Business and Bathrooms
“Business is booming” could describe any prosperous entity in an almost-post-pandemic era, but it especially describes the state of Texas and its recent economic surge. In the past few years, Texas’s economy has been flourishing. Approximately 50 companies headquartered in Texas make the annual Fortune 500 list, making it the state with the third highest number of these companies and trailing economic powerhouses New York and California by only around three to four depending on the year.1 Moreover, major growth in cities such as Houston (energy), Austin (technology), and Dallas (business and finance), as well as general population growth has enabled Texas to become a new center of economic activity.
While this trend is beneficial, a much more worrying one lies beneath the surface: the ultra-socially conservative push against transgenders. This parallel social trend threatens the strength of Texas’s economic boom. In recent years, governor Greg Abbott has taken an ultra-conservative anti-transgender stance: investigating parents who give gender-affirming medicine to their kids and the less-recent controversy over the “bathroom bill” to limit transgender kids’ access to public bathrooms.2 Such restrictive policies, however, do not just affect kids; they affect their parents and the companies employing their parents. While Texas has gone through an economic boom in spite of such stringent policy moves, the laws that the social right is trying to pass in conjunction with the precedent the movement is setting for the future of social policy might end Texas’s business-induced growth unless drastically changed.
Texas’s growth outpaces the rest of the nation in terms of production, exportation, and real estate value, and these trends are projected to continue. During the height of the pandemic, Texas loosely implemented and followed COVID-19 regulations. The Federal Reserve Bank of Dallas plots multiple data points indicating that many of the state’s indicators –– such as claims for jobless benefits, the unemployment rate, and job growth in general –– are unevenly moving in positive directions but are moving nevertheless, whereas most other states have taken longer to adjust to a post-pandemic world.3 For example, in 2022, Texas is the largest producer of oil and natural gas and the biggest exporting state by volume. Simultaneously, it maintains an extremely hot real estate market and manufactures around a tenth of all of the United States’ manufactured goods.4 As such, it is a state that relies heavily on industry, usually in the form of large companies backing that growth. Texas has experienced an unparalleled economic boom despite the hardships associated with the pandemic.
While robust, Texas’s growth is driven by corporations incentivized to do whatever will maximize profit, including taking progressive stances in order to satisfy customers as is apparent during Black History and Pride months every year. Virtue signaling and “moral capitalism” have improved companies’ images and resulted in increased profits, according to Larry Fink, CEO of BlackRock, though the reasons behind those campaigns might not necessarily be motivated by desire for social change.5 As a result, by implementing socially conservative policies, Texas lawmakers have made their state less attractive to big business and undermined this marketing strategy. More importantly, though, the employees of Texas’s corporations will feel alienated by the restrictive policies that govern their families’ and children’s wellbeing.
Families are the basic unit of society, meaning that if families do not want to move to a state governed by stringent social policies like Texas, then corporations will be similarly disinclined to move to or stay in Texas. For example, Governor Abbott’s recent push to investigate parents who give their children gender-affirming medication for child abuse would likely make potential new Texans turn away from the state. Furthermore, there is already evidence that overly socially conservative policies have made companies hesitant about moving to Texas, meaning this outcome is not an “if” but a “when.”
When Austin announced in 2021 its Texas Heartbeat Act, which prevents abortions after a fetal heartbeat is detected, more than 50 companies signed a joint letter condemning the policy. This act of defiance suggests that corporations either do not feel comfortable with the social direction of the state or feel the economic cost of supporting this policy would turn away too many consumers.6 In the joint letter, the companies explain how the law not only hurts women but also burdens the state with heavy costs, as additional restrictions on abortion are estimated to cost around $15 billion annually.7 Some companies, such as Uber or Austin-based Bumble, have even made company exceptions or started funds to help those affected by the abortion ban. As these policies continue to become more restrictive, the weight of dealing with the policies that hurt their employees and brands will outweigh the benefits of operating in Texas and enjoying its pro-business policies.
