Wednesday, April 1, 2015

#BoycottIndiana? I Don't Buy It

By now, most major US corporations are fairly well-practiced in the art of Culture WarsTM PR. State-level Religious Freedom Restoration Acts, which give businesses license to discriminate on the basis of the religious convictions of the owners, now exist in over 2/5ths of states. An additional 11 states have standing court decisions implementing similar provisions.

Now that Arkansas has passed an RFRA, large corporations are threatening...well not much yet. But they are writing sternly worded press releases and canceling meetings. Some Indiana-based businesses have discussed slowing expansion.

But let's pretend they go through with it. Angie's list actually does refuse to expand in Indiana. Is this altruism sincere, or just another cynical exercise in pinkwashing? Certainly, in the first instance, businesses will face lower overall profits. But will these lower profits persist? I'm not so sure.

That pinkwashing is probably worth something. Maybe writing a letter to the Human Rights Campaign - the diplomats-apparent to queer America - in a very loud and painfully obvious attempt at sanitizing their image, might increase Nike's consumer base. They might not be able to make up their entire consumer base, but they also might not need to.

What if companies did leave Indiana for new frontiers? This presents an opportunity to shed their workforce of all but the most exploitable employees. In labor economics, we often talk about the reservation wage - the minimum wage necessary for an individual to choose to work. By moving, those employees who decide to stay on signal to the company their lower reservation wage relative to the rest of the workforce. Since moving represents a cost to employees, the move functions as a temporary drop in wages. Thus, by moving, these companies are ensuring that the remainder of their employees are those who are willing to work for the least - the most exploitable.

Chances are, however, no reasonably sane CEO is thinking that this wave of milquetoast homophobia is the beginning of a long-term trend. More likely, if businesses do choose to leave Indiana, they may intend to return later. For the most part, most workers will not hold out for their company to return. When the company does return, however, it stands to hire a new workforce at a new, lower wage. Any form of worker organization will be effectively wiped out by this de facto lockout.

Perhaps I'm being too cynical. But if businesses are actually serious about economically challenging these laws, why are none talking about potentially taking a hit on their input costs by cutting these states out of their supply chain? Why are none talking about shifting their political donation? Even if these threats were made, and found to be effective, what would this mean with respect to the popular sovereignty which the United States purports to embody?

Certainly, a corporate boycott - or more appropriately, divestment - would be interesting symbolically. But at this point, we only have talk. We're likely to get only talk until CEOs get the go-ahead from the market research department.

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