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Friday, October 7, 2011

Discrimination and Job Creation Just Don’t Mix

By Dr. Art Kamm
Originally posted 10-6-11 at Art on Issues

In defending their tax policies that largely benefit the wealthiest, Republican leadership claims that it is protecting our ‘job creators’. However, Republican legislators certainly paid no heed to dozens of job creating CEOs who expressed their opposition to discriminatory legislation that could only negatively affect economic growth and job creation. Although Tea Party elected officials may say that their focus is on smaller government, recent research has shown that the rank and file of that movement are more concerned about social conservatism, especially a desire to see religion play a prominent role in government.

Discriminatory laws, such as NC’s constitutional amendment that would prohibit marriage except that between one man and one woman, are most often opposed, and rightfully so, as an infringement of civil rights.  But discriminatory laws can be damaging in yet another way; the potential to hamper economic growth and job creation.  With the mandate of the 2010 election being job creation and getting the economy growing at a faster clip, a valid question, one actually posed by CEOs (ref), is why the NC legislature devoted so such time and effort to this amendment rather than focusing on initiatives that would help stimulate the economy.

This article will examine the broad language of NC marriage amendment and its legal ramifications (not all of which are yet understood) and how these could only have downside potential for the economy and job creation.  In order to understand why the legislature focused on this amendment rather than on matters of the economy, the article will additionally discuss recent research that uncovered the most common predictive characteristics of today’s Tea Party supporter; characteristics that make the NC amendment but a reflection of what is happening on a broader scale around the country.

Legal Issues

As reported in the media, UNC – Chapel Hill law professor, Dr. Maxine Eichner, and some of her colleagues, prepared a report on the amendment this past June (ref). Dr. Eichner additionally published an opinion piece concerning the amendment’s unusually broad language (ref).  Although NC law already prohibits marriage except that between a man and a woman, the amendment’s language goes further: “Marriage between one man and one woman is the only domestic legal union that shall be valid or recognized in the State.”  The term ‘domestic legal union’ has never been used in any prior NC law, has not been before any NC court, nor has it been interpreted by courts in any other state.  This language, for example, would certainly ban civil unions should the state later decide to grant such (a point that even conservative US Representative Renee Ellmers disagrees with, ref).  But its reach also extends to both same-sex and opposite-sex unmarried couples.  For example, consider two individuals who meet late in life and decide for financial reasons that they will not marry but rather live in a committed relationship; such individuals could lose many of their rights.  The ban would also invalidate domestic partner benefits already offered by municipalities such as Chapel Hill, Durham and Greensboro, and counties such as Mecklenburg and Orange.

Dr. Eichner explains that the courts could interpret the language to ban many of the limited range of rights available to unmarried couples, but the difficulty is knowing just how many rights might be affected.  She provided four examples:
  • The language could override existing domestic violence protections for unmarried couples.  Such happened in Ohio when a similar amendment was added to that state’s constitution.  Although the Ohio Supreme Court ultimately restored those protections, the language of that amendment was narrower than that in NC.
  • The amendment could undercut existing child custody and visitation rights designed to protect the best interests of children.
  • The amendment could prevent the state from giving any further rights to committed couples to order their relationships. As examples: 1) it could prevent the right to determine the disposition of a deceased partner’s remains; 2) it could prevent domestic partners from being added to the list of categories of people who have surrogate medical decision-making rights if their partner is incapacitated; and, 3) it could prevent the state from in the future allowing second-parent adoptions by domestic partners which ensure that both partners have a legal tie to, and legal responsibilities (including child support) for the children they are raising.
  • Less likely, but still possible, the courts could interpret the amendment to invalidate trusts, wills and end-of-life directives by one partner in favor of the other.
Should the amendment become law following next May’s vote, Dr. Eichner concludes by stating that it will take years of expensive litigation to resolve the meaning of the amendment but that when the dust clears “unmarried couples will have fewer rights over their most important life decisions than they would have had otherwise.”

Economic Considerations

I write this section from the perspective of having been founder and CEO of a multi-million dollar ‘small business’ in NC.  The business received recognition from both our local chamber of commerce as well as our regional chamber, and it provided employment to hundreds of individuals during its existence.  At one point it achieved 8 consecutive years of new business growth.  So I have some experience competing in the business world.  Although one can not look into a crystal ball regarding outcomes of business decisions, such decisions are based on upside potential to grow the business.  And a business is driven by the talent of its people, talent that creates efficiencies, enhances profitability, improves existing products and creates new products or services.

What stands out about the amendment is that it provides absolutely no upside potential to NC’s economy or business climate.  However, there are downside risks and three such risks are presented below.