It may be objected that given Texas’s historically conservative politics, these new policies are no significant alteration to the status quo and will consequently have little effect on its economy. However, while Texas is a Republican stronghold, the strong push toward anti-LGBTQ policy has only manifested on the House floor in recent years and does not represent conservative stances of the past.
The most glaring example of this anti-trans movement by lawmakers came with Texas v. United States in 2016, a conglomeration of cases related to transgender people using public restrooms that fit their identity. In the wake of these cases, Lieutenant Governor Dan Patrick introduced Senate Bill 6 (the “bathroom bill”) in early 2017, which would have repealed transgender people’s access to bathrooms that conform to their gender identity.9 In doing so, he unleashed a series of restrictive transgender policies––including votes on transgender youth in sports––that were previously unknown to the state.10 As a result, Texas’s historical conservatism can not be extrapolated to conclude that nothing will happen to the economy in the wake of these new socially conservative policies. There is also the argument that socially conservative policies are not bad for the state and could actually help it grow (as Texas lawmakers probably intend), as they argue that a more “morally righteous” society would work better and more efficiently together. However, the corporate backlash, as seen with Uber and Bumble, and the already-estimated costs of anti-transgender policy that amount to up to $8.5 billion in lost revenue challenge the validity of this statement.10
Overall then, the precedent set by lawmakers, the socially conservative route that Texas politicians are heading, and the factors relating to the way in which Texas has grown so far, lead to the conclusion that Texas’s growth may slow down due to Christian-conservative policies as companies become, for various reasons, uncomfortable with staying in Texas despite its economic upsides. Texas can reverse these trends, though, by straying away from the socially conservative policies that appeal to the religious right. In fact, it may be forced to, as the state turns more purple following the pandemic and sees increasing voter turnout for historically non-Republican groups.11
References
1 “U.S. Fortune 500 Companies 2021, by State,” Statista, September 8, 2021, https://www.statista.com/statistics/303696/us-fortune-500-companies-by-state/.
2 Texas v. United States, Civil Rights Litigation Clearinghouse (U.S. District Court for the Northern District of Texas 2016).
3 “Your Texas Economy - Dallasfed.org” (Federal Reserve Bank of Dallas), accessed April 6, 2022, https://www.dallasfed.org/-/media/Documents/research/econdata/texaseconomy.pdf.
4 Ibid.
5 Brett Hurt, “'Woke Capitalism' Is a New Ideology for a Digital Economy,” TechCrunch (TechCrunch, March 2, 2022), https://techcrunch.com/2022/02/09/woke-capitalism-is-a-new-ideology-for-a-digital-economy/
6 Don’t Ban Equality. “Don’t Ban Equality in Texas.” Accessed March 17, 2022. https://dontbanequality.com/dont-ban-equality-2/.
7 Administrator. “Costs of Reproductive Health Restrictions.” IWPR (blog). Accessed March 17, 2022. https://iwpr.org/costs-of-reproductive-health-restrictions/.
8 “Texas v. United States | Civil Rights Litigation Clearinghouse.” Accessed March 17, 2022. https://www.clearinghouse.net/detail.php?id=15392.
9 Lindell, Chuck. “Dan Patrick Unveils Texas Transgender Bathroom Bill.” Austin American-Statesman. Accessed March 17, 2022. https://www.statesman.com/story/news/2017/01/05/dan-patrick-unveils-texas-transgender-bathroom-bill/10378144007/.
10 Ura, Alexa. “Businesses Say Anti-LGBT Bills Could Cost Texas Billions.” The Texas Tribune, December 6, 2016. Accessed March 17, 2022. https://www.texastribune.org/2016/12/06/texas-businesses-say-bathroom-bill-could-cost-texa/.
11 Serwer, Adam. “How Texas Turned Purple.” The Atlantic, November 3, 2020. Accessed March 17, 2022. https://www.theatlantic.com/ideas/archive/2020/11/texas-turning-blue/616978/.