Right-to-Work Law
What is Right-to-Work Law?
A right-to-work law is a state law that bans requiring workers to join a union or pay union fees as a condition of keeping a job.
When a union wins an election it must represent everyone in the bargaining unit, members and non members alike, and without a right-to-work law a private sector contract can require every covered worker to pay dues or an equivalent representation fee. Right-to-work laws, which Section 14(b) of the federal Taft-Hartley Act allows states to pass, make those payments voluntary. Economists analyze what follows as a free rider problem: a worker gets the negotiated wage and grievance protection whether or not they pay, so dues revenue and membership tend to fall and the union's bargaining power weakens. Supporters argue the laws protect individual choice and draw employers to the state, and the evidence on wages and employment is genuinely contested, so treat confident claims in either direction with caution. Right-to-work is not at-will employment, which is a separate doctrine about being fired without cause.
Right-to-Work Law: a worked example
Suppose a plant has 500 workers in the bargaining unit and annual dues of $600, so the union collects 500 × $600, or $300,000 a year. The state adopts a right-to-work law and 200 workers stop paying, since the contract covers them either way. Dues revenue falls to 300 × $600, or $180,000, a drop of $120,000 and 40 percent. The union still has to bargain the contract and handle grievances for all 500, so its cost per paying member rises as its budget shrinks. That squeeze on resources, not any ban on organizing, is the main channel through which these laws affect unions.
The mistake students make with right-to-work law
Many students think right-to-work means an employer needs a good reason to fire you. That is at-will employment, a separate doctrine. Others believe the laws outlaw unions, which they do not: unions in these states still organize, bargain and strike. What the law removes is the ability to require dues or fees from workers the union is legally obliged to represent.
Right-to-Work Law questions
Do right-to-work laws ban unions?
No, right-to-work laws do not ban unions or collective bargaining. They make union membership and dues voluntary for workers covered by a union contract. Unions in these states still negotiate contracts and still have to represent every worker in the bargaining unit, paying or not.
What is the difference between right-to-work and at-will employment?
Right-to-work is about union dues, while at-will employment is about dismissal. A right-to-work law says you cannot be forced to join or pay a union in order to hold a job; at-will employment says either side can end the job at almost any time for almost any reason. Nearly every state uses at-will employment, but only some have right-to-work laws.
Why do economists call this a free rider problem?
Union representation behaves like a public good inside a bargaining unit, since the negotiated wage and grievance process reach everyone whether or not they pay. Once fees are voluntary, each individual worker's best private move is to let others fund the union. The predictable result is underfunding relative to what the members collectively want.
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