Attracting and Retaining Unmarried Couples (especially the retired)

There is little doubt that this amendment will affect the decision of unmarried couples to relocate to, or remain in, NC.  As noted in Dr. Eichner’s opinion piece, the 2010 Census reported 222,800 such couples (both same-sex and opposite-sex) already in NC, an increase of 55 percent over the past decade.  Let’s consider those in retirement.  Our retired population is pure gold economically.  This population does not burden the struggling employment market as they have already stopped working, they do not burden the school system as their children have already moved on yet their property taxes support public education, and their retirement income and savings are spent on goods and services that create real demand and thus contribute to job growth.  And considering the depressed housing market, relocating to NC would involve real estate purchases in many instances, and the decision to leave NC could involve yet another existing home being placed on the already glutted market.  It seems a bit odd for Conservative politicians to be pushing for tax cuts (actually a weak economic stimulus as the tax benefit doesn’t all go into the economy, e.g., savings and debt pay down) but are willing to place into law an amendment that would make the state unattractive to segments of our retired population.

Should NC become an unfriendly place for unmarried couples or existing same-sex unions to relocate to, or remain in, (especially the retired), it could only have downside potential for the economy and job growth by negatively impacting demand for goods and services.
Attracting and/or Retaining Talent

An important driver of business growth is talent.  Talent innovates, it creates.  Take people away from a business and all that is left is brick and mortar.  I used to say that my real assets got in a car at the end of the day and drove home.  And talent is blind to race, gender and sexual preference.

Chris Hughes, co-founder of Facebook, a native of Hickory, NC, is gay and ‘knows what its like to grow up different in a small Southern town’ (ref).  He has stated that the amendment “is bad for business, bad for the perception of my home state on the national stage, and a far cry from job-creating legislation that NC lawmakers should be focused on”.  Additionally the legislation “will only perpetuate this stigma for a new generation of creative, talented youth, uninterested in second-class citizenship in a state they call home…The next Facebook or Apple or Google could be created by another North Carolinian…Be mindful of how you treat them and their families.”  Besides the difficulties in attracting talented members of the LGBT community into NC, there is also the issue of talent leaving the state and its adverse consequences on businesses where they were employed.

Attracting and/or Retaining Businesses

The success of a business, its ability to remain competitive, is driven by the talent of its employees.  If state law discriminates against a population of individuals, the ability of businesses to attract the best talent will be hampered.  At least 76 NC CEO’s signed a letter opposing the legislation (ref) (ref).  One of those CEOs, Ken Eudy of Capstrat, published his thoughts on the matter (ref): “As with other CEO’s, I believe that amending the state constitution would hurt our business climate.  I believe that knowledge-economy companies and entrepreneurs who are dreaming up the next Google or Microsoft would look at NC through a different lens … I’m concerned that incredibly talented people – designers, copywriters, strategists, account executives, web developers – will decide they don’t want to move to a state that takes the drastic step of writing discrimination against same-sex couples into its constitution.  It will hurt our ability as an agency to recruit the most talented people.”

It is of interest that in defending their tax policy, Republican leadership maintains that it’s a bad idea to raise taxes on our job creators (i.e. the wealthy).  Yet dozens of our CEOs, our job creators, were ignored when they objected to a piece of legislation that could only have downside potential for their businesses.  Despite claiming to be the business-freindly party, not one Republican in the NC Senate voted against the amendment.

Motivators

With America looking to recover from the worst economic downturn since the Great Depression, and with so many CEOs objecting to the amendment, what was the driving force behind this legislation?  To understand actions, one must understand motivation.  Motivational factors, sometimes called ‘vision’, are important in establishing direction.  This is why businesses put forth corporate mission statements and even individuals create their own personal mission statement, something I taught in my graduate-level leadership development classes.  The actions of businesses and individuals are driven by the vision of who and what they are and what they want to become.

Recent research (ref) published by Dr. David Campbell (Associate Professor of Political Science, Notre Dame University) and Dr. Robert Putnam (Professor of Public Policy, Harvard University) sheds light on the characteristics of those who became Tea Party supporters, the conservative group that played a pivotal role in the outcome of the 2010 ‘wave’ election; and because of that outcome has garnered significant political influence.  As but one example, consider how this movement drove John McCain, a previously moderate Republican US Senator, to abandon his ‘maverick’ persona during his last election campaign (ref).  In 2006 Drs Campbell and Putnam conducted an interview of 3000 Americans as part of their research into national political attitudes, well before the Tea Party existed.  This past summer they went back and interviewed many of the same people again.  As a result they were able to look at what people had told them, well before there was a Tea Party, to predict who would become a Tea Party supporter.  This research goes beyond just predictors, it provides insight into motivational factors of this group.

