States with abortion bans risk losing their economic edge

As a group of conservative states enacted severe abortion restrictions last year, Illinois Gov. J.B. Pritzker sent letters to a handful of corporate executives with close ties to Texas.

Pritzker, a Democrat, urged executives to rethink basing their companies in “a state that strips its residents of their dignity.” Most workers, he wrote, did not want to live under a rigid abortion ban.

There was no immediate response to his overture. Companies thriving in Texas’ freewheeling business environment were not about to flee because of legally contested abortion regulations that were not certain to be enforced.

Ten months later, the political and legal landscape is radically different. And a Supreme Court decision that abolished the right to an abortion is now threatening to reshape the lines of economic competition between conservative and liberal states.

For companies anchored in economically vibrant conservative states such as Texas, Tennessee and Georgia, the rollback of women’s rights is no longer a hypothetical scenario but an immediate challenge. It represents a potential disruption to the calculus that has made Republican-led Sun Belt states a draw for big companies, which have tended to embrace the reduced taxes and regulations while treating local social policy as something of a sideshow.

That bargain may have grown more difficult in states that have imposed punitive abortion restrictions, banning the procedure altogether or limiting it nearly to the point of elimination.

Some of the country’s biggest businesses, including JPMorgan Chase, AT&T and The Walt Disney Co., have already announced they would take steps to help employees who need abortion access but cannot obtain it in their home states. There have not yet been major announcements about companies canceling expansions or relocating offices out of jurisdictions where abortion is now banned.

In states such as Texas and Georgia, Republican lawmakers are effectively wagering that the local business environment will remain appealing enough to overcome concerns about women’s rights. And to some conservative politicians, the risk of alienating business investment is a price worth paying to eradicate abortion.

The fallout of the Supreme Court’s ruling could be more dangerous for states that share Texas’ economic and social policies but lack its long-standing status as an economic powerhouse — states such as Arkansas and Oklahoma, which have passed some of the most restrictive abortion bans in the country.

In places where pitched battles over abortion laws are now underway, some business leaders are urging politicians to proceed with caution.

“An extreme response is not in the state’s competitive interest,” said Sandy Baruah, president of the Detroit Regional Chamber, an influential business association in Michigan. “To the extent that the data shows today that young professionals care about this issue, I don’t want to give young professionals a reason not to come to Michigan to work for Michigan companies.”

Baruah’s group responded to the Supreme Court’s decision with a statement imploring state officials not to do anything that could make Michigan less hospitable for business recruitment. The state’s Democratic governor, Gretchen Whitmer, and Republican-controlled Legislature are currently clashing over the fate of a nearly century-old abortion ban that had been voided by Roe v. Wade but never formally repealed.

Baruah acknowledged that some states, like Texas, might be so well established as business havens that they could shrug off concerns about abortion rights and talent recruitment. Of his own state, Baruah said: “Michigan needs every advantage it can get.”(BEGIN OPTIONAL TRIM.)North Carolina Gov. Roy Cooper, a Democrat, gave a similar warning Wednesday as he issued an executive order reinforcing abortion rights in the state. Cooper, who has vowed to veto any abortion ban approved by the Republican Legislature, said any such measure “would have a negative effect on economic growth here in our state.”

(END OPTIONAL TRIM.)Some Republican-controlled states that have already imposed limits on abortions, like Florida and South Carolina, are weighing whether to tighten them even further. In Florida, Gov. Ron DeSantis, perhaps the most prominent conservative governor, has enacted a 15-week ban, but some state legislators are pushing for a so-called heartbeat bill that would block all but the earliest abortions.

Gina Raimondo, the nation’s commerce secretary, said in an interview that the states imposing rigid abortion bans were all but certain to suffer economically.

“I’ve spoken to CEOs who are rethinking those states,” said Raimondo, a Democrat. “I think the cumulative effect will, over time, develop to be quite significant.”(BEGIN OPTIONAL TRIM.)Big companies are fighting a “war for talent,” Raimondo said, and particularly for female talent, given that women make up a growing majority of new college graduates. A former governor of Rhode Island, Raimondo predicted that companies would find it difficult to recruit skilled workers in states where women’s rights and medical services were sharply curtailed.

There is data to back up that view: A survey published this month by the Pew Research Center found that more than 3 in 5 people with college and postgraduate degrees disapproved of the Supreme Court’s decision, along with nearly 70% of people younger than 30. Sixty-two percent of women disapproved of the decision, according to the survey.

