Top States For Business

What did Miley Cyrus just call Indiana's Governor?

Indiana's religious freedom law under fire

Indiana Governor Mike Pence signed the controversial Religious Freedom Restoration Act in a private ceremony, but that did nothing to quiet a very loud public reaction through social media, where business leaders and celebrities lashed out at the law via Twitter, Instagram and Facebook.

Tim Cook tweet

A wide variety of other public figures attacked the governor and state of Indiana, from Hillary Clinton and Larry King to Miley Cyrus (who sent her strongly worded feelings directly to Pence in an Instagram post), young adult author John Green ("The Fault of Our Stars"), actress Audra McDonald, Indianapolis Colts' punter Pat McAfee and "Star Trek" actor and gay rights activist George Takei.

McDonald tweeted, "Some in my band are gay & we have 2 gigs in your state next month. Should we call ahead to make sure the hotel accepts us all?"

Clinton tweeted that it was "Sad this new Indiana law can happen in America today."

A window sticker on a downtown Indianapolis florist, Wednesday, March 25, 2015, shows it's objection to the Religious Freedom bill passed by the Indiana legislature.
Michael Conroy | AP

The law, signed by Pence on Thursday, allows businesses to use an owner's faith as a reason to refuse service to customers, including same-sex married couples. The law risks setting off a business chill in the state, with money-making conferences and major corporations threatening to pull out.

Big corporations were among the loudest critics. Columbus, Indiana-based Cummins, the world's largest diesel engine maker, opposed the new law in strong terms. "Cummins believes it's bad for business and bad for Indiana and sends the message that the state is unwelcoming," a Cummins spokesman said. "We are a global company in a competitive environment and it could hinder our ability to attract and retain top talent." CEO Marc Benioff tweeted on Thursday about the decision in a series of comments that went viral and said the company would be forced to dramatically reduce its spending in the state. He called for any Salesforce employees and customers required to travel to the state for any work-related tasks to immediately cancel plans. He also called on the rest of the tech industry to take a stand against the Indiana government's decision. Salesforce bought Indianapolis-based marketing software company ExactTarget in 2013.

Say goodbye to Hoosier 'hipster' talent

Yelp CEO Jeremy Stoppelman posted an open letter on Yelp's official blog stating that it was "unconscionable to imagine that Yelp would create, maintain, or expand a significant business presence in any state that encouraged discrimination by businesses against our employees, or consumers at large."

PayPal co-founder Max Levchin tweeted that what was happening in Indiana, no matter how it was "dressed up", was discrimination and "pretty unbelievable."

The organizers of Gen Con, a gaming conference that is among the marquee events of the year in Indianapolis, said it might move in future years if he signed the bill.

"Star Trek" star George Takei posted a statement on his Facebook page saying personalities like him would not attend Gen Con if it were held in Indiana.

"We are especially concerned about how this legislation could affect our student-athletes and employees," NCAA President Mark Emmert said in a Thursday statement, which is hosting the Final Four in Indianapolis this year.

Timothy Slaper, who directs the Indiana Business Research Center at Indiana University, said the real threat is to the future growth of Indiana's economy, still dominated by traditional industries, including agriculture and auto manufacturing.

"I'm more concerned about the longer-term cultural implications in terms of the magnetism of the state to attract the young creative class," Slaper said. "The engineers or artists you want to have in your city and state to cultivate the ecosystem for entrepreneurs. It's the location decisions of companies like Salesforce and attracting this brain power for the next several decades."

We're relying on our old core strengths in an age when we need to be a little more aspirational. Indiana desperately needs hipster brains. This probably isn't a great way to cultivate them.
Timothy Slaper
Indiana Business Research Center director

Slaper said the state could not expect to see an increase in per capita income if all it does is attract standard manufacturing jobs. "The jobs that pay well are engineers and designers and marketers. ... Indiana desperately needs hipster brains. This probably isn't a great way to cultivate them," he said.

Gov. Pence said in his Thursday statement—after signing the law in private—"This bill is not about discrimination, and if I thought it legalized discrimination in any way in Indiana, I would have vetoed it. ... For more than 20 years, the federal Religious Freedom Restoration Act has never undermined our nation's anti-discrimination laws, and it will not in Indiana."

Indiana's economy at a glance

Indiana ranks first among states in the percent of its workforce engaged in manufacturing, and second nationally in manufacturing employment growth over the past year, according to the Indiana Business Research Bureau. Indiana's manufacturing employment grew at 4.5 percent between November 2013 and November 2014, according to the U.S. Bureau of Labor Statistics, compared to a national manufacturing growth rate of 1.6 percent.

Indiana's GDP hit $294 billion in 2013, an increase of $31 billion over the 2009 level when it placed 9th among states. Its GDP is now ranked 16th nationally, according to the U.S. Bureau of Economic Analysis. The state GDP has been a step behind the national average in three of the past four years, and the Indiana Business Research Center expects that trend to continue through 2017.

In manufacturing, Indiana ranks 6th among U.S. states but in information services, it ranks 26th.