Forced-Unionism States Face $200B Income Loss as Taxpayers Flee Slow-Growth States

Stan Greer | October 16, 2018 | 2:46pm EDT
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Right to Work demonstrators hold signs that read "Stand With Workers" outside the U.S. Supreme Court building in Washington, D.C. (Screenshot)

For decades, hardworking taxpayers have been fleeing the slow-growth states that permit the firing of employees for refusal to bankroll an unwanted union (now 23 in number) and relocating in faster-growth Right to Work states, where such firings are prohibited.  And thanks to data furnished by the Statistics of Income (SOI) division of the IRS, it is possible to calculate the sum total of wages, salaries, and other income taxpayers take with them when they flee.

The SOI division records the number of personal income tax filers who move (typically with their dependents, if they have any) across state lines, based on address changes in their tax returns.  The SOI data are arranged according to the year taxes are filed.

The most recent available data, for the Tax Filing Year 2016, show that a total of 1.78 million tax filers were residing that year in a Right to Work state after residing somewhere else in the U.S. the previous year.  (Since the ban on forced union dues now in effect in Kentucky, the most recent state to implement a Right to Work law, took effect only last year, it is regarded as a forced-unionism state in this analysis.  West Virginia, which adopted a Right to Work law in 2016, is excluded.)

Meanwhile, roughly 1.60 million tax filers were residing in a Right to Work state in 2015, but filed from somewhere else in the U.S. in 2016.  That means a net total of nearly 180,000 tax filers moved from a forced-unionism state to a Right to Work state between 2015 and 2016.

The SOI division also calculates and makes public the aggregate adjusted gross incomes for tax filers as reported in the year immediately following their move from one state to another.

Personal income tax filers moving out of a forced-unionism state between 2015 and 2016, reported a total of  $128.8 billion in income in 2016, or $75,958 per filer.  Tax filers moving into a forced-unionism state reported a total of $104.5 billion in income, or $68,763 per filer.

Both because of their substantial taxpayer losses due to net domestic out-migration, and because the tax filers they gained reported nearly $7,200 less income apiece than the tax filers they lost, forced-unionism states lost a total of $24.3 billion in adjusted gross income in a single year.

Moreover, all of the seven states (New York, Illinois, New Jersey, Pennsylvania, Connecticut, California and Ohio) suffering the worst losses of income, in absolute terms, due to taxpayer out-migration from 2015 to 2016 lack Right to Work laws.

The 2015-2016 SOI state migration data do not represent a temporary problem for forced-unionism states.  Over the past five years for which SOI data are available, these Big Labor-dominated states collectively lost a total of $96.3 billion (2017 dollars) in adjusted gross income.

States without Right to Work laws are now on track to lose roughly $200 billion in income to domestic out-migration over the course of this decade, or 30 percent more (in constant dollars) than they lost during the first decade of the millennium.

What will it take to convince elected officials in forced-unionism states that are economically torpid or unaffordable for middle-class Americans, or both, that their current policies governing labor relations aren’t working and need to be changed?

Eventually, shrinking revenue bases may finally shake the complacency of Big Labor politicians who don’t seem to mind if far more taxpayers are leaving their state than are moving in.

It shouldn’t require fiscal catastrophes to persuade state elected officials to stop hurting the vast majority of their constituents just so the special privileges of a relative handful of union bosses can be perpetuated and even expanded.  But state insolvency may well arrive before Big Labor politicians in states like New York, Illinois, and New Jersey acknowledge that monopolistic unionism has to be rolled back.

Stan Greer is senior research associate at the National Institute for Labor Relations Research. NILRR’s website is He is also editor of the National Right to Work Committee’s newsletter.


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