Top States for Business

Can a state restrict voting and LGBTQ+ rights and still be a Top State for Business?

Key Points
  • Diversity, equity and inclusion issues such as voting rights, LGBTQ adoption and legal protections for transgender youth are pitting companies — and organizations like Major League Baseball and the NCAA — against states.
  • The states contend that they are inclusive, and many are still attracting companies and workers.
  • CNBC’s “America’s Top States for Business” study is placing added emphasis on inclusion this year.
Will Texas remain a top state for business amid inclusion controversy?
Will Texas remain a top state for business amid inclusion controversy?

Red states that claim to be upholding traditional values are upending some traditional alliances between conservatives and corporate America.

They could also upend the competitiveness of some perennial leaders in the battle between the states for business and jobs. One measure of that landscape — CNBC's annual America's Top States for Business study — is paying special attention to inclusiveness this year as companies become increasingly vocal about diversity, equity and inclusion.

After Georgia passed a sweeping election reform bill earlier this year over the objections of major employers including Delta Airlines and Coca-Cola, Major League Baseball pulled its 2021 All-Star game out of Atlanta, moving it to Denver.

When Texas considered its own restrictive voting bill in May, 50 Texas companies including HP and American Airlines, and more than 180 business leaders, signed letters opposing the bill.

"Voter suppression is a stain on our reputation that could cost our region millions of dollars," the business leaders' letter said.

Voting rights activists gather during a protest against Texas legislators who are advancing new voting restrictions in Austin, Texas, U.S., May 8, 2021.
Mikala Compton/ | Reuters

Transgender targeting

Texas was also among dozens of states to consider bills aimed at transgender people — and particularly transgender youth.

Undeterred by threats from the NCAA to move events from states that bar transgender women and girls from competing in in college and high school sports, Texas Republicans introduced just such a measure.

Lawmakers also considered a bill that would criminalize gender affirming medical treatments like puberty blockers, designating such health care as child abuse. That drew the ire of 49 companies and organizations including Texas-based Southwest Airlines and Dell Technologies, which signed an open letter in protest. 

"We are concerned to see a resurgence of efforts to exclude transgender youth from full participation in their communities, to criminalize or ban best-practice medical care that is proven to save lives, or to exclude LGBTQ people in a variety of other settings, including accessing healthcare, filling a prescription, or seeking legal representation," the letter said.

The Texas transgender bills failed in the regular legislative session that ended on May 31, and Democrats managed to derail the voting bill by staging a dramatic, last-minute walkout. But Republicans still say it was the most conservative session in history, passing laws to expand gun rights and restrict abortion. And the other bills could be back in a special session later this year. 

The Managing Director of Texas Competes, which claims to represent some 1,500 companies, says that is bad for business.

"What does this say about Texas to the world when we're trying to be competitive for talent and tourism?" Jessica Shortall told CNBC.

Texas Gov. Greg Abbott said he is not worried about companies leaving the state, despite their public rhetoric.

"When I talk to both the CEOs, as well as business leaders who are coming here, they are coming here to escape the laws and the rules and regulations of these other states," Abbott told CNBC in an interview.

Small business perspective

For some business leaders in Texas, the battle over the legislation is intensely personal.

They include Amber Briggle, who owns a successful massage therapy business in Denton, north of Dallas.

She and her husband moved to Texas twelve years ago and consider it home.

"I'm a small business owner," she said. "We're established."

But she said if they knew then what they know today, they would not have moved here.

"I don't feel good living in Texas in general," she said.

Her 13-year-old son Max is transgender. Had the ban on gender-affirming care become law, Briggle and her husband would have faced prosecution.

"It's terrifying to think that all the things that we have done as Max's parents to help him become the young man that he is, could somehow land us in prison," she said.

But Briggle said the potential implications extend far beyond her and her family.

"We're looking at large corporations bringing in people from across the country. Are they going to feel comfortable moving to the state? That also diminishes my ability to hire people too," she said. "If they're not moving to the state, I've got a smaller pool of applicants to choose from. It's just a hole. It just ripples everywhere."

But the president and CEO of the state's largest business organization said the state is having no trouble attracting workers or companies.

"To me, the best measurement of how inclusive and welcoming a state is, is by the population trends," said Glen Hamer of the Texas Association of Business. "The Texas economy is continuing to produce new jobs, bringing new businesses and bringing the biggest iconic business icons in the world to the state."

Indeed, according to U.S. Census Bureau data analyzed by CNBC, Texas gained more than 212,000 college-educated adults moving to the state in 2019 — the most recent data available — while only about 128,000 moved out. As a percentage of the state's adult population, that is one of the best migration rates in the nation.

If the conservative push in Texas is supposed to be scaring away companies and workers, that does not seem to have happened yet.