Texas is betting that its push to the right on abortion will not create a noticeable backlash from American companies. So far this bet looks like it could be correct.
A law went into effect in Texas last week banning abortions after six weeks of gestation. The Supreme Court declined by 5 to 4 votes to block the law or rule on its constitutionality. The law, known as SB 8, provides no exception to rape or incest and allows individuals to file a lawsuit against anyone who performs an abortion or “knowingly engages in behavior that may precede the abortion for six weeks helps or favors an abortion ”. people even know they are pregnant. It effectively turns anti-abortion activists into vigilante groups, offering them $ 10,000 per abortion if their lawsuits are successful.
Pushed by their customers and employees, large companies and brands in recent years have been more willing to get involved in major social and political issues such as voting rights, racial justice, and immigration. But so far they are silent about the Texan anti-abortion law. Affiliate companies, Austin-based Bumble and Dallas-based Match Group, are some of the few big brands to speak out against the law and take action this month. Lyft followed, then Uber, in part because its drivers are among those who can be sued for driving people to abortions.
Shar Dubey, the CEO of Match Group, which owns platforms like Tinder and Hinge, said in a memo to employees that the company launched a fund to help employees in need of abortion care. "The company does not generally take political positions unless it is relevant to our business," Dubey said in the memo. "But in this case, personally, as a woman in Texas, I couldn't be silent."
In two tweets, Bumble said it would create a relief fund for people seeking abortions in Texas and vowed to "continue to fight regressive laws like SB 8".
Founded and run by women, Bumble has been committed to helping the most vulnerable from day one. We will continue to fight against regressive laws like # SB8.
– Bumble (@bumble) September 1, 2021
Lyft CEO Logan Green said on Twitter that the company will set up a driver defense fund to cover driver legal fees and that the company will donate $ 1 million to Planned Parenthood. He called SB 8 "an attack on women's access to health care and their right to vote". Uber CEO Dara Khosrowshahi also said his company will pay for the drivers' legal fees.
This is an attack on women's access to health care and their right to vote. @Lyft donates $ 1 million to Planned Parenthood to help ensure transportation is never an obstacle to access to health care. We encourage other companies to join us.
– Logan Green (@logangreen) September 3, 2021
Even so, none of the companies responding to the Texas abortion law are leaving the state.
Other large companies seem to be excluding the problem, including American Airlines, AT&T, Exxon, 7-Eleven, Valero, Dell Technologies, and Oracle, all of which are headquartered in Texas. The same goes for Apple and Tesla, both of which have expanded their operations in the state.
Companies were more willing to consider efforts by Republicans in Texas to introduce new laws to restrict voting. In April, Dell Technologies and American Airlines made clear their opposition to voting-restriction laws in Texas.
"As a Texas-based company, we must stand up for the rights of our team members and customers who call Texas home and honor the sacrifices that generations of Americans have made to protect and expand the right to vote," American Airlines said Time. Companies like Microsoft, Salesforce, HP and Patagonia signed a letter in May in which they speak out against voting restrictions. "Freedom will be preserved in our democracy when we hold free and fair elections that protect the fundamental rights of all Texans," the letter said.
After Texas lawmakers passed sweeping voting law last week, American Airlines told the New York Times' DealBook that the company was "hoping for a different outcome" and that it wanted legislation to "make voting easier, not difficult." Dell said it would urge workers to vote and press leaders to "focus on a healthy and welcoming business climate for all Texans," the Times said, and other companies expressed their discontent.
Corporations similarly criticized a voting restriction law passed in Georgia earlier this year; Major League Baseball went so far as to move its all-star game from Atlanta.
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AT&T, or Elon Musk, or Tim Cook, making a statement on the Texas abortion law, is unlikely to have an immediate impact on the law itself, or cause the lawmakers who introduced it to change course in the short term.
But the silence of American companies on this issue is telling. Over the years, companies have become more comfortable talking about controversial topics. However, when it comes to abortion, many of them are still absent. They pretend to care about gender equality and this is a gender equality issue. But that's not how they treat Texan law.
Companies participate in many topics. So why not an abortion?
For years companies have stayed away from sensitive political and social issues for fear of alienating consumers. But that has changed in the last decade: many Americans expect companies to take a stand on a number of issues, including guns, elections, racial prejudice, and LGBTQ rights.
"It's not uncommon for companies to comment on issues that are directly related to their bottom line," said Brayden King, professor of management and organizations at Northwestern University's Kellogg School of Management. "What seems pretty new in the last five or six years is what we call progressive corporate activism."
The pressure comes from outside, from consumers, but also internally from workers. “A lot of companies have formulated values and try to create cultures that emphasize diversity, inclusion and openness to a general kind of diversity of all kinds, and I think if a state or even a country does something that violates those values, they want these employees "have a company to say," King said.
But companies seem unsure of how to deal with Texas' abortion law in the face of their silence.
In an interview with CNBC last week, Texas Governor Greg Abbott said there are "many companies" that like "the social positions that the state of Texas holds". He specifically quoted Texas CEO Elon Musk. "Elon had to leave California because he had some of the social policy in California, and Elon keeps telling me that he likes the social policy in the state of Texas," he said.
Musk reacted somewhat cryptically on Twitter, saying that he believed the government should "seldom impose its will on the people," but that he was "staying out of politics." Tesla did not respond to a request for comment from Vox.
