The end of abortion rights for huge swaths of America is going to have an “enormous” impact on the economy, the experts say, and not in a good way. “This decision will cause immediate economic pain in 26 states where abortion bans are most likely and where people already face lower wages, less worker power, and limited access to health care,” Heidi Shierholz, president of the Economic Policy Institute, said in a statement released Friday. “The fall of Roe will be an additional economic barricade.”
It’s not hard to figure out why. Treasury Secretary Janet Yellen spelled it out for the Senate Banking Committee last month. “Roe v. Wade and access to reproductive health care, including abortion, helped lead to increased labor force participation,” Yellen said. “It enabled many women to finish school. That increased their earning potential.” It also provided an educated, motivated chunk of the workforce.
A number of blue states are banking on large businesses recognizing all of that. While blue states are seeking to become safe havens for people who need abortions, they are also seeking to become safe havens for companies who want to protect—and keep—their valuable workforce. At a news conference Friday, California Gov. Gavin Newsom along with other state officials detailed what the state has done so far to protect abortion rights, and promised: “I will be signing over a dozen of pieces of legislation in a matter of weeks that will codify our values.” That includes incentives for businesses to either return to California or set up shop there anew.
“We’ve got your back, but come back,” Newsom said. “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.” The state’s 2023 budget, which will be enacted this week, already includes incentives for businesses to relocate from states that don’t protect abortion and LGBTQ rights.
Connecticut’s Gov. Ned Lamont issued a similar appeal last year, when the writing was on the wall with the Supreme Court. “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,” he said in a September video. “Look, any of you business owners thinking about making a move—give me a call.”
Plenty of companies have promised that they’ll make sure their employees can travel if necessary to get abortions, including Starbucks, Tesla, Yelp, Airbnb, Netflix, Patagonia, DoorDash, JPMorgan Chase, Levi Strauss & Co. and Reddit. For those employees, however, actual relocation to a safe state is a better bet. They’d not just get abortion protections, but likely would get stronger worker protections all the way around.
Kate Bahn, one of the economists who signed an amicus brief in the Dobbs v. Jackson Women’s Health Organization wrote about that for MSNBC. “Bodily autonomy interacts with self-determination across society, including the economy,” she said. “When workers of any gender don’t have a voice or control over their lives, they are disempowered in the labor market, too—and this can have a negative effect on the American economy writ-large.”
An economy where workers don’t have power is also one rife with market failures. Declining worker power has exacerbated - https://equitablegrowth.org/kate-bahn-testimony-before-the-select-committee-on-economic-disparity-and-fairness-in-growth-on-imbalance-of-power/ - monopsony -, where workers are paid less than the value they create. This then distorts the economy, as it suffers from deadweight loss and operates under its potential. In this way, giving workers more power over their lives and jobs is corrective; when the economy is balanced to give workers more power, economic outcomes improve.
The effect is already in play in the U.S. Pre-pandemic, Brookings Institute -surveyed the economies of congressional districts from 2008-2018, and found that “red and blue America experiencing two different economies, but those economies are diverging fast.” It wasn’t looking good for red America.
In personal, household income, Democratic districts saw an increase from $54,000 in 2008 to $61,000 in 2018 while income level in Republicans districts actually declined over the decades, from $55,000 to $53,000. That’s a result of “eye-popping shifts in economic performance. Democratic-voting districts have seen their GDP per seat grow by a third since 2008, from $35.7 billion to $48.5 billion a seat, whereas Republican districts saw their output slightly decline from $33.2 billion to $32.6 billion.”
The pandemic has caused disruption in that, definitely, but likely not at the foundations. It makes good sense for companies who care about economic performance and a solid economic environment in which to operate to think about relocating to states that aren’t in economic decline. That’s setting aside any moral obligation they have to their workforce.
But it also means they’re operating in a national economy where the declining states have all the political power, thanks to 50 years of concerted effort by Republicans to cheat their way into power. So they could get a Supreme Court to do what they just did.
Economic warfare might be the only way to avoid a shooting civil war—corporate America deciding that a stable economy and a stable workforce are more important to their long-term prospects than tax cuts. That’s what states like California and Connecticut and Illinois and New Jersey are hoping with their efforts.