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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

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ch 22 section 2

Ch. 22Section 2

Labor Unions

slide2
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
  • Mediation
  • Arbitration
  • boycott
organized labor
Organized Labor
  • 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.
the first unions
Development

1800s

Poor working conditions

Workers fired for no reason

Workers blacklisted

Knights of Labor

1st major union founded in 1869

Organized all laborers - men, women, African-Americans

Terrence V. Powderly

1886 peak of membership at 700,000

Ended in 1900

The First Unions
slide5
American Federation of Labor (AFL)
    • Organized in 1886
    • Denied unskilled workers, women, African Americans & immigrants
    • Samuel Gompers
    • Fought for higher wages, shorter hours & benefits for disabled
    • By 1900 membership reached 500,000

Samuel Gompers

organized labor cont
Organized Labor (cont.)
  • There are two types of unions:
  • Trade unions– workers who perform the same skills
  • Industrial unions– bring workers together who belong to the same industry
  • Organized labor has a three level hierarchy:
    • local unions
    • national unions
    • federations
union guessing game
Union Guessing Game

Amer. Federation of

Federal Employees

Amer. Federation of

Teachers

United American Nurses

American Postal Workers Union

Airline Pilots Assoc.

organized labor cont1
Organized Labor (cont.)
  • 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 cont2
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 cont3
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.
union membership policies
Union Membership Policies
  • 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
organized labor1
Organized Labor
  • 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 labor2
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 labor3
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
collective bargaining
Collective Bargaining
  • 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:
  • Wages
  • Work hours
  • Working conditions
  • Grievance procedures
  • Benefits
  • Work rules and responsibilities
slide16

Compromise is the issue

  • 3 steps
    • Negotiation – Labor & management meet to discuss contract issues
    • Mediation – 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.
many african countries have
Many African countries have:
  • Traditional Economies
  • Command Economies
  • Market Economies
  • Laser Taser Watches
when collective bargaining fails
When Collective Bargaining Fails
  • Worker/Union
    • Strikes – workers refuse to work
    • Picketing – used to discourage other workers from working
    • Boycott – Refuse to purchase goods or services from the company
    • Scab – Worker willing to work on company terms
labor management conflict cont
Labor-Management Conflict (cont.)
  • Business/Management
    • Lockout - 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 cont1
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

slide21

Strike

Picketing

Scabs/Strikebreakers

Violence

major events in union history
Major Events in Union History
  • 1869 – Knights of Labor founded
  • 1882 – First Labor Day parade
  • 1886 – AFL founded
  • 1892 – Homestead Strike
  • 1911 – Triangle Shirtwaist factory fire
  • 1912 – Bread and Roses strike; Dept. Labor founded
  • 1914 – Ludlow Massacre
  • 1920 – Women get right to vote in US
  • 1946 – Largest strike wave in US history
  • 1947 – Taft-Hartley Act
  • 1955 – AFL and CIO merge
  • 1970 – Occupational Safety and Health Act passed (OSHA)
  • 1981 – President Reagan breaks air traffic controllers strike
  • 2013 – Union membership hits 97 year low (14.3 million union members, 11.3% of population)
if an item has competing brands it is defined as
If an item has competing brands it is defined as:
  • Complimentary
  • Mr. Freeze
  • Inelastic
  • Elastic
unions today
Right to Work States

Prevents unions from forcing workers to join

Movement of Human Capital

Rust belt – the North

Sun belt – the South

Factories & businesses moved from the rustbelt to the sunbelt

Weather was better

Cheaper labor

No existing unions

White collar vs. Blue collar jobs

White 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

Unions Today
slide25

Right to Work States in Blue

Blue Collar Workers

what are the type of jobs that usually occur in manufacturing sectors called
What are the type of jobs that usually occur in manufacturing sectors called?
  • Rust Belt
  • Sun Belt
  • White Collar
  • Blue Collar
money
Replaced the barter system in traditional economies

Functions

Medium of Exchange

Used to trade/purchase goods/services

Store of Value

Ability to storeor save

Medium/Measure of Value

Can be divisible

Each one must be equal to the other

Not easy to counterfeit

Standard of Deferred Payment

Used to buy on credit

Money
slide30

Joyce wants to buy a new coffee mug for $5, but decides to wait until payday.

Ben bought 2 tickets for a movie

Melissa promised to repay next month a loan Emily gave her

Ken was trying to decide whether to buy 3 candy bars for $.50 each or 1 chocolate Sunday for $1.65

Joanne purchased a new hat as a present for her sister

Tyrone puts $20 into his savings account. He hopes to save enough money to buy a new dirt bike.

Henry has to pay the bank $187.50 a month for the next 4 years on his new car loan.

Kim decided to take the $.75 bus ride rather than an $8 cab ride.

