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Ch. 22 Section 2. Labor Unions. In a complete sentence, write a statement describing each of the following (Do not just copy the definition!)–. Labor Unions Trade Unions Industrial Unions Right to work law Closed shop Union shop. Strikes Injunction National Labor Relations Board - PowerPoint PPT Presentation
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Labor Unions
Ch. 22Section 2
In a complete sentence, write a statement describing each of the following (Do not just copy the definition!)–Labor UnionsTrade UnionsIndustrial Unions
Right to work law
Closed shopUnion shop
StrikesInjunctionNational Labor Relations Board
MediationArbitrationboycott
Labor Unions are groups of workers who band together to have a better chance to obtain higher pay, benefits and better working conditions
Out of the 151 million in the civilian labor force, only 14% of American workers belong to a union.
That number has been falling since the 1980’s as we have transformed our economy from manufacturing to a service based economy.
Organized Labor
The First UnionsDevelopment
1800sPoor working conditionsWorkers fired for no
reasonWorkers blacklisted
Knights of Labor1st major union founded
in 1869Organized all laborers -
men, women, African-Americans
Terrence V. Powderly1886 peak of
membership at 700,000Ended in 1900
American Federation of Labor (AFL)Organized in 1886Denied unskilled
workers, women, African Americans & immigrants
Samuel GompersFought for higher
wages, shorter hours & benefits for disabled
By 1900 membership reached 500,000 Samuel Gompers
There are two types of unions:1. Trade unions – workers who perform the
same skills2. Industrial unions – bring workers together
who belong to the same industry
Organized labor has a three level hierarchy: local unions national unions federations
Organized Labor (cont.)
Union Guessing Game
Amer. Federation of Federal Employees
United American Nurses
Airline Pilots Assoc.
Amer. Federation of Teachers
American Postal Workers Union
Local unions are made up of workers in a factory, company or geographic area.
Usually identified with #s
Negotiates a contract with a company and monitors the contract terms
Represents the National unions agenda, while at the same time representing the desires of their constituents
Organized Labor (cont.)
National unions are the individual craft or industrial unions that represent local unions nationwide
Help employees set up local unions and negotiate contracts
In certain industries, the national union negotiates the contracts for the entire industry
Organized Labor (cont.)
At the Federation level is the AFL-CIO
Represents 13 million workers nationwide
From 1955-2005, represented virtually all unionized workers in the U.S.
Organized Labor (cont.)
Closed Shop – Companies hire only union members
Union Shop – Workers must join the union after a specified time
Agency Shop – Not required to join a union, but must pay dues
Open Shop – Companies may hire workers regardless of membership
Modified Union Shop – Workers given an option to join a union after hiring
Union Membership Policies
In the past, some labor unions supported closed shops, when a worker would have to first belong to a union to be hired by a company.
This was banned by the Taft-Hartley Act 1947
Stopped the practice of closed shops
Organized Labor
A common arrangement today is the union shop, which allows companies to hire anyone as long as they join the union shortly after they begin working
One part of the Taft-Hartley Act banned this practice as well.
22 states have passed right-to-work laws, which prevent mandatory union membership required by union shops
Organized Labor
What we see in the South are modified union shops, in which workers do not have to join a union, but if they do join have to remain a member for the duration of their employment.
A majority of workers must vote in favor of a union before one can be formed.
The National Labor Relations Board makes sure union votes are carried out honestly
Organized Labor
Process where union leaders & employers discuss employment terms
Once workers choose to be represented by a union, the union is responsible for carrying out collective bargaining.
Union and company representatives meet to discuss conditions of employment such as:
1. Wages2. Work hours3. Working conditions4. Grievance procedures5. Benefits6. Work rules and responsibilities
Collective Bargaining
Compromise is the issue3 steps
Negotiation – Labor & management meet to discuss contract issuesMediation – A neutral 3rd party hears both sides
Federal Mediation & Conciliation Service provides a mediator
Arbitration – 3rd party makes a final decision for a compromise. Has the power of a judge and both sides agree to accept the arbitrators decision.
1. Traditional Economies2. Command Economies3. Market Economies4. Laser Taser Watches
Many African countries have:
Worker/Union Strikes – workers refuse to workPicketing – used to discourage other
workers from workingBoycott – Refuse to purchase goods
or services from the companyScab – Worker willing to work on
company terms
When Collective Bargaining Fails
Business/ManagementLockout - in which the company blocks workers from
entering the workplace until they accept their contract terms.
Blacklist – A list of people who are denied employment
Businesses hope the loss in income will convince workers to accept the companies position.
