Recruit businesses from red states

Democrats look to recruit businesses from red states restricting abortion

Is abortion care enough to give up tax breaks?

By LARA KORTE

Blue-state governors have a new business recruiting tool: abortion.

The Supreme Court’s decision to overturn Roe vs. Wade has Democratic leaders trying to flip the script on low-tax red states, hoping to entice businesses whose employees don’t want to live with restrictions on their reproductive freedoms.

The Golden State has long endured needling from Republicans and some business owners who criticize California’s less-than-friendly corporate conditions. Most notably, Tesla CEO Elon Musk has lamented that it is now a land of “overregulation, overlitigation, overtaxation,” and last year decided to relocate the headquarters of his high-profile, massive electric car company from California’s Silicon Valley to tech boomtown Austin, Texas — a state without personal income taxes.

But now, with abortion outlawed in 13 states, including Texas, California Gov. Gavin Newsom said businesses should reconsider setting up shop where their employees can’t access the full scope of reproductive health care. Next year’s state budget, set to be enacted this week, includes business incentives that give extra consideration to companies coming from states that discriminate against LGBTQ people and those that restrict abortion rights.

“We’ve got your back, but come back,” Newsom said at a news conference Friday, the day of the Supreme Court ruling. “Some of you may have left the state, come on back. Some businesses may have left, come on back. It’s a point of pride that we welcome you back, we want to celebrate that we have you back.”

Democratic governors in states including Illinois, Connecticut and New Jersey have made similar pitches to companies in red states, touting their own social programs and liberal policies as reasons they’re a great place to grow a business. New Jersey Gov. Phil Murphy recently sent letters to businesses in Georgia and elsewhere, saying the ruling would hamper their ability to “attract and retain top female talent,” as first reported by the Atlanta Journal-Constitution.

Whether it will work, however, is a different question.

The idea that a business would move to a blue state because of abortion access is “just nonsensical,” said Christopher Thornberg, founder of Beacon Economics and an expert in economic forecasting who has advised both the California treasurer’s and controller’s offices.

“Businesses don’t locate somewhere because of abortion access or not,” he said. “Where you locate is a function of 100 things, and that is such a trivial part of the conversation.”

But blue states are still making the pitch. The recruitment tactic picked up last year, after Texas passed a law effectively deputizing the public to enforce a ban on abortions after six weeks of pregnancy. At that time, officials in Connecticut, Illinois and elsewhere tried to sell Texas companies on the benefits of their own states — where abortion is still legal.

“We don’t have oil and natural gas, but we have one of the most productive, best trained, most innovative workforces in the world. And that starts with the fact that we have more women participating in our workforce than just about anywhere else,” Connecticut Gov. Ned Lamont said in a September video plea to companies.

“Look, any of you business owners thinking about making a move — give me a call.”

For Democratic leaders, it’s not only an opportunity to bring revenue and economic development to their states, but also a chance to snub political rivals who assailed their business climates during the pandemic. After enduring criticism about shutting down businesses to stop the spread of Covid-19, Democrats are now eager to point out how Republican policies could hurt business in their states.

A number of companies, reacting to the Supreme Court’s draft decision in May, said they would pay for employees to travel for abortions if their states didn’t allow it, including Starbucks, Tesla, Yelp, Airbnb, Netflix, Patagonia, DoorDash, JPMorgan Chase, Levi Strauss & Co. and Reddit.

Lyft CEO Logan Green responded to abortion restrictions in Oklahoma and Texas by promising to cover legal fees for rideshare drivers who might be sued for transporting an abortion patient. Green said the company would pay for travel costs for employees who have to travel more than 100 miles to find an in-network abortion provider.

In response, some Texas Republican lawmakers, led by state Rep. Briscoe Cain, are considering legislation that would exile businesses from the state if they choose to pay for abortions outside of Texas. Cain has even gone after Tesla, which has joined the likes of Starbucks, Yelp, Airbnb, Netflix, Patagonia and more in agreeing to pay for employees’ travel costs if they have to leave the state for abortions.

“Dear Elon Musk, If Tesla is paying for employees to travel outside of Texas to get abortions, please put an end to the practice,” Cain wrote on Twitter in May. “Texas would be happy to have Tesla’s headquarters located here, but not if Tesla is helping kill babies and hurt women.”

So far, no major companies have indicated a relocation is in the works — even those issuing forceful statements decrying their states’ abortion bans. But that could become a tougher decision if Republican lawmakers start penalizing businesses that pay for their employees’ out-of-state abortions.

Rachel Greszler, a senior research fellow for the Heritage Foundation, a conservative think tank based in Washington, said the Roe decision is unlikely to reverse the trend of companies “flocking” to red states, which offer comparatively lower taxes and fewer regulations.

Those economic benefits, she argued, far outweigh abortion access for employees.

“If you were to add up all the costs, even if you paid for ever single female employee [to travel for abortion],” she said, “I don’t think that you could get to a point where it would make economic sense to relocate to one of these blue states.”