Cost of Forced Unionism Mounts Ever Higher

Big Labor-Ruled States Lose $114 Billion in Income in Four Years

Recently released Internal Revenue Service (IRS) data confirm that more and more taxpayers are fleeing slow-growth states that permit the firing of employees for refusal to bankroll an unwanted union and relocating in faster-growth Right to Work states.

As a group, the 23 states that still lack Right to Work laws lost a net total of $113.9 billion in income to domestic out-migration from 2015 to 2019. 

That’s a 77% greater loss than what these same states endured from 2011 to 2015!

“What will it take,” asked National Right to Work Committee President Mark Mix, “to convince elected officials in forced-unionism states that are economically torpid or unaffordable, or both, that they must change course, or face potentially grave ballot-box repercussions for favoring Big Labor bosses over everyone else?”

From 2018 to 2019, a Net Total Of Roughly 212,000 Taxpayers Fled Compulsory-Dues States

“If nothing else shakes the complacency of Big Labor politicians who don’t seem to mind if far more taxpayers are leaving their state than are moving in,” noted Mr. Mix, “one day in the not-too-distant future shrinking revenue bases will require them to wake up.”

Thanks to data furnished by the Statistics of Income (SOI) division of the IRS, it has for many years now been possible to calculate the sum total of wages, salaries, and other income taxpayers take with them when they flee forced-dues states.

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 shown on their tax returns. 

The SOI data are arranged according to the year taxes are filed.

For example, the most recent available data (for the Tax Filing Year 2019) show that a total of 1.546 million tax filers were residing in a forced-dues state that year after residing somewhere else in the U.S. the previous year.

Meanwhile, 1.758 million tax filers were residing in a forced-dues state in 2018, but filed from somewhere else in the U.S. in 2019.

That means a net total of roughly 212,000 tax filers moved from a forced-unionism state to a Right to Work state between 2018 and 2019.

Forced-Dues States Lost An Average of $85,609 Per Fleeing Taxpayer 

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

Personal income tax filers moving out of a forced-unionism state between 2018 and 2019 reported a total of $150.5 billion in annual income in 2019, or $85,609 per filer.

Tax filers moving into a forced-unionism state reported a total of $119.2 billion in income, or $77,090 per filer.

Both because of their substantial taxpayer losses due to net domestic out-migration, and because the taxpayers they gained reported $8,519 less income apiece than the tax filers they lost, forced-unionism states lost a net total of $31.3 billion in adjusted gross income in a single year.

Moreover, all of the nine states (California, New York, Illinois, New Jersey, Maryland, Pennsylvania, Ohio, Connecticut and Massachusetts) suffering the worst losses of income, in absolute terms, due to taxpayer out-migration from 2018 to 2019 lack Right to Work laws.

(See the chart located below for additional information.)

Year after year, far more taxpayers are moving out of forced-unionism states than are moving into them. They are taking their income with them. And forced-unionism states’ income losses due to taxpayer out-migration are mounting.

Financial Cost Suffered by Big Labor-Ruled States Compounds Every Year

Over the past eight years for which SOI data are available, the 23 remaining compulsory-unionism states collectively lost a total of $178.2 billion in adjusted gross income.

And the migration data furnished by the IRS pointing to a probable cumulative loss in excess of $230 billion from 2010 to 2020 do not convey how much taxpayers who flee forced-unionism states earn any later than the first year after they depart. 

The actual financial cost endured by Big Labor-ruled states compounds as it recurs, year after year.

The accumulated net loss from 2010 to 2020, including income reported by taxpayers in all years subsequent to their migration, cannot be calculated, but will very likely be five times as high as what the IRS data are revealing.

State Right to Work laws protect employees’ freedom to refuse to pay dues or fees to an unwanted union.

Wherever employees lack this freedom, union bosses have little incentive to tone down their  “hate-the-boss” class warfare in the workplace. Employees are consequently far less likely to reach their full productive potential.

Federal Politicians Bear Primary Blame For Forced-Dues States’ Decline

“Compulsory unionism is wrong, plain and simple,” affirmed Mr. Mix.

“It is also an economic albatross as our nation strives to get aggregate employment levels back to where they were before 2020’s severe, COVID-19-related downturn.”

Mr. Mix explained that, while states that fail to shield employees from federal pro-forced-unionism policies are harmed most of all, the entire country suffers severe damage:

“The union-label politicians who regularly get elected and reelected because of Big Labor’s forced-dues-funded support overwhelmingly favor higher taxes and more red-tape regulation of business.

“This is true at the federal, state and local levels. 

“Private-sector job growth in all 50 states, including Right to Work states, is hindered by the actions of Big Labor politicians.” 

Mr. Mix continued:

“Meanwhile, forced-unionism strong-holds like New York, California and Illinois face a ‘jobs crisis’ as they fail, year after year, to create enough good-paying employment opportunities to retain and attract paycheck earners and their families.

“As a May 7 editorial in the Champaign (Ill.) News-Gazette pointed out, IRS data show 65% — that is, the vast majority — of the Prairie State’s out-migrants are ‘adults between 25 and 54’ — people in their prime working years.

“‘The real questions,’ concluded the editorial, ‘are why so many young adults are looking for greener pastures outside of Illinois, and what to do about it.’ 

“Big Labor state politicians like current Illinois Gov. J.B. Pritzker [D] are largely responsible for the deadly combination of a rapidly rising cost of government and a shrinking base of taxpaying employees and business owners.

“But politicians in Washington, D.C., who foisted compulsory union dues and fees on the entire country by adopting the National Labor Relations Act [NLRA] in 1935 and their successors who perpetuate this unjust system today are the principal culprits.

“It is federal law,” emphasized Mr. Mix, “not the law of any state, that today forces millions of private-sector workers across America to fork over dues or fees to a union they may not want as a condition of employment.

“The Committee and its members and supporters are determined to abolish this unfair and economically destructive coercion of workers from coast to coast.”  

Committee Leads Charge For Bill Repealing Forced Dues Nationwide

Adoption by Congress of S.406/H.R.1275, the National Right to Work Act, would be a giant step in the right direction.

S.406/H.R.1275 would repeal all the current forced-dues provisions in federal labor law, ensuring that every private-sector worker in America who is covered by the NLRA or the Railway Labor Act has the Right to Work.

Thanks primarily to Right to Work members’ persistent lobbying of their elected officials, as of the end of June, 88 U.S. representatives and 21 U.S. senators had already signed on as sponsors of federal compulsory-dues repeal. 

This article was originally published in our monthly newsletter. You can go here to access previous newsletter posts.

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