Passage of Indiana’s Religious Freedom Restoration Act engulfed the state in controversy last week. Supporters on the right say it champions religious liberty, while detractors on the left say it would allow businesses to discriminate against the LGBT community.
No matter what the law actually means, one thing is certain: the controversy is bad for business.
Taking advantage of the outcry, political leaders across the country, including Chicago Mayor Rahm Emanuel and Virginia Gov. Terry McAuliffe, pitched their states as possible sites for relocation to business owners unhappy with its passage.
In an open letter to businesses in Indiana, McAuliffe wrote, “In Virginia, we do not discriminate against our friends and neighbors, particularly those who are supporting local businesses and generating economic activity.” In New York, Gov. Andrew Cuomo banned non-essential travel by state workers to Indiana.
Even worse for the law’s supporters, a long list of business and organizations openly condemned the law.
The business backlash has involved some of the state’s biggest corporate names. On Saturday, Indianapolis-based Angie’s List said it would cancel a $40 million headquarters expansion, specifically citing the act as its reason, according to the Indianapolis Star. The expansion was expected to add 1,000 jobs over five years.
The state’s largest publicly traded company, drug maker Eli Lilly, declared that the new law was “bad for Indiana, and bad for business.”
NCAA President Mark Emmert reacted negatively to the law on Monday as well. He said the law could impact future decisions to host events in the state, saying, “We’re going to have to sit down and make judgments about whether or not it changes the environment for us doing our work and for us holding events.”
The NCAA is set to start the Final Four of its men’s basketball tournament in Indianapolis this week. The city is also scheduled to host the women’s Final Four next year, and the organization has official offices downtown.
Nationally, Apple CEO Tim Cook wrote an op-ed piece for The Washington Post, saying the Indiana bill and others like it are part of a “very dangerous” trend across the country. Looking at it from a business perspective, Cook wrote, “These bills under consideration truly will hurt jobs, growth and the economic vibrancy of parts of the country where a 21st-century economy was once welcomed with open arms.”
As our own Micheline Maynard points out for Forbes, tech and other innovative businesses drove the revitalization of Indianapolis and Indiana’s economy. These industries have diversified the population, attracting members of the LGBT community and their supporters. The city’s mayor says the law sends the wrong message, while the Indianapolis Chamber of Commerce is declaring, “Indy is open to all.”
Now, Indiana Gov. Mike Pence promises to act in order to reassure that the law was not intended to legalize discrimination. Whether that will cure the state’s long-term perception or not, it’s clear that the threat of losing so much money from the economy is putting pressure on state politicians to change, or at least clarify, the measure.
Some 20 states across the country have similar laws, so for story ideas, find out what your state’s statute says. You can also check with chambers of commerce, LGBT groups and religious groups to see whether any protests, pro or con the law, are planned.