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Labor_Unions_and_credit Powered By Docstoc
					Labor Unions
   - Association of workers organized to improve wages and working
      conditions for its members.
   - A group has more power than an individual.
   - Poor working conditions in factories in the 1800’s.
   - Workers were fired for no reason.
   - Workers were often blacklisted.
Knights of Labor
   - Founded in 1869. Attempted to organize all laboring people.
   - Terrence V. Powderly became their leader after 1879.
   - Membership increased to 700,000 between the years 1885-1886.
   - Began to decline and ended in 1900.
American Federation of Labor
   - Organized in 1886.
   - Accepted only skilled workers. Women, African-Americans, and
      immigrants were not accepted.
   - AFL had separate unions for different crafts.
   - Samuel Gompers was president of the union. He wanted higher wages,
      shorter hours, and benefits for disabled workers.
   - Between 1890-1900, membership reached 500,000.
Union membership policies
   - Closed Shop: Companies hire only union members.
   - Union Shop: Worker must join the union after a specific time period.
   - Agency Shop: Not required to join the union, but must pay dues.
   - Open Shop: Companies may hire workers regardless of membership.
Collective Bargaining
   - Process where union leaders and employers discuss employment terms.
   - Compromise is the main issue.
   - Three steps: Negotiation, mediation, and arbitration.
   - Negotiation: Labor and management meet to discuss contract issues.
   - Mediation: A neutral person helps both sides reach agreements. The
      Federal Mediation and Conciliation Service will provide a mediator.
   - Arbitration: Two sides submit issues to a third party for a final decision.
When Collective Bargaining Fails
   - Strike: Workers refuse to work.
          o Picketing: Discourage workers from working.
          o Boycott: Refuse to purchase goods or services from the company.
          o Scab: Worker willing to work on company terms.
   - Lockout: Management prevents workers from working.
    - Receiving something with the promise of payment at a later time.
    - Principle: Actual cost of the good or service.
    - Interest: Fee paid for the use of money.
Charge Accounts
    - Buy goods and services at individual stores and pay for them later.
    - Credit limit: Maximum amount a person can buy with the promise of
       payment at a later time.
    - Three types of accounts are installment, regular, and revolving.
1. Installment Account
    - Repaid with equal payments over a certain period of time.
    - Mortgage: Payment owed on property.
    - Part of payment goes to interest and part goes to principle.
2. Regular Account
    - At the end of the billing cycle, a bill is sent to the account holder.
    - No interest is charged, but the entire bill must be paid.
    - The account can not be used again until the balance is paid off.
    - Interest is charged on the balance not paid.
3. Revolving Account
    - At the end of the billing cycle, a bill is sent.
    - Interest is charged on the portion not paid.
    - The account can still be used until the credit limit is reached.
Credit and Debit cards
    - Debit Cards: Transfer funds electronically.
           o Popular use in Automated Teller Machines (ATM’s)
           o Now can be tied directly to checking accounts (check cards)
    - Credit cards: Make purchases without cash.
           o Used to purchase items and receive loans.
           o Charge high interest rates (Avg. 18%) in the 1990’s.
           o Lower interest rates if the customer is “reliable”.
Applying for credit
    - Fill out an application.
    - Credit Bureau will do a credit check. Creditor will ask for references.
    - This check shows your income, debt, and ability to pay debts in the past.
Credit Rating
    - Rating of risk: Excellent, good, average, or poor.
    - This gives the lender an idea of reliability.
    - They also look at capacity to pay, character, and collateral.
    - A secured loan is a loan based on collateral, something the borrower is
       willing to give up if the loan is not paid back.
    - An unsecured loan is one based on reputation.
Government Regulations
   - Equal Credit Opportunity Act: A person can not be denied credit because
      of race, religion, national origin, gender, marital status, or age.
   - Usury laws: Restrict the amount of interest companies can charge.
   - When debts are so large, that they can not be repaid.
   - Most of what debtors own is given to creditors.
   - It is very hard to re-establish credit.
Finance Charges and Annual Percentage Rate (APR)
   - Finance Charges: Cost of credit expressed in dollars.
   - APR: Cost of credit as a percentage. May differ from place to place.
Financial Institutions
   - Commercial banks: Main functions are accepting deposits, lending money,
      and transferring funds.
   - Savings and loan: Very much like commercial banks. Normally smaller
   - Savings banks: Original purpose was to help those overlooked by large
      banks. Sometimes charge higher interest rates.
   - Credit Unions: Offer high interest on saving and low interest on loans.
      Must be a member to use their services.
   - Finance Companies: Charge high interest rates. Used by those with bad
      credit history.