Amazon and the Economics of Inclusion

Recently, several finalist cities for Amazon’s HQ2 have come under scrutiny because of their home state’s indifference or active opposition to LGBTQ rights. Many argue that it should be a disqualifying mark. Amazon itself has stated that in order to be chosen, a city must demonstrate a “compatible cultural and community environment,” as well as “the presence and support of a diverse population.”

This underscored for me perhaps the most baffling constant in today’s exceedingly baffling political climate: just how often voters and constituencies act against their own economic self interest all in the name of some hazy political notion or slogan. And the damage discriminatory policies can do to a state’s economy and its entrepreneurial community can be profound.

Amazon’s HQ2 is only the latest and, perhaps, most high-profile example of the economic dangers of discrimination. It is now estimated that LGBT businesses contribute more than $1.15 billion to the national economy, according to the National Gay and Lesbian Chamber of Commerce. Needless to say, most, if not all, of that revenue is happening exclusively in, ehem, inclusive states.

Studies examining the economic impact of discrimination on entrepreneurs are rare but StartOut, a non-profit that seeks to empower LGBTQ entrepreneurs, conducted a study in 2016 that showed that “states with policies unfriendly to the LGBT community lost many, if not all, of their nascent growth entrepreneurs before they founded their companies.” All told that translated into more than 1 million jobs lost by discriminatory states to inclusive ones between 2005 and 2015.

Is it surprising, then, that last week in Ohio almost 300 entities (from heavyweights like P&G and Abercrombie and Fitch to scores of mom and pop shops) lined up behind lawmakers in their efforts to add sexual orientation and gender identity to the state’s non-discrimination laws?

Columbus, OH, it should be noted, is one of the 20 finalists for Amazon’s HQ2.

All of this is to say that it’s not just about equal rights and fairness, which it is. It’s also about common sense. Losing out on mega economic development projects, like Amazon’s HQ2, because of discriminatory policies is one (incredibly unwise) thing. But equally self-inflicting are the countless smaller ways in which discrimination can be economically crippling for a state’s entrepreneurial class, particularly to rural communities that desperately need entrepreneurs to help revitalize those economies.

It’s important to be a voice for inclusion. Not only because it’s the right thing to do but also because you’d be a fool to do otherwise.