Can ask the courts to issue an injunction, a legal order from the court preventing some activity (strike)Ex. 1995 MLB season
Labor-Management Conflict (cont.)
In severe or extreme labor-management dispute, government may get involved.
Can seize operations of an industry until conflict is settled.Ex. 1946 U.S. seized the coal industry because of the countries need for this energy source. Operation of the mines continued, until labor and management came to an amicable agreement
Labor-Management Conflict (cont.)
Strike Picketing
ViolenceScabs/Strikebreakers
1869 – Knights of Labor founded1882 – First Labor Day parade1886 – AFL founded1892 – Homestead Strike1911 – Triangle Shirtwaist factory fire1912 – Bread and Roses strike; Dept. Labor founded1914 – Ludlow Massacre1920 – Women get right to vote in US1946 – Largest strike wave in US history1947 – Taft-Hartley Act1955 – AFL and CIO merge1970 – Occupational Safety and Health Act passed (OSHA)1981 – President Reagan breaks air traffic controllers strike2013 – Union membership hits 97 year low (14.3 million
union members, 11.3% of population)
Major Events in Union History
1. Complimentary2. Mr. Freeze3. Inelastic4. Elastic
If an item has competing brands it is defined as:
Unions TodayRight to Work States
Prevents unions from forcing workers to join
Movement of Human CapitalRust belt – the North Sun belt – the SouthFactories & businesses moved from the
rustbelt to the sunbelt Weather was betterCheaper laborNo existing unions
White collar vs. Blue collar jobsWhite Collar = upper management
Lot of news on white collar crime in big business. Example: Enron, Merrill Lynch
Blue Collar = working class, usually doing manual labor
Blue Collar Workers
Right to Work States in Blue
Right to Work States – Why it matters?
1. Rust Belt2. Sun Belt3. White Collar4. Blue Collar
What are the type of jobs that usually occur in manufacturing sectors called?
Ch. 20
Money, Banking,Credit & Consumer
Rights
MoneyReplaced the barter system in traditional economiesFunctions
Medium of ExchangeUsed to trade/purchase goods/services
Store of ValueAbility to store or save
Medium/Measure of ValueCan be divisible Each one must be equal to the otherNot easy to counterfeit
Standard of Deferred PaymentUsed to buy on credit
1.Joyce wants to buy a new coffee mug for $5, but decides to wait until payday.
2.Ben bought 2 tickets for a movie3.Melissa promised to repay next month a loan
Emily gave her4.Ken was trying to decide whether to buy 3
candy bars for $.50 each or 1 chocolate Sunday for $1.65
5.Joanne purchased a new hat as a present for her sister
6.Tyrone puts $20 into his savings account. He hopes to save enough money to buy a new dirt bike.
7.Henry has to pay the bank $187.50 a month for the next 4 years on his new car loan.
8.Kim decided to take the $.75 bus ride rather than an $8 cab ride.
9.The manager of Apex Stores gave Maria her paycheck
10.George always likes to keep a $20 bill stashed away in his wallet for emergencies.
Different types of Money
1. Law of Diminishing Returns2. Anti-Pizza disease3. Full Stomach syndrome 4. Diminishing Marginal Utility
What is it called when you get less satisfaction from eating your 2nd piece of pizza?
1. Unions2. Labor3. Natural Resources4. Capital
What is not a factor of production?
1. Traditional2. Market3. Mixed4. Command
What type of economy is the U.S.?
BankingBrings savers (sellers) &
borrowers (buyers) together in the market
Savers = depositsBorrowers = loansBanks are a business and
have profit motiveMake money off of fees and
interest on loansReserve Requirements –
banks want more deposits so they can loan more money
1. Roosevelt’s Fireside Chats2. Bank Holiday3. Stock Market Crash4. Hoovervilles
What signaled the start of the Great Depression?
1. The Federal Reserve Act of 19132. National Banking Act of 18633. The Gramm-Leach-Bliley Act
What Banking Act created a national currency backed by U.S. government bonds?
1. Checking Account Allows customers to write checks, use
debit cards or withdraw money from an ATM (Automated Teller Machine)
Money transactions are quick and efficient
Money does not stay in the account for long
Depositor usually receives no interest Checking/Debit Cards
Transfer of funds electronicallyTied directly to checking accounts
Types of Deposit Accounts
Checking Accounts
2. Savings Account Banks pay interest to customers
based on how much money is deposited
Money remains untouched for longer periods of time
Types of Deposit Accounts cont.
Savings Account
Sample Bank Book
3. Certificate of Deposit (CDs)Customers loan a certain amount
to the bank for a certain amount of time Ex. I bought a $1,000 CD for 1 year at 4%
Higher rates of interest than savings
Customers can’t withdraw their money without a penalty
Types of Deposit Accounts cont.