A young and educated cohort of workers has been pushing companies in recent years to be more vocal in speaking out on issues of broad social concern, including gay rights and racial justice, bringing some major corporations into conflict with the conservative-leaning states they call home.

Some liberal states are already depicting their abortion rights policies as a business advantage, reinforcing the appeal of the wealthier and more progressive states that many businesses opt to call home despite their taxes.

In Massachusetts, Gov. Charlie Baker, a Republican, suggested that companies should consider his state’s ironclad abortion rights protections as an inducement to expand there. Pritzker, a billionaire venture capitalist before entering politics, said in a recent interview that his administration was including information about Illinois’ permissive abortion laws in its recruitment pitch to companies, particularly since the court’s draft opinion leaked in a Politico article in early May.

As a political matter, Pritzker urged Democrats to lean into the message that abortion restrictions were bad for the economy.

“A Democratic president and vice president, Democrats more broadly, should be talking about this first as an issue of individual rights and freedom, and second as an economic issue,” he said. “Workers care about this.”

This is not the first time in recent years when right-wing social policies have thrown state-level business competition into turmoil. In 2016, Republican lawmakers in North Carolina triggered a multiyear business boycott by passing a law — known as the “bathroom bill” — requiring transgender people to use facilities that matched the gender they were assigned at birth. Two years earlier, the business community in Arizona mobilized in force against so-called religious freedom legislation that could have opened the door to discrimination against LGBTQ people.

In Virginia, a 2012 attempt by far-right legislators to mandate that women receive invasive ultrasounds before obtaining an abortion caused outrage among moderate voters and corporate leaders, helping vault a pro-business Democrat into the governorship the next year. In 2011, the Mississippi business community rallied to defeat a proposed state constitutional amendment that would have granted legal rights to a fertilized egg, defying the Roe v. Wade decision that was then in place.

Yet, even amid that drumbeat of controversy, a handful of big, conservative-leaning states such as Texas, Florida and Georgia have defied predictions that anti-gay policies or laissez-faire gun laws would deter new investment. Indeed, Republican governors have recently grown more willing to defy big business: When Disney recently expressed disapproval of a Florida law limiting discussion of sexual orientation and gender identity in schools, DeSantis responded with a blistering attack.

Scott Reed, a Republican strategist who served as a top official at the U.S. Chamber of Commerce, questioned whether the abortion laws would do much to undermine the economic appeal of conservative states.

“These red states with low taxes, low regulation, investments in education and roads — that’s the real contrast with these older blue states that are kind of falling apart,” Reed said.

There is no recent precedent, however, for a rightward lurch in state-level policy on the scale of the crackdown on abortion that is now underway across much of the United States. The full impact of new restrictions is still uncertain in many states, and some bans are riddled with questions about how they will be enforced. A few, including Oklahoma’s total ban on abortion, appear to be so sweeping that they could imperil other kinds of reproductive care, including certain fertility treatments.

In Texas, the biggest and most prosperous state where abortion is now illegal, business leaders are expressing guarded optimism that the state’s economy can weather any backlash. Equipment manufacturer Caterpillar announced in mid-June that it was relocating its headquarters from Illinois to Texas, even though the court’s draft opinion had been published at that point.

Glenn Hamer, president of the Texas Association of Business, said the state’s core appeal to big corporations was still intact.

“The fundamentals of the Texas economy and the Texas workforce remain very strong, and I would expect continued strong growth well into the future,” said Hamer, whose organization has not taken a position on the state’s abortion laws.

Texas Gov. Greg Abbott, a Republican, has professed no concern about abortion restrictions deterring business investment. In an email, Renae Eze, a spokesperson for the governor, boasted of the state’s “unmatched competitive advantages,” including “no corporate or personal income taxes, a predictable regulatory climate and a young, growing and skilled workforce.”

Rachel Smith, the president of the Seattle Metropolitan Chamber of Commerce, said the patchwork of state abortion bans would strain big companies with employees in multiple jurisdictions and clashing local laws. Smith, whose organization represents companies including Amazon and Microsoft, said many recruits viewed medical care — including top-flight reproductive medicine — as a “foundational” concern in choosing their workplace.

“Was it taken for granted in a lot of places? Sure — I’m sure it was,” Smith said. “Is access to more comprehensive health care now at the top of the list for more people? I’m sure it is. The changes are causing people to be more deliberate.”This article originally appeared in The New York Times.

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