Equal rights may seem separate and distinct from economic development but in fact they can be, and have been in the past, closely linked. The rapid economic development of the south did not occur until some of the customs and conventions of the south began to mirror those nationwide. During the days of Jim Crow laws and de jure school segregation many business firms were leery about relocating here.
As cultural conditions changed, firms began to respond to the advantages of relocating to the south, specifically our low wages and Right to Work status. The result of these relocations can be seen here in Arkansas. In 2019, the US unemployment rate was 3.5 percent, during the same time period in Arkansas the unemployment rate was 3.4 percent. But our success in the area of employment, because of our low labor costs, has come at a cost. In terms of median household income in 2018 Arkansas ranked 48, beating only Mississippi and West Virginia.
Today, Arkansas and Jonesboro find themselves in what economists call a low-level equilibrium trap. We’re in a situation where we have full employment, but at such low wage levels, that even with full employment we’re still a poor state. The solution for our problem is not more employment, but a shift from low wage employment to high wage employment. Which brings us back to the issue of the customs, the culture of Arkansas and Jonesboro?
In a 2019 study of 506 municipalities, conducted by the Human Rights Campaign and the Equality Federation Institute, titled Municipal Equality Index, researchers looked at five areas in municipal governance that impact the rights of non-heterosexual or transgender employees. The areas reviewed were nondiscrimination laws, the municipality as employer, municipal services, law enforcement, and leadership on equality issues. Index scores could range from 100 to zero, with the average score being 60. In Arkansas eight cities were studied, two cities had above average scores, Little Rock and Eureka Springs, five others had positive scores, Jonesboro’s score was zero.
There is an economic argument to be made for supporting LGBTQ rights. Companies that openly support LGBTQ rights are generally better places to work: Skilled candidates are more likely to accept jobs from them, many customers say they are more likely to purchase products from them, and they tend to be more innovative. Likewise, the US Chamber of Commerce Foundation released a report a 34-page report called Business Success and Growth Through LGBTQ-Inclusive Culture, which again found that LGBTQ-inclusive companies attract better talent and decrease employee turnover.
The vast majority of Fortune 500 companies, 91 percent in 2015, prohibited discrimination on the basis of sexual orientation, 83 percent prohibited discrimination based on gender identity, compared to just three in 2000. If a potential hire is already living with their family in a state that protects LGBTQ rights, and a company wants them to move to a state like Arkansas that does not, that worker could be reluctant to take the job. Knowing this, could we reasonably assume that firms that protect LGBTQ rights would not likely consider locating a production facility in a state or city that did not protect the rights of employees they deem vital to their success?
In 22 states there is protection in the public and private sector for sexual orientation or gender identity. Eighteen of the twenty-two (81 percent) are in states that have median household income higher than the national median household income. By contrast, in 27 states (one of which is Arkansas) private employers are able to fire employees for being non-heterosexual or transgender. Twenty-two of these twenty-seven states (81 percent) have median household incomes that are below the national median family income.
We know that correlation is not causation. But in this case it doesn’t matter. Firms that pay above an average wage may be gravitating to non discriminatory places with talented workers following, or talented workers may be gravitating to non discriminatory places followed by firms that pay above average wages. No matter which comes first, the talented workers or the above average wage firms, we (Jonesboro) should want to be part of this process.
We all know that people are afraid to disclose their gender identity or sexual orientation out of fear over being discriminated against or worse terminated from their place of employment. If the city of Jonesboro doesn’t discriminate, why not specify that in its employment handbook so that employers in the city can be held to that standard. By explicitly guaranteeing LGBTQ civil rights we have everything to gain both in terms of economic activity and social progress with nothing to lose.