Is Pro-Life Bad for Business?

Shortly after Indiana passed a new law restricting abortion, Indianapolis-based pharmaceutical giant Eli Lilly condemned the law and announced that it would seek to expand outside the state.

It’s widely argued that social conservative policy is bad for business. Is that actually true, as the Lilly statement would seem to suggest? At some level, yes. But the impact is less than some claim. Today, social policy is a relatively marginal factor in business location decisions.

In 2002 economist Richard Florida published his book The Rise of the Creative Class that became the most influential book on urban policy of the 21^st century to date. He argued that economic success required attracting “creatives,” and he summed up the formula under the heading of three interrelated T’s: technology, talent, and tolerance. Tolerance meant being open to a diversity of people and lifestyles. As he wrote in a follow-up a decade after the book came out, “Our work finds a strong correlation between, one the one hand, places that are welcoming to immigrants, artists, gays, bohemians, and socioeconomic and racial integration, and, on the other, places that experience high-quality economic growth.”

He particularly became known for linking economic success to a high score on the “gay index” created by another researcher. He stressed that nothing about gays per se drove success, but that gays were a proxy for overall tolerance; a city where gays felt welcome was probably one in which other groups felt welcome too.

Florida’s book was probably the single most influential work in convincing state and local leaders of the importance of talent, of human capital, for economic development. It also led many to believe that attracting talent required socially progressive policies.

His model was very powerful and persuasive in that era. This was when big, coastal “superstar” cities like New York and San Francisco were coming into their own after recovering from decades of decline. The dotcom era had just occurred, and high tech had exploded in the Bay Area. There really was wide variation in gay friendliness between cities at that time, which is why gays tended to congregate publicly in only a limited number of cities in America. Many cities in fact did not have many immigrants and not much diversity beyond a longstanding white-black two race mix.

Today, things are different. Most urban areas are very socially progressive, even in red states like Indiana. And their level of diversity has grown. The city of Indianapolis is now only 53% white, for example, and will soon be a majority minority city. Also, we see that the previously high-flying coastal cities and states are struggling with a variety of serious and pervasive governance dysfunctions: rising crime, homelessness, sky high housing prices and an inability to build sufficient new housing, unreliable transit systems, prosecutors who publicly announce they won’t enforce laws, long term school closures, a suffocating woke hegemony, etc. This is sending people and business heading for the exits.

This time, the migration is sometimes going to places with very socially conservative red state governance, including Texas and Florida, which have boomed even as they have passed socially conservative laws. And unlike the traditional middle class Sunbelt draw, this now includes high-end business and the wealthy elite. For example, high finance, a very socially liberal industry, has been migrating to greater Miami.  The asset manager BlackRock, one of the major promoters of the progressive Environmental, Social, and Governance (ESG) movement in corporate America, is opening an office in West Palm Beach. Elliott Capital Management, a huge hedge fund run by Paul Singer, one of America’s biggest promoters of LGBT rights, is moving its headquarters to West Palm Beach as well. Many other finance and venture capital companies have been making similar moves. All of this is happening despite prominent socially conservative moves by Florida Governor Ron DeSantis and the state legislature.

Read the rest of this piece on American Reformer.

Aaron M. Renn is an opinion-leading urban analyst, consultant, speaker and writer on a mission to help America's cities and people thrive and find real success in the 21st century. He focuses on urban, economic development and infrastructure policy in the greater American Midwest. He also regularly contributes to and is cited by national and global media outlets, and his work has appeared in many publications, including the The Guardian, The New York Times and The Washington Post.

Photo: Sean Pollock via Unsplash.