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Q&A: What is a right-to-work state?

Mitch Marsden
by Mitch Marsden , NAPFA

The name “right-to-work” is somewhat misleading, as it may make you think of having some sort of guaranteed employment status or greater job security. However, it really refers to a set of laws that 24 states have adopted that prohibits employer-and-union agreements that would require employees to join the union and pay union dues as a condition of employment.

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Unions, which may be thought of as a large employment or professional group, work to bargain as a collective power with employers for certain rights and benefits for their members. Right-to-work states may be thought of as freeing both employers and potentially some employees from having to deal with these types of conditions. Proponents of these laws believe that this leads to greater economic development. 

On the other hand, opponents to right-to-work states note that the union’s power is weaker, which may lead to lower wages and worse working conditions. Opponents also argue that right-to-work laws provide non-union employees a free ride on the union’s bargaining power without having to pay dues.

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Right-to-work laws in and of themselves have no bearing on your job security. However, the implications of right-to-work laws may indirectly influence job security.  Stronger, more powerful unions, which may be found in the non-right-to-work states, may help offer better security and/or severance benefits if you lose your job.

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Mitch Marsden is a member of the National Association of Personal Financial Advisors (NAPFA), a fee-only professional association and a Dimespring knowledge partner.