An Economic Analysis of the Adoption of Right-to-Work On Missouri Families

Source: Michael P. Kelsay, Department of Economics, University of Missouri-Kansas City, February 10, 2014

The attempt to pass right-to-work legislation in the State of Missouri is based ostensibly upon the claim that such legislation will increase income, job formation, and business formation in the state. My report shows that the movement to a right-to-work state from a free-to-bargain state for Missouri would result in significant economic losses to Missouri families and taxing jurisdictions. My report further shows that the experience to date is that free-to-bargain states perform uniformly better than right-to-work states across a wide range of socio-economic variables.

• The movement to a right-to-work state from a free-to-bargain state in Missouri would result in a combined direct and induced economic loss to households in Missouri between $1,945 and $2,547 annually per household.
• The movement from a free-to-bargain state to a right-to-work state would cost Missouri workers and their families between $4.58 billion and $6.0 billion annually in lost income as a result of lower wages.
• The movement from a free-to-bargain state to a right-to-work state would cost the state, counties, and local jurisdictions between $82.14 million and $107.56 million annually in lost sales tax collections as a result of lower wages.
• The movement from a free-to-bargain state to a right-to-work state would cost Missouri between $137.28 million and $179.89 million annually in lost state income taxes as a result of lower wages.
• The total economic loss due to movement from a free-to-bargain state to a right-to-work state would cost Missouri workers, families, and taxing authorities between $4.8 billion and $6.28 billion annually in lost wages, state, county, and local sales taxes, and income taxes as a result of lower wages…