Op-Ed

Potentially $5 billion in losses from HB2 and still no repeal

In 2015, NBA Commissioner Adam Silver announced Charlotte would be the site of the 2017 NBA All-Star basketball game. Because House Bill 2 limits anti-discrimination protections for lesbian, gay and transgender people, the NBA backed out.
In 2015, NBA Commissioner Adam Silver announced Charlotte would be the site of the 2017 NBA All-Star basketball game. Because House Bill 2 limits anti-discrimination protections for lesbian, gay and transgender people, the NBA backed out. AP

North Carolina’s House Bill 2, an anti-LGBT law that revokes local nondiscrimination protections, is undoubtedly bad for the state’s LGBT community. But as the NBA’s decision to move the 2017 All-Star Game from Charlotte shows, it’s also proving to be bad for North Carolina’s economy – and particularly for the state’s nearly 800,000 small businesses.

These businesses play a crucial role in creating local jobs and more vibrant communities around the state, but HB 2 is threatening their success by driving away customers and employees. Repealing the law is the right thing to do for North Carolina’s small businesses.

Since HB2 passed, the economic impact to North Carolina has been significant and swift as corporations and individual customers have taken a stand against the bill. For instance, PayPal canceled the creation of 400 jobs in the state almost immediately after the bill became law. Additionally, the City of Charlotte has lost an estimated $285 million in canceled events, with another $100 million in losses recently added following the NBA’s decision. In total, a report from UCLA estimates the law may cost the state up to $5 billion a year.

For small businesses, this means fewer customers, a drop-off in tourists and less money flowing into the local economy – and that can be harmful or even devastating. Juli Ghazi, owner of Pure Pizza in Charlotte, has experienced this impact firsthand.

“My pizzeria is right near the Convention Center, and I was counting on the All-Star game to bring in thousands of dollars in revenue,” Ghazi said. “I was going to invest that money in my business and employees. But now I can’t because of HB2.”

HB2 hasn’t only driven away customers from North Carolina. It’s also affected small businesses’ ability to attract and retain a strong workforce, because many talented LGBT employees – and those who care about them – don’t want to move to a state known for discrimination.

“My company can’t be successful if I don’t have a top-notch workforce,” said Tony Cope, owner of Myriad Media in Raleigh. “The reality is, though, that many talented people simply don’t want to live and work in a state that has discriminatory laws. There’s no doubt that HB2 is thinning North Carolina’s talent pool at the expense of small employers.”

The numbers show that small-business owners in North Carolina and around the country are on the same page. Small Business Majority’s polling found 67 percent of North Carolina entrepreneurs believe the state should have a law prohibiting employment discrimination against gay and transgender individuals. Plus, more than 6 in 10 North Carolina entrepreneurs agree laws protecting employees from discrimination help boost bottom lines because they enable employers to attract the best and the brightest.

Additional polling found 8 in 10 small business owners across the country support a federal law to protect LGBT individuals against discrimination in public accommodations, such as restaurants, hotels and other businesses open to the public.

Around the country, other states have recognized the harmful economic effect of anti-LGBT laws. Indiana walked back its religious exemption measure after the state quickly lost around $60 million in canceled events. Georgia decided not to move forward with a similar law after seeing it could cost the state up to $2 billion in lost revenue. These states are moving forward while North Carolina is falling behind.

North Carolina can’t afford to continue to hold a national reputation for discriminatory laws. Small-business owners keep North Carolina’s economy strong, but they can’t do that if they can’t keep talented employees and loyal customers – and HB2 is driving away both. If North Carolina’s lawmakers and leaders care about the state’s small businesses, they’ll do the right thing and repeal HB2.

Chris Armstrong is director of special initiatives at Small Business Majority.

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