1. Commercial Banks – full service to individuals & businesses (Most common)
2. Savings & Loan Associations – traditionally loaned money to people buying homes & issued only savings accounts
3. Credit Unions – non-profit – sponsored by large businesses, labor unions or government institutions – offer full services at usually lower prices
Types of Banks
Commercial Banks
Credit Unions
Federal Deposit Insurance CorporationInsures deposited money in the bank up to
$250,000Most banks are FDIC insured
FDIC
1. 9/112. Bombing of Pearl Harbor3. The stock market crash and bank runs
during the Great Depression
What US event caused the formation of the FDIC?
Agreement for borrowing money with repayment plus interest
Used to make expensive purchasesBanks make money on the interest paid for a
loanIn order to make loans, banks have to have
moneyTo have the money, banks must attract deposit
customersCan increase the supply of moneyPrinciple – amount borrowedInterest – cost of borrowingInterest Rate – rate of cost to borrow
Loans
1. Fixed – interest is set & can’t be changed
2. Variable – Changes when interest rates change
Types of Loans
How do bank loans increase the supply of money?
1. Not enough goods for everyone 2. The amount that people want 3. Lack of desire to produce enough
resources 4. Not enough resources to provide for
every desire
Which of the following best describes scarcity?
Buy goods & services at individual stores & pay for them later
Credit limit: maximum amount a person can buy with the promise of payment
Charge Accounts
1. Installment Account Repaid with equal payments over a
certain period of time Part of the payment goes towards
interest & part towards the principle Car loan or mortgage
2. Regular Account Billing cycles where a bill is sent at the
end No interest is charged if entire bill is
paid Account can’t be used again until the
balance is paid Interest is charged on the balance not
paid Furniture Stores usually do this. Pay
by 2010, certain amount each month, but with no interest.
Types of Charge Accounts
3. Revolving Account Billing cycles where a bill is sent
at the end Interest charged on portion not
paid Account can still be used until
credit limit is reached Example: Credit Cards
Types of Charge Accounts cont
1. Set price control 2. Own the means of production 3. Absolutely no role4. Set production quotas
What is the government’s role in a market economy?
Make purchases without having the money
Charge high interest rates Lower interest rates if the customer is
reliableFinance Charges – Cost of credit
(interest) expressed in dollars APR – Cost of credit (interest)
expressed as a percentage
Credit Cards
Fill out applicationCredit Bureau does a credit checkCreditor may ask for referencesCredit checks show your income, debt
and ability to pay debts in the past
Applying for Credit
1. Trade-off2. Scarcity3. Opportunity cost4. Comparative advantage
Which economic term best explains a consumer’s choice of buying a new car instead of opening a savings account?
Rating of risk: Excellent, Good, Average or Poor
Ratings have a number associated with them
3 Credit Bureaus: Experian, Transunion & Equifax
Gives lenders an idea of reliability when issuing loansHigher Credit Score = less interest you
are charged on a loan = saving moneyUnsecured loans – loan based on reputationSecured loans – have collateral to back up
the loan
Credit Rating
Credit Bureaus
Equal Credit Opportunity Act: a person can’t be denied credit because of race, religion, national origin, gender, marital status or age
Usury Laws: Restrict the amount of interest companies, not banks, can chargeIn North Carolina, it is 8%. If you
lend a neighbor $100, you can only receive $8 in interest
Government Regulations
1. Utility2. Public Goods3. Personality4. Externality
What is the unintended side effect of an action?
Debts are so large they can’t be paid back
Most of what a debtor owns is sold or given to creditors
Takes 10 years to reestablish creditStates can become bankrupt to
o
Bankruptcy
Consumer – someone who buys a product or service
Types of IncomeDisposable Income – money after
taxes taken out. Money to pay for house, car, etc.
Discretionary Income – money remaining after paying for necessitiesEither save or spend it
Consumer Rights
Consumerism – a movement to educate buyers on purchases and to make sure products are safeCongressional laws – Pure Food and Drug Act
in 1906Private groups – Better Business Bureau
(BBB)
Consumer Bill of RightsConsumers have…
Right to a safe productRight to be informedRight to chooseRight to be heardRight to redress
Consumer Rights cont.
Smart Buying Strategies Get info on productsWatch out for advertisingComparison shopping – find out
prices on product from different stores/internetBrand Name vs. Generic
When product failsReport itCheck the warrantyKeep a copy of the receiptBe calm
Make Fair complaints
Consumer Responsibilities