September 15, 2022

Is Indiana's abortion law bad for business?

Indiana's new abortion law went into effect Thursday, Sept. 15. Businesses, local governments and economists are waiting to see what, if any, economic impact there might be. - Doug Jaggers/WFYI

Indiana's new abortion law went into effect Thursday, Sept. 15. Businesses, local governments and economists are waiting to see what, if any, economic impact there might be.

Doug Jaggers/WFYI

Indiana Gov. Eric Holcomb signed the state’s new abortion law late on a Friday. The next day, Indiana-based corporations Eli Lilly and Cummins released statements saying the near-total ban would make it more difficult to recruit employees. And by Monday afternoon, Illinois Gov. JB Pritzker had a message for Indiana businesses.

“Well, already I’ve reached out to companies that are affected by the ban in Indiana,” Pritzker said. “I want to make sure that they know they’re welcome in Illinois, any expansion that they may be looking to do – that we welcome their employees. We treat workers here well.”

In many ways, pregnant people, hospitals, and OB-GYNs will immediately experience the effects of new abortion restrictions. The timeline for economic repercussions is less clear after the law goes into effect Sept. 15.

“Regardless of your personal opinion on abortion, I don't think most people's opinions of abortion rights are going to be heavily influenced by the economic consequence to the state or county that you live in,” said Ball State University economist Michael Hicks. “That being said, in public policy there are trade-offs, and it's important to know how likely damaging this might be.”

READ MORE: What will Indiana’s new abortion law mean for the state? Law takes effect Sept. 15

Global talent

The employee recruitment question is central, and Hicks said the workforce pool for Eli Lilly and Cummins could be more heavily impacted by the new law.

“I think there are a lot of businesses that won't really be affected by this,” Hicks said. “If you're a logistics firm that has to hire several hundred young people without a college degree, Indiana will have plenty of those workers for some time. If you are a manufacturing firm that hires heavily amongst – you know – middle aged men in a rural county, you would not expect an abortion ruling to have a big influence on those location decisions. The reason Cummins and Lilly spoke up is they are global companies who hire global talent.”

Hicks also said the calculations for companies are bigger than the bottom line.

“It’s the climate here,” he said – and potential employees could view Indiana as a place “incommensurate with their values.”

“A number of businesses are just going to quietly pull away, because they know that many of the workers that they have – what they would like to have working for them, and helping their company grow and prosper – are going to be very uncomfortable moving to a state that…rushed into the abortion debate so ham-handedly,” he said.

'That's something we'll have to live with'

State Sen. Sue Glick (R-LaGrange), sponsor of the Senate abortion bill, isn’t so sure that businesses or employees will avoid Indiana because of the law.

“I doubt seriously whether anyone makes the decision to locate to Indiana or not because they can't have an abortion,” Glick said.

Glick said if companies like Lilly wanted to invest money in other states, “we certainly can't prevent them and wouldn't want to prevent them.”

“They've been a very solid and positive influence on the state of Indiana for 100 years or more,” she said. “But likewise, we've provided benefits to Eli Lilly and other large corporations, tax incentives, financial incentives to bring them here, to give them the opportunity to be successful, to have a very successful business with low cost of living, low tax structure.”

She said Indiana’s abortion law is “not set in stone”, and merits “ongoing discussion.” Glick also said she understands there are concerns from some in the business community about the law’s impact on the available workforce.

“That may be, but if this is the sole reason for their relocation, and that's a deal breaker, then that's something we'll have to live with,” Glick said. “But the people of Indiana are entitled to expect their legislators to reflect their will and their beliefs.”

Eli Lilly and Cummins did not respond to requests for comment for this story.

Local leaders

Beyond the Statehouse, in Indiana cities and towns, local leaders are tasked with attracting both businesses and workers. That means highlighting selling points like a community’s school systems, available housing, and quality of place – a term that can encompass anything from a scenic trail system to a bustling downtown.

The city of Crawfordsville lies 45 miles north of Indianapolis in Montgomery County, with a population of around 16,000 people. Mayor Todd Barton said the city checks a series of boxes when competing for companies deciding where to build or expand.

“Do you have the electricity that we need, and what’s your power rate?” Barton said. “Do you have the water that we need? What are your taxes? They're gonna compare all those basic kinds of things – maybe they need rail access, so that's going to knock, you know, half the people out right there.”

Barton said access to qualified workers is increasingly crucial. He estimates around 250 to 300 full-time jobs are currently available in Crawfordsville, and around 20 percent of those positions sit on the higher end of the pay and skill scale.

“[But] today, one of the key factors that comes into play, that comes into consideration, is workforce,” Barton said. “And that wasn't the case a decade ago, but today, the big question they're going to ask you every time is: if I locate my business or facility in your community, can I get the workforce that I need, both in terms of quality and quantity?”

