MONEY TALKS

The hidden downside to corporate America’s fight for LGBT equality

What happens when America’s corporations help determine social policy? We may be about to find out.

On March 23, the Tar Heel state passed a piece of legislation, known as House Bill 2, that effectively forces trans people to use the bathroom that corresponds with the sex they were assigned at birth, not their gender identity. Then, in May, the Department of Justice responded that HB 2 is in violation of Title VII of the Civil Rights Act of 1964, which prohibits discrimination in race, national origin, and sex. Rather than complying with the decision, the state chose to file a lawsuit against the Obama administration on Monday. According to UCLA’s Williams Institute, the decision to uphold HB 2 could set the state back $5 billion each year—primarily in federal funding.

 Since the passage of HB 2, over 160 corporations have come out to condemn the legislation. Prior to the DOJ ruling, however, it’s the business community that has proven the most effective bartering tool in countering anti-LGBT legislation. Since the passage of HB 2, over 160 corporations—and counting—have come out to condemn the legislation, with many calling for its repeal. These companies include Apple, Time Warner Cable, Microsoft, Visa, and Google. PayPal, which was expected to commence a $3.8 million expansion in Charlotte in 2017, pulled out of the deal. That cost the state a reported 400 jobs. Deutsche Bank followed suit, yanking what would have been an extra 250 jobs from its location in Cary. Meanwhile, musicians like Ringo Starr and Bruce Springsteen have been cancelled shows in the state.

That did not lead to the repeal of HB 2 in North Carolina, but boycotts did prove successful in killing a proposed “religious liberty” bill in Georgia, one similar to the legislation Mississippi governor Phil Bryant signed into law on April 5. Disney and Marvel, both of which rely on the Peace State as a prime shooting location, threatened to take their business elsewhere. This would have cost the state billions of dollars in future revenue. Their concerns were echoed by Dow Chemical, Intel, Salesforce, and the NFL, which threatened to block Atlanta from hosting the Super Bowl, should House Bill 757 pass. Gov. Nathan Deal vetoed it, pledging to strike down any similar bills that cross his desk in the future.

This is a dramatic change from just two decades ago, when few companies seemed willing to openly rally behind LGBT political causes. Writing for the New Yorker, Richard Socarides explained that when he worked in the White House during the Clinton administration, it was extremely difficult to “get CEOs to endorse Clinton’s gay-rights initiatives.” These included hate crime protections and workplace nondiscrimination. “I got very few takers,” he writes. “Just getting executives to a meeting about gay rights was a challenge.” Compare that to today, when over 60 companies have come forward to endorse the Equality Act, a bill introduced in 2015 that would legislate equal access in public accommodations, including housing and employment, nationwide. During the Clinton administration, it was extremely difficult to “get CEOs to endorse Clinton’s gay-rights initiatives.”  

Traditionally, it was assumed that corporations aligned with conservative political causes, as in the days when Harvey Milk organized with labor leaders in California to boycott Coors Beer based on its anti-immigrant, union-busting practices. As part of the company’s anti-union efforts, Coors fired LGBT workers from its production plant in Colorado. Banners condemning Coors became a staple of Pride parades. A memorable slogan read: “Fight the Ultra Right, Boycott Coors.” Even as late as 2002, most American workplaces scored poorly when it came to their acceptance of LGBT rights. That year marked the introduction of the Human Rights Campaign’s Corporate Equality Index, in which just 13 corporations boasted perfect marks. Now that figure is up to 367.

As business boycotts push states like North Carolina to the left on LGBT rights, corporate America is becoming an increasingly crucial ally in the fight for equality. That development, advocates say, is both positive and negative. The extraordinary benefits to states fighting legislation targeting the community speaks for itself. But in a post-Citizens United America, when corporations already have inordinate influence in the national arena, does giving more political weight to businesses serve the long-term good of voters? If Mitt Romney famously argued that corporations are people, some say that the real issue is that they’re much more powerful than the people—because their voices are actually heard. Meanwhile, the real work that’s being done too often gets ignored.

 “Money talks. This isn’t a game people are playing. The livelihoods of North Carolinians are on the line.” Matt Hirschy is at the front lines of the business boycott in North Carolina. Hirschy, 26, works as the director of business engagement and programs for Equality North Carolina, the local LGBT non-profit working to organize the corporate response on the ground (along with the state’s Human Rights Campaign). Hirschy explained that the backlash from the business community serves an important purpose, because it helps drive attention to the cause. “It gets people’s attention and it gets them focused on the conversation in a way we haven’t been able to do in the past 20 years,” Hirschy says. “Money talks. This isn’t a game people are playing. The livelihoods of North Carolinians are on the line.”