In general, I believe that government should seldom impose its will on the people while striving to maximize their cumulative happiness. Still, I would prefer to stay out of politics.
– Elon Musk (@elonmusk) September 2, 2021
As Axios 'Dan Primack pointed out, many business leaders and CEOs might endorse Texas' abortion law, but other factors are more likely to play a role. Organizations may simply be afraid to take a stand, or, as Primack writes, male leaders just aren't as concerned as female leaders, and there are more male leaders than women. The people at the top of Bumble and Match Group are women. The basis of Bumble's business is that it is a women-friendly platform. In the case of Lyft and Uber, the law has a direct impact on their business.
Website host GoDaddy said it will stop hosting a whistleblower website run by an anti-abortion group in Texas after coming under public pressure.
In 2019, nearly 200 CEOs signed a letter against laws restricting women's access to reproductive care, including abortion, after Alabama and other states tried to introduce restrictive abortion laws. Jen Stark, senior director of corporate strategy for the Tara Health Foundation, who helped companies sign the letter, told Fortune that getting companies to speak out has not been easy since then. "If you don't feel the pressure, try to leave the watch off as long as possible," she said.
Some companies funded candidates who supported the abortion law. According to the women's activist group UltraViolet, sponsors of the law received donations from AT&T, Chevron, Charter Communications, and Berkshire Hathaway, among others.
Corporations may rethink their Texas plans, although that's not certain
Texas has gone to great lengths in recent years to attract businesses and workers. Bloomberg notes that the state has attracted around 4 million people over the past 10 years with low taxes and a lack of regulations. Charles Schwab, Hewlett Packard Enterprise and Oracle, among others, recently relocated their headquarters from California to Texas. Podcaster Joe Rogan and Tesla boss Elon Musk have also moved there.
"Texas does very well at attracting businesses for a number of reasons including the available workforce, business climate, cost structure and the hard work of economic development professionals across the state," said Ray Perryman, president and CEO of Perryman Group, one in Waco resident economic research group, in an email to Vox. "For many companies, the very high operating and tax costs in states like California make Texas a very attractive option, and we continue to see many companies moving here."
In the CNBC interview, Abbott extolled Texas’s ability to attract businesses and workers and expressed a confidence that would not change. “People vote with their feet, and that doesn't hold back the companies coming to the state of Texas at all,” he said.
But it is not certain that this pattern will last. Many of the workers Texas seeks to attract are college graduates with a tendency to liberal views. You may not want to move to a state where Republicans are restricting elections, abortions and putting public health at risk by actively fighting basic safety measures for Covid-19.
"Other states are competing for people," Tammi Wallace, chief executive officer of the LGBT Chamber of Commerce Greater Houston, told Bloomberg. "If you look at what our state is doing and then you see another state that they don't do some of these things, you might say, 'Well the money is good, but where do I want to raise my family?' ; ”
Perryman said there is a point where policy decisions and negative attention could make a difference to the Texan economy, even if it is just a matter of slowing growth a bit. "We looked at many of these issues that Texas had controversial policies on and found time and again to have a negative impact," he said.
In a report by his group on electoral restrictions, analysts found that restricting voter access can harm the economy due to loss of income and lower consumer spending, and that controversial laws can affect travel and tourism, as well as overall economic development. They estimate that electoral restrictions could cost Texas nearly $ 15 billion in annual gross product by 2025. They also note that the state, ignoring Covid-19's security measures, will reduce economic performance and cost employers money when people cannot go back to work due to the pandemic.
Even if companies fail to comment now or leave Texas, if they avoid doing so later, it could have economic repercussions and potentially scare Republican politicians into a change of course. “The opinions of corporations and knowledge workers can definitely make a difference, even if they are indirect or difficult to recognize at first glance. Many state lawmakers are fully aware of company opinions, and hopefully that awareness will influence policy over time, ”Perryman said.
Whether companies should move out of Texas or cancel events is not a question with simple answers. Amid the turmoil over electoral laws in Georgia, some people urged companies to pull out of the state while others warned that doing so would do economic harm to the very people they were trying to help. "Leaving us behind with boycotts is not going to save us," former gubernatorial candidate and voting rights activist Stacey Abrams wrote in a comment to USA Today at the time.
When people talk about the effectiveness of companies taking a stand on a political issue and actually making a difference, the most prominent example they frequently use is the North Carolina Bathroom Act in 2016. It banned transgender people from using toilets in the state to use their gender identity. After the bill was passed, PayPal and Deutsche Bank canceled their expansion plans in the state, and both the NBA and NCAA canceled events there. The law was repealed in 2017.
King said many people point to corporate backlash as the reason for repealing the law, but they also often forget about the political forces at play. Voter opposition to the bill resulted in the ousting of the Republican governor who signed it, and it was repealed under his Democratic successor. "There were some major political realignment issues in the state before the transition, so this was probably a more direct cause," he said.
It's not clear right now whether companies making a statement on the Texan anti-abortion law would make a difference in the state right now, although more direct action like lobbying or serious deliberations on withdrawing from the state could do so. Regardless, corporate activism – like any activism – can be helpful in raising awareness and showing that it is important.
State lawmakers and governors in places like Georgia and Texas are likely to wait and see if the backlash to their controversial new laws affects their states' economies. If it seems that business leaders are talking more than they are acting, lawmakers can simply wait, let the criticism wane, and move on. The Texas abortion law is little talked about.