achievements of American workers. It constitutes a yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country.”

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Posted in Class War, Discrimination, Economic Issues, Employment, Hard Times, Labor, Unions. Comments Off on Fox News bullies organized labor in run-up to Labor Day

New Feature: Survival Hints

I wear whole lots of different hats which is one major reason I feel extremely constrained by identity politics.  None of the neat identity packages really fit.

Over my life time I’ve picked up whole bunches of skills from cooking and sewing to page layout and computer construction.

Many people whose lives have been impacted by trans-prefixed words are facing hard times economically.  Un-employment and under-employment particularly if one is older or not so passable are  real facts of life.

Identity be damned though… It isn’t just being trans ******… Many other formerly middle class people are facing the same problems thanks to Extremist Capitalism and the Free Market waging class war on the working classes.

Hence… The new column “Survival Hints”…  I want this to be a co-operative effort…  Especially on the part of people outside the US.  There is an e-mail address for this blog suzan.wbt@gmail.com I’ll run articles submitted by others that address this topic.  Some suggested topics might include negotiating Name Changes, free or low cost medical care etc. Others could include tips on turning various skills into income producing endeavors that do not require conforming to some sort of corporate standards.

If you have a blog and have posted articles on these themes this is an opportunity for links and a link back to your blog or website.

Today I am featuring an article I found on Alternet.  It particularly hit home as I have spent a great deal of money on glasses this year that I am not all that happy with.

The following is reposted with the permission of Anneli Rufus.

She has written several interesting appearing books and has the following sites:

http://www.annelirufus.com/

http://scavenging.wordpress.com/

Wow — the Eyewear Industry Is an Incredible Ripoff, But There Are Alternatives

By Anneli Rufus, AlterNet
Posted on August 31, 2010, Printed on August 31, 2010
http://www.alternet.org/story/148024/

Those of us who need prescription eyewear need prescription eyewear. Are you wearing yours to read this? Imagine if you weren’t. Imagine life without your glasses for a year, a week, an hour. Yet many health insurance plans, especially for the unemployed or self-employed, don’t cover them.

Mine doesn’t.

Last year, I went shopping for no-line progressive bifocals in small oval metal frames. Name brands mean nothing to me. Price does. My high astigmatism and need for bifocals disqualify me from those buy-one-get-one-free deals, which almost always involve only single-vision specs.

In store after store, megachains and optical boutiques alike, small oval metal frames fitted with lenses matching my prescription started at $300. One popular shop quoted me $582 for the lenses alone.

I bought a pair of no-line progressive bifocals in small oval metal frames for $44 online. I’m wearing them right now.

Perhaps because prescription glasses are where medicine meets fashion, they’re among the world’s most overpriced merchandise. Imperfect eyesight isn’t your fault: You can’t make yourself nearsighted by eating too much fudge. Yet if your health plan excludes vision care, you’ve spent years at the mercy of a $64 billion industry characterized by 500-percent markups.

This has begun to change over the last few years. A knowledge-is-power, power-to-the-people, Web-driven DIY wave is rocking the optical industry’s very foundations. Dozens of companies now sell prescription glasses online, frames and lenses included, for as little as $7.95.

It works like this: Google “cheap glasses” to find a frame you like at a price you like at a site you like. (Among the most popular are 39DollarGlasses, ZenniOptical — where I bought mine — and Goggles4U.) Use the virtual fitting mechanism to “try it on.” Type in your prescription (obtained from an actual eye doctor), pupillary distance (aka PD, derived by measuring the space between your pupils with a ruler), address and payment information. Send.

It’s a virtual myopian/hyperopian/presbyopian Tea Party, led largely by Minnesota software engineer Ira Mitchell, who launched his revolutionary GlassyEyes blog (its motto is “Saving the World from Overpriced Glasses!”) in 2006. Packed with forums, product reviews, discount deals, and tips for buying specs online, it’s the vision-impaired version of Yelp.

“There is no appreciable functional or material difference” between prescription eyewear bought online and bought in brick-and-mortar stores, Mitchell tells me, but in stores “the cost to the consumer is anywhere from four to ten times more. It turns out that they’re making ridiculous margins on the frames, the lenses and the coatings.”

Complete with antiscratch coatings and other pluses, his own glasses cost between $30 and $60 per pair online. Over the last three years, he’s bought around 40 pair — because, at that price, he can.

Mitchell was appalled when he first began researching wholesale prices for optical merchandise and realized that opticians acquire lenses for as little as $3 each. “I’ve easily paid twenty times that when I didn’t know any better,” he says.

Granted, these glass, plastic, polycarbonate or polymer blanks must be ground to fit frames and prescriptions, and this takes work, but it’s not rocket science. Typically, lens grinding is done by optical laboratory technicians. According to PayScale.com, OLTs in the United States earn between $9.73 and $14.40 per hour. Most learn on the job, and have only a high-school diploma or a GED. No specific certification is required.

The fleecing, Mitchell says, is just as bad on frames.

“A consumer-level frame costs significantly less than $10 to manufacture. The rest is operations, licensing and profit. Think about that the next time you pick up an average $150 frame. These aren’t markedly different or superior to the $30 glasses available from reputable online dealers — and those include lenses, probably the same ones you were just about to pay $200 for in the store.”

A key to the industry-standard overpricing is the fact that a single corporation — Luxottica, the world’s largest eyewear firm — owns many retail eyewear chains and many popular eyewear brands. Based in Milan, Italy, Luxottica owns and operates LensCrafters, Sears Optical, Target Optical, Pearle Vision, Sunglass Hut, Ilori, and other chains in the United States, along with yet more chains throughout Asia, Europe, Africa, India, the Antipodes and the Middle East.