Hirschy further argued that the current climate may prove a crucial tipping point in the LGBT movement: It’s not just corporations but also CEOs themselves who are willing to stand up and fight for equality. In a Washington Post op-ed published in 2015, Apple chief Tim Cook argued that “discrimination, in all its forms, is bad for business.” The openly gay executive further pledged to use his position to fight anti-LGBT legislation. Salesforce CEO Marc Benioff has been equally vocal in his opposition to bills like HB 2 and HB 1523. “We’re at a pivotal moment in terms of… corporate engagement for social good,” Hirschy said. “These companies are serious about their values and are willing to stand up for their employees.”

As the New Yorker’s James Surowiecki notes, this shift “isn’t entirely unprecedented.” There is a long—if complicated—history of businesses and public entities working for the benefit of human rights causes. “During the civil rights era, when local administrators across the South resisted desegregation and suppressed protests, business elites in Dallas and Charlotte pushed for moderation,” he writes. “Dallas had desegregated its downtown businesses by 1961, and Charlotte began desegregating public accommodations the year before the 1964 Civil Rights Act.” These actions, however, were not driven purely by top-down benevolence: They were in response to the protests of activists working on the ground for sweeping political change. Corporations did what they have always done—lead from behind.

 There is a long—if complicated—history of businesses and public entities working for the benefit of human rights causes. Yasmin Nair, a writer and activist in Chicago, argues that the same is true when it comes to the current political climate. Nair spoke with Quartz over the phone about Target’s recent decision to allow transgender employees and customers to use the bathroom of their choice at all the big-box chain’s locations. While she lauded Target’s commitment to inclusivity, Nair urged moderation in patting the company on the back. “Target isn’t doing this out of the blue,” she said. “Target is doing this as a very calculated economic decision. If Target felt, for even a millisecond, that the cultural climate was very different, it would do the opposite. … It’s really dangerous to think about corporations as in any way being leaders in social justice activism.”

Arguably, one of the turning points for corporate LGBT-centered activism was IBM’s decision to offer full healthcare benefits to the partners of LGBT employees back in 1996. In the years since, companies like Facebook and Google pledged their commitment to diverse workforces, enacting workplace nondiscrimination laws that prevent employees from being fired on the basis of sexual orientation or gender identity. “Diversity is central to Facebook’s mission of creating a more open and connected world: It’s good for our products and for our business,” Facebook’s statement on the subject reads. “Cognitive diversity, or diversity of thought, matters because we are building a platform that currently serves 1.4 billion people around the world.”

Hiring LGBT workers makes these companies more competitive, and thus, it makes sense to do what it takes to attract them. As such, Nair argues that this is as much driven by the bottom line as it is the public interest. “That is not because the heart of corporations has changed,” she said. “It’s because capitalism has realized, ‘Wait, this is a great demographic to exploit.’ … Corporations are interested and invested in demographics. What they’re seeing is a demographic they can turn to and get money from.” Nair pointed out the wave of LGBT-themed ads in recent years—including a 2015 Wells-Fargo commercial featuring a lesbian couple adopting a child—further speaks to this truth: LGBT people make businesses money.

  “[This] is not because the heart of corporations has changed. Corporations are interested and invested in demographics.” But this is a double-edged sword. As the LGBT community shows its buying power in the American economy, following the successful boycotts of companies like Chick-fil-A and Barilla, it gains more political influence. But as Jared Keller argued in a recent op-ed for Pacific Standard, the problem with this is that money already has an overwhelming influence on American politics. “With all the focus on how immense wealth translates into elections, there seems to be very little of the same concern applied to what happens after November comes and goes,” Keller wrote. “While outside spending on elections ballooned from $220 million in 2012 to $486 million in 2014 since Citizens United, the Congressional lobbying industry has jumped from $1.45 billion to $3.21 billion since 1998.”

In an interview with Quartz, Keller further elaborated on his remarks, saying that it’s “ironic that these boycotts come during a time of heightened anxiety over money in politics.” Citizens United v. FEC was a 2010 Supreme Court case allowing the use of Super PACs to raise unlimited funds for US politicians. Since that 5-4 decision, the overwhelming majority of Americans (84 percent) now believe that “campaign cash plays too big a role” in elections. They’re right. In a 2014 study, researchers Martin Gilens and Benjamin Page found that the wealthy have disproportionate political power when compared to the average American. “It’s a shitty reminder that the public will doesn’t necessarily matter to your lawmaker—economic incentives do,” Keller said.

Yasmin Nair explains that the reason that big money is finally listening is actually in large part because of the in-roads that grassroots organizations across the country have been working to build for decades. In North Carolina, it’s nonprofits like Equality N.C. and local LGBT activists that have been fighting on the front lines of this issue, not Apple or Starbucks. She said the focus on corporate activism often ignores the ongoing, everyday work being done by dedicated LGBT advocates across the country.It detracts from the enormous energy of many queer and especially trans people over the past many years who have been working on the ground,” Nair says. “It takes the attention away from that and makes it into a ‘ta-da!’ effect.”

The celebration of corporate might also masks a truth far more chilling: When we give corporations the power to fight for our rights, we could—one day—give them the power to strip them away.

Follow Nico on Twitter at @Nico_Lang. We welcome your comments at ideas@qz.com.

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