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'Really Bad For Business': The Roe Reversal Could Alter The Fortunes Of States Like Pennsylvania

Pennsylvania has been an electoral battleground state for years, but this November's midterm fight sets up a new front that could have costly economic development repercussions.

Abortion rights are on the ballot in the Keystone State — and in about a dozen others where legislative and gubernatorial races will be key to transforming the nation's reproductive rights landscape following the U.S. Supreme Court's controversial reversal of Roe v. Wade late last month.

The uncertainty is forcing companies to integrate personal politics into business decisions more than ever before, especially when it comes to their locations.

The Pennsylvania State Capitol in Harrisburg

Over a dozen states passed laws banning abortion that were triggered when Roe fell, and others have governors or state legislative leaders that promise to ban it in short order. The right to an abortion is protected in a few states' constitutions.

Pennsylvania is in neither boat. Facing an upcoming gubernatorial election with no incumbent and a state legislature likely to remain under Republican control, abortion rights hang in the balance for the commonwealth.

At least one Pennsylvania company, Pittsburgh-based language learning app Duolingo, has already declared it would leave the state if abortion rights are axed.

"If PA makes abortion illegal, we won't be able to attract talent and we'll have to grow our offices elsewhere," CEO Louis von Ahn said on Twitter June 24, just after the decision came down.

What von Ahn is saying publicly is what many companies may be whispering behind closed doors, multiple experts told Bisnow.

“Great organizations are made great because of the people that work there,” said Maurice Schweitzer, professor at the University of Pennsylvania’s Wharton School of Business. “And it doesn’t matter what your tax rate is if you can’t attract great people. So I do think that [von Ahn’s] statement reflects reality, even if it took a little courage to stand up and say it.”

In the social media era, amid the rise of political awareness and activism sparked by widespread protests against police brutality in the summer of 2020, employees are increasingly holding companies accountable for stances on political issues that aren’t always germane to the work they do.

That might not be enough to get most companies to pick up and move. But it plays a larger role than ever in site selection decisions for a company already eyeing relocation.

Protesters gathered around the Supreme Court building in Washington, D.C., the day after a draft majority opinion overturning Roe v. Wade leaked May 3, 2022.

“The paradigm used to be that communities really focused on recruiting companies since they created the jobs, and people would come to the jobs,” Global Location Strategies President Didi Caldwell said.

“Now the paradigm is at least 50-50, if not more, to the side of recruiting talent. Now, communities and states need to focus on recruiting talent. Because they’re going to move for quality of life, the day-to-day considerations they consider important, and companies follow the talent.”

Nearly 60% of Americans strongly disapprove of the Supreme Court’s overturning of Roe v. Wade, according to a June 28 poll conducted by Monmouth University. Yet cost-of-living considerations and lower taxes have put states that chipped away at reproductive autonomy for years, like Georgia and Texas, atop the leaderboard of demographic and corporate movement trends over the past decade.

The Dobbs v. Jackson decision that overturned Roe v. Wade landed with such force it could finally change the conversation, Schweitzer said.

“Roe being overturned has created a much sharper divide between red and blue states,” he said. “Before, a company might have thought about Austin or the Research Triangle in North Carolina being more liberal, or optimistic that those [states] and Pennsylvania have been battlegrounds in the last [presidential] election.

"It might have seemed like the big metros are liberal places to do business, but now we know state-level decisions mean quite a lot, from voting access in Georgia to abortion access across states.”

The corporate response to Texas' abortion ban has been muted so far.

With such a stark dichotomy between the abortion stances of state Sen. Doug Mastriano and Attorney General Josh Shapiro, some companies in the state are preparing for either outcome, even as they offer subtle support for the right to choose.

The largest company in the state in terms of revenue, the Conshohocken-based AmerisourceBergen, shared with Bisnow a statement it sent to employees earlier this week, which reads, in part:

"When it comes to choices regarding healthcare, AmerisourceBergen recognizes individuality — specifically that health care decisions are best made between an individual and their healthcare provider. To live up to our principle to act together, we'll do our part to ensure that, when those care decisions are made, services will be accessible for AB team members across the United States.

Moving forward, AmerisourceBergen will ensure — to the best of our ability as an employer — that our benefits plans provide reimbursement for travel and lodging expenses when a team member or their covered dependent must travel to access quality medical providers and facilities. This update expands existing travel reimbursements as part [of] the commitment to health equity and healthcare access that informs the benefits programs we offer."

Among companies that have publicized the amount of travel reimbursement they offer, upper limits generally range from $2K to $4K. Pittsburgh-based Dick's Sporting Goods has committed to up to $4K in travel reimbursement for all U.S. employees forced to travel to another state for abortion access.

Pennsylvania's upcoming election could decide whether employees in the state will need those payments. And many companies are likely to use more than just words to influence the outcome in November, said Ernie Jarvis, founder and CEO of tenant-focused brokerage Jarvis Commercial Real estate.

“There is a bottom-line effect to these [Supreme Court] decisions, even aside from arguments within companies about the morality of the issues,” Jarvis said.

After previous federal election cycles in which AmerisourceBergen’s donations were split fairly evenly between Republicans and Democrats, 65% of the company’s political donations have gone to Democrats since 2021, according to campaign finance watchdog Open Secrets.

“I wouldn’t be surprised if behind the scenes, [companies are] talking with lawmakers to try to temper their positions, but at the end of the day, you want to just follow the money," Schweitzer said. “The Republican Party used to be the pro-business party, but this is really bad for business.”