In Right to Work States, Highest Income People Take in a Lower Share of All Income

As Right to Work advocates have documented again and again, compulsory unionism is negatively correlated with job growth, income growth, and GDP growth.  Slower growth in jobs, incomes and production aren’t good for anybody, but IRS data regarding the adjusted gross incomes of taxpayers in the 50 states (see the second link below) suggest that the policies that corral employees into unwanted unions hurt the highest-income people less than they do the rest of us.

In 2012, in the 27 states that then lacked Right to Work laws, according to IRS Statistics of Income division data, the small minority of individual and joint tax filers with $200,000 or more in adjusted gross income (AGI) took in 34.7% of all AGI.  (Since Michigan’s Right to Work law did not take effect until 2013, it is counted as a forced-unionism state here.)  Meanwhile, in the 23 states that then had Right to Work laws on the books, tax filers with AGI over $200,000 took in just 30.8% of all AGI.

Adjusted for interstate differences in cost of living as calculated by the nonpartisan Missouri Economic Research and Information Center, the average disposable income per capita in Right to Work states is roughly $2200 higher than the average in forced-unionism states.  And, as the IRS data indicate, this result is a consequence of higher real incomes for the vast majority of people, not for the highest earners.

Five of the six states in which the highest share of all income is taken in by households with $200,000 or more lack Right to Work laws.  In light of this fact, there is certainly no reason to believe forced unionism reduces “income inequality.”  Nevertheless, as Jason Hart recently reported for (see the second link below), at a recent Ohio convention devoted to this topic, several well-heeled union bosses like AFL-CIO czar Richard Trumka boasted about how hard they are fighting to raise middle-income households’ share of all U.S. income. Judging by the record, passage of a national Right to Work law prohibiting forced union dues in all 50 states would better serve this objective than anything Trumka and his cohorts have to recommend.

In states where employees may legally be forced to pay dues or fees to unions affiliated with AFL-CIO czar Richard Trumka’s Big Labor conglomerate, people with incomes under $200,000 take in a significantly lower share of all income than in states where the Right to Work is protected. Image:

Big Labor millionaires lead “income equality” convention

SOI Tax Stats – Historic Table 2