Now, for some businesses, the abortion law could be added to that checklist.

“And I don't think it's cause for alarm, but it is cause for concern,” Barton said. “Because at the end of the day, they're going to make decisions based on the financial factors, probably more than anything else. But if all things are equal, and something like this comes into play, this will be a factor, because they're going to know – they're going to tell us that this may inhibit their ability to attract that talent that they want, and that they need.”

Barton said that having a fuller discussion of the economic implications of an abortion law during the special session could have allowed businesses and leaders to plan for future issues.

“I mean, this is probably the biggest, weightiest, most difficult topic that most of them [lawmakers] will ever encounter,” he said. “And to try to do it in a rushed special session just didn't make any sense.”

North of Crawfordsville, West Lafayette Mayor John Dennis said the perception of a city matters.

“The feeling about a community is almost as important as the reality of the community,” Dennis said. “You know, and mayors all over the country say, ‘Oh, we're warm and welcoming, and diverse and happy and joyful, and prosperous’...But if the feds are giving us no options, if things go away, and then our state legislature take it to the extreme: That's a problem.”

West Lafayette has attracted significant business investments in recent years, including a future $1.8 billion semiconductor facility. Just this week, Gov. Holcomb was joined by the U.S. Secretaries of State and Commerce at Purdue University, touting the possibility of a “silicon heartland” manufacturing hub.

But Purdue, like other Indiana universities, could see an impact on its enrollment in years to come as a result of the abortion law. 

“But what we in government thrive on is humanity,” Dennis said. “And we need taxes. We need people to live here, we need people to patronize our stores, we need people to go to our sporting events. And if we create an environment where we're saying, ‘we like you, we don't like you, with your choices’, right? Your choice is wrong and shame on you. What does that say, for our community?”

In Zionsville, just outside Indianapolis, Mayor Emily Styron said assessing the impact of the abortion restrictions on the city’s workforce was “tricky”.

“I don't know that this particular bit of legislation is inviting young women to create a career path here in the state of Indiana or at any state that is regulating – they're regulating their bodies, regulating their families, regulating their divine autonomy that they have inherent within themselves,” Styron said.

Styron said Zionsville is in an important moment of economic transition – she wants the city to become a place where residents both live and work. She called the abortion legislation “short-sighted.”

“And I think that it diminishes the opportunities for strong, vibrant economic development decisions in the future,” she said.

But Styron isn’t sure where she’ll fit into that discussion. She said it’s hard to determine if, as a mayor, she will have conversations with developers and business owners about the law.

“I think that those conversations are likely going to be more personal – they're going to be more between maybe parents wanting to persuade students to come back and relocate closer to home,” Styron said. “And those young adults will tell their parents, no, I don't think that's the right spot for me.”

Monticello Mayor Cathy Gross, current president of the Indiana Conference of Mayors, underlined the group’s bipartisan nature in an emailed statement – adding that, as the group’s president, it was not her “place to speak about individual mayor's views on this very complicated and personal issue.”

‘We don’t realize what our economy would be like without it’

Much of the uncertainty surrounding the economic impact of the new abortion law is due to the fact that the constitutional right to abortion had been upheld for nearly a half century.

Amanda Weinstein is an associate professor of economics at the University of Akron. She said the broader economic impacts were not likely to be felt immediately, but over time – and that legislators might not realize the breadth of those impacts.

“And I think when we've had something as long as we've had something like Roe v. Wade in place, we don't realize what our economy would be like without it,” Weinstein said.

She pointed to the landmark Turnaway Study as an example. The years-long research examined the impacts of receiving an abortion versus carrying a pregnancy to term. The findings highlight the increased financial hardship – for both parents and children – which also takes a toll on economies over time.

“So now, when we have more women in poverty, more children in poverty, are we prepared to handle that?” she said.

Weinstein also said the renewed public awareness of personal abortion experiences – such as the 10 year-old rape victim traveling from Ohio to Indiana to receive abortion care – shows how the spotlight on those stories helps shape people’s reactions to policy.

“We didn't think about all of these stories,” Weinstein said. “So now that starts to trickle into the calculus.”

She said businesses might not see a financial impact right away, and believe the abortion law doesn’t affect them.

“But wait until they try and hire that person that doesn't want to come to Indiana anymore,” Weinstein said. “So now it starts to affect that business. Now the businesses are seeing the effect it has on them. And so we kind of have to wait until we hear all of these stories we hear from colleges, we hear from businesses, till we can start to see what these effects really are.”

Contact WFYI assistant editor Emilie Syberg at Follow on Twitter: @emiliesyberg.

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