What they found casts doubt on the Tea Party’s origin story of non-partisan neophytes that sprang up from a grass roots movement opposing big government.  The Tea Party supporters of today were highly partisan Republicans well before the Tea Party existed and were more likely to have contacted government officials.  Republican affiliation was the strongest predictor of today’s Tea Party supporter.  They are overwhelmingly white and even compared to other Republicans they had a low regard for immigrants and blacks well before Barack Obama was president, and they still do.  They were disproportionately social conservatives in 2006 on issues such as abortion and they still are.

However, other than having been a Republican, the strongest predictor of being a Tea Party supporter today was a desire to see religion play a prominent role in politics.  ”They seek ‘deeply religious’ elected officials, approve of religious leaders’ engaging in politics and want religion brought into political debates.  The Tea Party’s generals may say their overriding concern is smaller government, but not their rank and file who are more concerned about putting God in government.”

And therein lies the driving force that created the NC amendment.  The overtly religious language issued by public supporters of this legislation; the use of scripture, pictures of the bible, and invoking God’s opinion in signs at pro-amendment rallies; and the language of legislators such as James Forrester (the senate sponsor of the amendment) who called Asheville, NC a “cesspool of sin” (ref), have been previously described by this writer as an assault on our constitution’s First Amendment Establishment Clause (ref).

But the impact of these motivational factors has reach beyond the NC constitutional amendment.  It explains the paucity of jobs bills out of the US House of Representatives after the Tea Party takeover despite a struggling economy.  It explains the ‘War on Women’ where Republicans in the House of Representatives mounted an assault of women’s health and freedom that would deny millions of women access to affordable contraception and life-saving cancer screening and cut nutritional support for millions of newborn babies in struggling families as well as curtail funding for abortion and abortion care (ref).  And beyond religion, the low regard of Tea Party supporters for immigrants and blacks explains voter suppression legislation (ref), redistricting that decreases representation of African Americans (ref), as well as drifting back towards segregated public schools (ref).

Dr. Paul Krugman published a prophetic opinion piece in November, 2009, warning that the GOP had been taken over by the right wing it used to exploit and that it had became the party of Limbaugh, Beck and Palin.  And, just as what happened in California where the GOP became a rump party remaining large enough to prevent anyone else from dealing with that state’s fiscal problems, the same could occur on a national level.  ”The point is that the takeover of the Republican Party by the irrational right is no laughing matter.  Something unprecedented is happening here – and it’s very bad for America” (ref).

Discussion

Is the above conjecture? Let’s consider where we were in the year 2000 (ref).

Between 1992 and 2000 our government had cut 20% of the federal civilian workforce making it the smallest such workforce in 40 years; federal spending had been reduced from 22% GDP to 18%, its lowest level since 1966; our country was on track for the largest 4 year pay down of debt in our history with the potential to pay off all public debt within a decade and the national debt clock was turned off; surpluses were achieved in 2000 without borrowing from the entitlement programs; federal income tax for the middle class, as a percent of income, was at its lowest level in 30 years; our unemployment rate was reduced from 7.5% in 1992 to 4.2% in 1999, the lowest level since 1969; and over 20 million new jobs had been created.  This would seem to be a Tea Party dream list: surpluses, debt pay down, smaller government, and strong job creation.

Yet, if Tea Party supporters were previously highly partisan Republicans, it would have been these same individuals who voted away in 2000 what they now say they want in exchange for the same tax policies that increased our national debt from less than $1 trillion in 1980 to almost $4 trillion between 1981-1992.  When a group votes away what they say they now want, in exchange for policy that had already been shown to produce the deficits they decry, something else is at play.  Thus the value of Drs Putnam’s and Campbell’s research.  Today’s Tea Party rank and file are not grassroots converts to ‘small government’ and their agenda is not about debt, deficits, healthcare, etc; those are but handy excuses to unleash the rage of conservative America railing against a changing America.

There are a couple of take away points from this article.

First, if the primary concern of the American public is getting the economy back on track and stimulating job growth, it will not occur with this Tea Party movement and its elected representatives – it just is not their focus as determined by its characteristics, motivational factors, legislative actions and voting record.

Second, discrimination and job creation just don’t mix.
Arthur R. Kamm, PhD (Dr. Art Kamm) has devoted his career to the study of patient populations and the research and development of treatments to alleviate pain, suffering, improve quality of life, and save lives. His blog is dedicated to his study of many topics including, but not limited to, debt, deficits, economy, leadership, healthcare, climate, politics, hunger, intolerance, etc. The intent is to disseminate information and open dialogue based upon consideration of information rather than spin.

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