Gina Raimondo doesn't “know why any woman would want to live in a state that criminalizes full access to health care.” The assertion by the 40th U.S. Secretary of Commerce is especially relevant after the Supreme Court's 6-3 ruling on Dobbs v. Jackson Women’s Health Organization in June that upheld a Mississippi law conceived to overturn two landmark decisions — Roe v. Wade in 1973 and Planned Parenthood v. Casey in 1992 — conferring the almost half century constitutional right to obtain an abortion. Already in 2022, twice as many abortion clinics closed, mostly in the South and Midwest, than in 2021 since the Supreme Court decision.
“Healthy workers are more productive,” Raimondo said during a Zoom interview after accompanying President Joe Biden to the building site in Phoenix last week for a new computer chip plant for Taiwan Semiconductor Manufacturing Co. “They show up every day, on time, ready to work - so I think states that provide better access to health care enable a more productive workforce.”
Raimondo is the former venture capitalist and first woman elected and re-elected governor of her native state of Rhode Island, where she mended a pension system on the brink of collapse, fixed a crumbling transportation infrastructure, forgave student-loan debt, tripled the number of pre-kindergarten classes and guaranteed that every child can attend all-day kindergarten. She recruited more than 30 companies to Rhode Island, where unemployment plummeted to 3.4%, or 3.1 percentage points below its 30-year average and almost half the rate when she took office in 2015.
“You have to do more than just deregulate and lower taxes to drive growth and attract business,” she said. “You also need high quality of life, high quality health care, high quality public schools, a well-trained workforce, and a place people want to live.”
Raimondo, a 51-year-old economist and Rhodes Scholar with degrees from Harvard, Oxford and Yale universities, added another bulwark to her state's competitiveness when she signed into law the Reproductive Privacy Act in 2019, protecting abortion rights by anticipating the Supreme Court's repeal of Roe v. Wade. She isn't “at all surprised” to see data showing publicly-traded companies in the 11 states where abortion is illegal — Alabama, Arkansas, Idaho, Kentucky, Louisiana, Mississippi, Missouri, Oklahoma, South Dakota, Tennessee, Texas — are less diverse, less profitable and less productive than the U.S. average for big and small firms alike and, by these same measures, inferior to companies in the 10 states that expanded access to abortion — Washington, Oregon, California, Minnesota, Illinois, New York, Vermont, Connecticut, New Jersey, Pennsylvania — since 2020, according to data compiled by Bloomberg.
To be sure, there are many determinants beyond reproductive rights that explain why companies in some states outperform their peers in other states. “The best-performing companies are the ones who are able to attract, recruit, retain and develop the top talent,” Raimondo said. “That means men and women” and women, especially, “are going to want to work in companies and in states where they can have full access to health care, including reproductive health care.”
The Supreme Court decision giving states the power to ban abortion is proving so unpopular that voters in Kansas, by an overwhelming margin (59%-41%), rejected a proposed constitutional amendment in August that would have removed the right to an abortion in the state’s constitution. Similar referendums were rejected on election day last month in Kentucky and Montana, as Americans across the nation turned out to vote for reproductive freedom. The issue “was not about whether or not you approved of abortion, but who was in control of making the decisions for women's health,” Ann Mah, a Democratic member of the Kansas State Board of Education, told the Kansas City Star. “If you wanted to turn your daughter's health care over to the state legislature, then you voted yes. And if you trusted women to make their own decisions you'd vote no.”
The U.S. economy already is suffering the economic consequences in states that have criminalized abortion. In the 10 states that enshrined reproductive freedoms since April 2020, as the COVID-19 labor market began its recovery from the worst recession since the Great Depression, non-farm payrolls increased an average 18.3%, compared with 16.9% for the country as a whole, according to data compiled by Bloomberg. The 11 states criminalizing abortion lagged behind with 15.1% job growth. Since the beginning of 2022, employment in the 10 states guaranteeing the right to abortion climbed 2.8%, exceeding the nation's 2.5% rate and easily surpassing the 2.3% for the 11 states that criminalized reproductive rights. The labor participation rate for women in the states criminalizing abortion is 56%, or 9.5 percentage points lower than it is for men, and below the 60% and 9.3 percentage points rates for the 10 states protecting reproductive freedom.
Corporate America already shows diminished diversity in places where abortion is criminalized. The 500 publicly-traded companies with a stock market value of at least $200 million that are based in the 11 states where abortion is illegal have women among only 20% of their executives, 27% of their managers and 35% of their employees, compared with 24%, 31% and 41% disclosed by the 1,600 companies based in the 10 states where abortion is legal. Companies in states guaranteeing reproductive freedom also are more diverse than the entire group of Russell 3000 Index firms, according to data compiled by Bloomberg.
Companies based in states where reproductive freedom is assured outperformed the Russell 3000 and their peers in the 11 states where abortion is a crime, with earnings coming in 1% greater than estimates on average during the past three years, while those where it is illegal saw results fall 74% below estimates on average. Earnings for members of the index overall came in 9% below estimates. Firms in the pro-choice states also reported $183 million of profit per 1,000 employees during the past three years as Russell 3000 firms reported $155 million and companies in abortion-prohibited states made $91 million for the same amount of workers, according to data compiled by Bloomberg. Productivity for firms in pro-choice states increased 485% compared with 380% for the Russell 3000 and proved superior to the 190% for firms in states where abortion is illegal.
“If I were still a governor, I would look at this data as a huge opportunity,” said Raimondo. “I'd be going to these states at the top of the [illegal abortion] list and actively recruit those companies to my state. If you look right now at inflation and what continues to drive inflation is this stubborn tight labor market, enable women to work at their full productivity level. If you have more labor in the labor force, inflation will be reduced. That's an economic fact.”
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(With assistance from Shin Pei and Daniella Goncalves.)
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ABOUT THE WRITER
Matthew A. Winkler, editor in chief emeritus of Bloomberg News, writes about markets.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