The manager of Apex Stores gave Maria her paycheck

George always likes to keep a $20 bill stashed away in his wallet for emergencies.

what is it called when you get less satisfaction from eating your 2 nd piece of pizza
What is it called when you get less satisfaction from eating your 2nd piece of pizza?
  • Law of Diminishing Returns
  • Anti-Pizza disease
  • Full Stomach syndrome
  • Diminishing Marginal Utility
what is not a factor of production
What is not a factor of production?
  • Unions
  • Labor
  • Natural Resources
  • Capital
what type of economy is the u s
What type of economy is the U.S.?
  • Traditional
  • Market
  • Mixed
  • Command
banking
Brings savers (sellers) & borrowers (buyers) together in the market

Savers = deposits

Borrowers = loans

Banks are a business and have profit motive

Make money off of fees and interest on loans

Reserve Requirements – banks want more deposits so they can loan more money

Banking
what signaled the start of the great depression
What signaled the start of the Great Depression?
  • Roosevelt’s Fireside Chats
  • Bank Holiday
  • Stock Market Crash
  • Hoovervilles
what banking act created a national currency backed by u s government bonds
What Banking Act created a national currency backed by U.S. government bonds?
  • 1. The Federal Reserve Act of 1913
  • 2. National Banking Act of 1863
  • 3. The Gramm-Leach-Bliley Act
types of deposit accounts
Types of Deposit Accounts
  • 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 electronically
      • Tied directly to checking accounts
types of deposit accounts cont
Types of Deposit Accounts cont.

2.Savings Account

  • Banks pay interestto customers based on how much money is deposited
  • Money remains untouched for longer periods of time
savings account
Savings Account

Sample Bank Book

types of deposit accounts cont1
Types of Deposit Accounts cont.

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 banks
Types of Banks
  • Commercial Banks – full service to individuals & businesses (Most common)
  • Savings & Loan Associations – traditionally loaned money to people buying homes & issued only savings accounts
  • Credit Unions – non-profit – sponsored by large businesses, labor unions or government institutions – offer full services at usually lower prices
slide47
FDIC
  • Federal Deposit Insurance Corporation
  • Insures deposited money in the bank up to $250,000
  • Most banks are FDIC insured
what us event caused the formation of the fdic
What US event caused the formation of the FDIC?
  • 9/11
  • Bombing of Pearl Harbor
  • The stock market crash and bank runs during the Great Depression
loans
Loans
  • Agreement for borrowing money with repayment plus interest
  • Used to make expensive purchases
  • Banks make money on the interest paid for a loan
  • In order to make loans, banks have to have money
  • To have the money, banks must attract deposit customers
  • Can increase the supply of money
  • Principle – amount borrowed
  • Interest – cost of borrowing
  • Interest Rate – rate of cost to borrow
types of loans
Types of Loans
  • Fixed – interest is set & can’t be changed
  • Variable – Changes when interest rates change
which of the following best describes scarcity
Which of the following best describes scarcity?
  • Not enough goods for everyone
  • The amount that people want
  • Lack of desire to produce enough resources
  • Not enough resources to provide for every desire
charge accounts
Charge Accounts
  • Buy goods & services at individual stores & pay for them later
  • Credit limit: maximum amount a person can buy with the promise of payment
types of charge accounts
Types of Charge Accounts
  • 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
  • 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 cont
Types of Charge Accounts cont

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
what is the government s role in a market economy
What is the government’s role in a market economy?
  • Set price control
  • Own the means of production
  • Absolutely no role
  • Set production quotas
credit cards
Credit Cards
  • Make purchases without having the money
  • Charge high interest rates
  • Lower interest rates if the customer is reliable
  • Finance Charges – Cost of credit (interest) expressed in dollars
  • APR – Cost of credit (interest) expressed as a percentage
applying for credit
Applying for Credit
  • Fill out application
  • Credit Bureau does a credit check
  • Creditor may ask for references
  • Credit checks show your income, debt and ability to pay debts in the past
slide59
Which economic term best explains a consumer’s choice of buying a new car instead of opening a savings account?
  • Trade-off
  • Scarcity
  • Opportunity cost
  • Comparative advantage
credit rating
Credit Rating
  • 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 loans
    • Higher Credit Score = less interest you are charged on a loan = saving money
  • Unsecured loans – loan based on reputation
  • Secured loans – have collateral to back up the loan
government regulations
Government Regulations
  • 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 charge
    • In North Carolina, it is 8%. If you lend a neighbor $100, you can only receive $8 in interest
what is the unintended side effect of an action
What is the unintended side effect of an action?
  • Utility
  • Public Goods
  • Personality
  • Externality
bankruptcy
Bankruptcy
  • 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 credit
    • States can become bankrupt too
consumer rights
Consumer Rights
  • Consumer – someone who buys a product or service
  • Types of Income
    • Disposable Income – money after taxes taken out.
      • Money to pay for house, car, etc.
    • Discretionary Income – money remaining after paying for necessities
      • Either save or spend it
consumer rights cont
Consumer Rights cont.
  • Consumerism – a movement to educate buyers on purchases and to make sure products are safe
    • Congressional laws – Pure Food and Drug Act in 1906
    • Private groups – Better Business Bureau (BBB)
  • Consumer Bill of Rights
    • Consumers have…
      • Right to a safe product
      • Right to be informed
      • Right to choose
      • Right to be heard
      • Right to redress
consumer responsibilities
Consumer Responsibilities
  • Smart Buying Strategies
    • Get info on products
    • Watch out for advertising
    • Comparison shopping – find out prices on product from different stores/internet
      • Brand Name vs. Generic
  • When product fails
    • Report it
    • Check the warranty
    • Keep a copy of the receipt
    • Be calm
  • Make Fair complaints