Once again, discrimination proves to be bad for business.
Two studies from the Texas Association of Business (TAB) estimate that Texas’ economy could potentially lose $8.5 billion and nearly 200,000 jobs if lawmakers pass an anti-transgender bathroom bill or other anti-LGBT legislation.
The research is part of a Texas-based coalition called “Keep Texas Open for Business,” a group of businesses opposed to discriminatory legislation that will drive away potential talent and revenue.
The law in question focuses on amendments to the United States’ Religious Freedom Restoration Act (RFRA), parts of which the Supreme Court deemed unconstitutional nearly two decades ago. The RFRA allows businesses to discriminate under the guise of religious freedom, and new legislation would strengthen this law.
In addition, this past July, Texas Attorney General Ken Paxton filed a motion to block President Barack Obama’s directive instructing schools to let transgender students use the bathroom that aligns with their gender identity.
Researchers at St. Edward’s University, located in Austin, Texas, conducted the two studies, of which the data was pooled together for the report. The studies took analyzed data on Texas business’ attitudes toward the issue as well as how similar legislation has economically impacted other states.
Potentially, according to the report, “Keep Texas Open for Business: The Economic Impact of Discriminatory Legislation on the State of Texas,” the legislation could result in:
• A loss of anywhere between $964 million and $8.5 billion in state GDP
• The loss of 185,000 jobs
• Difficulty attracting, recruiting and retaining high potential talent, particularly millennial talent
• Drastically impact convention and tourism industry (which carries a $69 billion impact alone, the research estimates)
• Drive away large global businesses, including Marriott International (No. 9 on the DiversityInc 2016 Top 50 Companies for Diversity list)
And, “such legislation could exact significant economic and social costs and have direct and lasting impacts on the state’s ability to recruit and retain business and attract a talented, vibrant workforce.”
The report also compared similar scenarios in other states to what that could possibly signify for Texas. It looked at the high profile economic impact that the religious freedom law had in North Carolina, which cost the state a short-term loss of about $1.5 billion.
Should the legislation pass in Texas, researchers hypothesize the state could lose about $8.5 billion, the report states:
• San Antonio is slated to host the 2018 NCAA Men’s Final Four tournament. The 2014 tournament in Arlington generated almost $277 million in revenue. Even a boycott-related reduction of 3 percent would equate to more than $8 million in losses for the city (Schrock, 2015).
• Given that the Texas travel industry has a $31 billion annual impact, a 15 percent reduction would result in an overall loss of $8.5 billion, or 0.5% of the State GDP, the same percentage GDP loss experienced by Indiana.
• This equates to the loss of more than 150,000 jobs
“Discriminatory legislation is bad for business. Our economic study points to the dire and far-reaching impact of discriminatory legislation on Texas businesses, our communities, families, jobs and the larger state economy,” said Chris Wallace, president of TAB. “We must Keep Texas Open for Business. We cannot slam the door on the Texas Miracle of openness, competitiveness, economic opportunity and innovation.”
State Rep. Sarah Davis (R-Houston) also weighed in and said the state needs to focus on other issues rather than discriminating against its own citizens and patrons of businesses.
“Texas needs to continue to strive for excellence in education, infrastructure, and health,” Davis said. “Those priorities — not divisive issues that won’t move our state forward — deserve our time and attention. We need to protect our tourism industry, attract investment, and provide a healthy environment for small businesses to thrive. I stand with the business community in their commitment to safeguarding the economic health of the Lone Star State.”
The report also describes Texas Competes, a coalition of business leaders from large companies that are dedicated to “a Texas that is economically vibrant and welcoming of all people.” About 1,200 companies signed the Texas Competes Pledge, including Top 50 Companies Marriott, IBM (No. 20), Dell (No. 28), Allstate Insurance Company (No. 35) and Hilton Worldwide (No. 42). The report also cites Marriott CEO Arne Sorenson and Randall Stephenson, CEO of AT&T (No. 4), who have both said discrimination is “bad for business.”