Commentary: Cost of Forced Unionism Soars by over 50 Percent

by Stan Greer


For decades, states like New York, California and Illinois have evidently been paying a high price for allowing dues-hungry labor union bosses to continue getting workers fired for refusal to bankroll their organizations.  Year after year, far more taxpayers have been leaving forced-unionism states than have been moving into them.  The cumulative loss of taxpayers has been cutting into their revenue bases.

Recently released data from the Internal Revenue Service (IRS) indicate the cost of forced unionism soared by more than 50% in the Tax Filing Year 2019, compared to the year before.

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, California and Illinois acknowledge the truth about the devastating effects of forced unionism.

The facts speak for themselves.

As a group, the 23 states that still lack Right to Work laws lost a net total of $48.1 billion in adjusted gross income (AGI) to domestic outmigration from 2019 to 2020.  That’s a 54% greater loss than what these same states endured from 2018 to 2019.

Data furnished by the IRS’s Statistics of Income (SOI) division make it possible to calculate the sum total of wages, salaries and other income taxpayers take with them when they move from one state to another.  The SOI also records the number of personal income tax filers who move (typically with their dependents) across state lines, based on address changes in their tax returns.  The latest available data cover incomes for 2019, as reported to the IRS in forms filed in 2020.

They show that a total of 1.633 million tax filers were residing in a forced-unionism state in 2020, after residing somewhere else in the U.S. in 2019.  Meanwhile, 1.936 million tax filers were residing in a forced-dues state in 2019, but filed from somewhere else in the U.S. in 2020.  That means a net total of roughly 303,000 tax filers moved from a forced-unionism state to a Right to Work state between 2019 and 2020. This represents a sharp increase over forced-dues states’ net loss of roughly 212,000 tax filers between 2018 and 2019.

Personal income tax filers moving out of a forced-unionism state between 2019 and 2020 reported a total of $182.0 billion in annual income on the IRS forms they filed in 2020, or $94,004 per filer.  Tax filers moving into a forced-unionism state reported a total of $133.9 billion in income, or $81,642 per filer.

Both because of their substantial taxpayer losses due to net domestic out-migration, and because the tax filers they gained reported $12,362 less income apiece than the tax filers they lost, forced-unionism states lost a total of $48.1 billion in AGI in 2020, compared to $31.3 billion the year before.

All of the nine states (New York, California, Illinois, Massachusetts, New Jersey, Maryland, Ohio, Minnesota and Pennsylvania) suffering the worst losses of income, in absolute terms, due to taxpayer out-migration from 2019 to 2020 lack Right to Work laws. Meanwhile, the seven states enjoying the biggest absolute gains in income due to taxpayer in-migration (Florida, Texas, Arizona, North Carolina, South Carolina, Tennessee and Nevada) are all Right to Work.

Over the past nine years for which SOI data are available, the 23 remaining compulsory-unionism states collectively lost a total of $226.3 billion in adjusted gross income.  And unless they fundamentally reform how they operate the rush for the exits is likely to be far greater over the decade from 2020 to 2030.

The trend should be alarming for elected officials like New York Gov. Kathy Hochul (D), California Gov. Gavin Newsom (D), and Illinois Gov. J.B. Pritzker (D).  From 2011 to 2015, the 23 states that still lack Right to Work laws today lost a total of $64.3 billion in AGI to net domestic outmigration.  From 2015 to 2019, that soared to $113.9 billion, or an average of $28.5 billion a year.  In the most recent year for which data are available the loss was $48.1 billion.

And the 2019-20 SOI data barely reflect the impact of diverse state responses to COVID-19.  Already available Census data for 2021 show that the outflow of all kinds of people (not just federal tax filers and their families) from forced-dues states accelerated greatly as a consequence of the ham-fisted and prolonged lockdowns imposed on businesses and schools to which they commonly resorted.

Early indications are the exodus from forced-unionism New York is continuing this year, even though the tight restrictions imposed during the COVID-19 pandemic have been greatly eased if not eliminated.

Moreover, the migration data furnished by the IRS pointing to a probable cumulative AGI loss in excess of $280 billion during the decade that is now drawing to a close do not convey how much taxpayers who flee forced-unionism states earn any later than the year of their move.

The actual financial cost endured by Big Labor-ruled states compounds as it recurs, year after year.  The accumulated net loss for the current decade, including income reported by taxpayers in all years subsequent to their migration, cannot be calculated, but will very likely be at least four times as high as what the IRS data are revealing.  That comes to a cumulative loss of over a trillion dollars from 2010 to 2020.

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

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Stan Greer is senior research associate at the National Institute for Labor Relations Research.





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