Luxottica owns Ray-Ban, Oakley, Oliver Peoples, Vogue, and other brands, and makes glasses under license for over a dozen designer labels including Versace, Prada, Bulgari, DKNY, Burberry, Ralph Lauren, Dolce & Gabbana, Donna Karan, Tiffany, and more. As if that isn’t enough, Luxottica is also the parent company of a vision-care benefits program, EyeMed.

Eyewear prices in brick-and-mortar stores stay artificially high, Mitchell says, due to “the lack of real competition, inasmuch as Luxottica owns massive manufacturing, licensing, retailing and insurance interests” — albeit EyeMed is “not so much insurance as a marketing ploy to get people to buy from their stores at a discount and to force the remaining independent stores to buy Luxottica controlled frames. But, again, most people are unaware of this.”

Because one company holds a near-monopoly on brick-and-mortar eyewear stores, “pricing models are somewhat static across the lot of them. They also have a knack for using the mattress sale model … constantly running sales that seem too good to pass up when in reality they’re still making enormous profits.”

“Semi-Annual 50% Off Sales Event,” reads a current LensCrafters ad. But the frames in question range from around $100 to around $300, and that’s without lenses.

“People pay what the brick-and-mortars are asking, primarily because the vast majority don’t know there are better, cheaper options,” Mitchell says.

As with any purchase — in fact more than with most purchases, as this involves eyesight — it pays to research each company’s delivery and return policies, Better Business Bureau status, and accessibility. Does its Web site list a phone number? If not, why not? If so, call it. Can you reach live people? Are they knowledgeable about your prescription? Does the company have its own in-house optometrists? It should. If you care about brand names, can you ascertain that the logo-bearing frames sold by any given company aren’t counterfeits? Factories churn out fakes.

While many online outfits sell real and bogus designer frames, the least expensive frames available online are unapologetically nameless generics: current and classic styles, sans logo. As is true with most consumer products, they’re not necessarily worse than their name-brand counterparts. After a year-plus of daily use, my $44 generics still look new. (That being said, I should have paid a few dollars more for higher-quality polycarbonate lenses and I should have sought bifocals with a wider middle-vision band, but these errors were my own, not the company’s.)

“Very high-priced frames may have somewhat better materials,” Mitchell says, “but from my experience, the no-names have been very well made.” Having owned dozens of generic pairs, he’s experienced “no more issues with them than with the name brands from LensCrafters. I think they’re pretty much on par.”

These days, he notes, “there are a lot more online retailers now than at the end of 2006. There aren’t a whole lot more reputable ones, however. I’ve shopped at over a dozen, and narrowed things down to about three or four that I feel comfortable recommending to others. As this is a fully custom market, mistakes can enter the process anywhere from the initial customer entering prescription information to the production process. I’ve found that a few of the sites do a better job than others at fixing mistakes. Some do better at this than the traditional stores.

“Prices haven’t dropped at all in the traditional brick-and-mortars, but downward price pressure from Wal-Mart will undoubtedly start to make an impact in certain parts of the country. I saw a sign in a
Wal-Mart recently for $38 glasses. The selection was tiny, but we’re starting to see a price intersection.”

The first online eyeglasses company was Houston-based FramesDirect. In 1992, optometrists Dhavid Cooper and Guy Hodgson closed their several Texas brick-and-mortar shops, then pondered their future.

“We knew that we wanted to sell eyewear in all fifty states 24 hours a day, seven days a week, 365 days a year,” Hodgson says. “We had no idea how to do this.” Renting a small office, they installed computers.

“When you talked about the Internet in those days, no one knew what you meant. Search engines were in their absolute infancy. We thought a 56k modem was blisteringly fast.”

Cooper had won a Surgeon General’s Commendation Award in his native South Africa for creating a program providing the poor with recycled glasses for free. Hodgson specialized in treating the nearly blind. Barely fluent in email, the pair created a basic Web site, offering designer glasses at low prices because, unlike brick-and-mortar opticians, they needed to pay neither storefront rent nor employees’ salaries, nor did they need to keep large quantities of merchandise in stock.

“Everyone around us thought we were completely mad: Eye doctors, giving up their lucrative practices to go into this weird thing,” Hodgson laughs. But once orders started pouring in, “The whole optical industry completely shunned us. They said we were ruining them.”

At eyewear conventions, he and Cooper wore their nametags backward to avoid verbal abuse. Since then, dozens of imitators have emerged, many based overseas and most able to offer even lower prices because they sell generics. Buying prescription eyewear is like buying prescription drugs: It’s cheaper online. It’s cheaper when it comes from outside the U.S. GlassesUnlimited, for instance, can afford to sell hundreds of different stylish frames fitted with prescription lenses for only $9.99 because its entire operation is based in Thailand.

“We don’t have big margins here. That’s how we are serving our clientele. That’s why we’re getting hundreds of orders on a daily basis, 70 percent of which come from the U.S. and Canada,” GU manager Sam Davis tells me. “We have virtually no expenses. We have our own home brand and do our own production. We don’t outsource anything.”

Based in the U.S., FramesDirect still undercuts retail-store prices for guaranteed designer goods.

“What we sell and what the brick-and-mortar stores sell are the exact same products,” Guy Hodgson says. “How can they afford to charge the prices they charge?”

Anneli Rufus is the author of several books, most recently The Scavenger’s Manifesto (Tarcher Press, 2009). Read more of Anneli’s writings on scavenging at scavenging.wordpress.com.

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