There's no evidence at all that the Equality Act will help the economy

Peter Sprigg is Senior Fellow for Policy Studies at Family Research Council. This article appeared in The Washington Examiner on April 30, 2019

A free-market economy—the freedom of willing employers and willing employees, willing vendors and willing customers, to contract with each other—has made our country prosperous. There is a role for government in the economy, but government intervention to dictate how American businesses operate should require the most compelling justification.

Unfortunately, that standard seems to have been abandoned by the U.S. Chamber of Commerce. Their slogan is, “Standing Up for American Enterprise.” Their website declares, “We advocate for pro-business policies that create jobs and grow our economy.” They list “regulatory relief” as a priority issue.

So it seems odd that such a group sent a letter to Congress asking, in effect, “Please regulate us more!” Yet that is what the Chamber did on this month by writing to endorse the “Equality Act.” This bill would add “sexual orientation” and “gender identity” as special protected categories in virtually every federal civil rights law, treating discrimination based on those characteristics as the exact equivalent of racial discrimination.

The bill’s “gender identity” provisions would force every business in the country to abandon biological sex as the standard for separating males and females in showers, locker rooms, bathrooms, and even sports teams, and would replace that objective physical standard with the entirely subjective psychological standard of “gender identity”—to the detriment primarily of women and girls. One lone paragraph offered a justification for the Chamber’s paradoxical plea for more government regulation of business:

Embracing equality has a profoundly positive impact on business performance. A recent report from the U.S. Chamber of Commerce Foundation found that gay, lesbian and transgender-inclusive companies enjoy higher revenue margins, attract better talent, and have lower employee turnover.

Yet that is an argument only for individual companies to voluntarily adopt “LGBT-inclusive” policies. It does not explain why the federal government should coerce every single business across the country into adopting such policies. The Chamber is claiming that the free market itself rewards “inclusive” companies and punishes the others. If the market is working, why invite the heavy hand of government to intervene?

The same conclusion could be drawn from the Human Rights Campaign’s Corporate Equality Index 2019. It reports that 93% of Fortune 500 companies already have policies prohibiting “sexual orientation” discrimination, and 85% protect “gender identity.” The “problem” that the activists perceive seems to be fading away without federal intervention.

There is, however, reason to doubt the report from the U.S. Chamber of Commerce Foundation — it was funded by the Gill Foundation. This is an organization founded by the gay-identified tech millionaire Tim Gill, who has publicly expressed as his goal: “We’re going to punish the wicked.”

Some advocates argue that gender-identity laws benefit the economy as a whole. We can test that proposition empirically. Twenty of the fifty states already have sexual orientation-gender identity laws for employment, public accommodations, and housing—in other words, protections very similar to those the Equality Act would impose nationally. Do those 20 states have an economic advantage over the 30 states that have declined to adopt such laws?

The answer, in brief, is no. A simple internet search reveals a number of different cumulative rankings as well as individual statistics by which to measure the economic health of a state. However, none of them shows any clear advantage for states with sexual orientation-gender identity laws.

For example, CNBC published a “scorecard on state economic climate” in July 2018, ranking “America’s Top States for Business.” Six of the 20 highest-ranked states had such laws—but so did nine of the twenty lowest-ranked ones.

Forbes published its own list of “Best States for Business” in November 2018. Of the top seven states, not one had full protections, and only four of the top 13 had them. So did eight of the bottom 13.

What about specific statistics? If workers were flocking to states with these laws because they yearn for an “inclusive” environment, we would expect to see larger gains in population in those states. An article published in USA Today in January 2018 listed the eight fastest growing states (four of which have sexual orientation-gender identity laws); and the eight that are losing the most population (four of which also have such laws).

How about unemployment? If businesses are fleeing states that lack these laws in favor of those that have them, perhaps they are leaving more unemployed workers behind them. Yet again, there seems to be no correlation—six of the twelve states with the lowest unemployment rates(as of February 2019) have sexual orientation-gender identity laws, but so do six of the twelve with the highest unemployment.

A final data point might be economic growth itself. Do gender identity states have better growth rates of gross domestic product? According to data for the full year of 2017, only six sexual orientation-gender identity states exceeded the U.S. national growth rate of 2.1%, while 14 such states were below it.

The empirical evidence simply shows no strong correlation between the existence of such laws and the health of a state’s (or a nation’s) economy. There are other arguments for (and against) the Equality Act, but let’s put this one to rest.