Recently published research highlighted by the Harvard Business Review found that states with laws that ban employment discrimination against LGBT Americans saw a direct increase in business innovation -- counter to right-wing media myths that such laws result in negative interference in the market.
According to a study published on June 15 by the journal Management Science, “state-level employment nondiscrimination acts (ENDAs) -- laws that prohibit discrimination based on sexual orientation and gender identity -- spur innovation” among firms headquartered in those states. The study’s authors -- finance professor Huasheng Gao and economist Wei Zhang -- published an op-ed on August 17 in the Harvard Business Review highlighting their findings that states that protect employees with ENDAs see an increase in innovators moving to those states and a boost in business productivity. The research found that “firms headquartered in states that passed ENDAs experienced an 8% increase in the number of patents and an 11% increase in the number of patent citations, relative to firms headquartered in states that did not pass such a law.” The researchers concluded that this change was a result of individuals moving based on their approval or disapproval of the change in the law and theorized that “pro-LGBT individuals are likely to be more creative than the anti-LGBT ones” leading to companies in states that prohibit workplace discrimination having broader access to more creative talent:
We looked at data for thousands of firms — almost all U.S. public firms that actively filed patents — from 1976 to 2008. We found that the adoption of ENDAs led to a significant increase in innovation output. On average, firms headquartered in states that passed ENDAs experienced an 8% increase in the number of patents and an 11% increase in the number of patent citations, relative to firms headquartered in states that did not pass such a law. These results start to show up two years after the adoption of ENDAs and largely are driven by firms that previously did not implement non-discrimination policies, by firms that operate in human-capital-intensive industries, and by firms in states with large lesbian, gay, bisexual, and transgender (LGBT) populations.
These findings contradict years of right-wing media myths falsely claiming that protecting LGBT people from discrimination curbs free market innovation and hurts business. Daily Signal commentator and Heritage Foundation fellow Ryan Anderson claimed that the passage of nondiscrimination laws for LGBT Americans would “foster economically harmful government interference” and that this interference could result in “potentially discouraging job creation.” In an op-ed for CNN, Peter Sprigg of the Family Research Council -- an extremist organization designated as an anti-LGBT hate group by the Southern Poverty Law Center -- pushed the myth that banning discrimination would be be tantamount to “federal government interference in the free market.”
Right-wing claims that banning employment discrimination against LGBT people would hurt business are often followed with the myth that nondiscrimination laws are unnecessary. The Boston Globe columnist Jeff Jacoby misleadingly argued that, save for “occasional incidents of bigotry … there is no urgent crisis in the treatment of gay and lesbian employees,” because “free markets” have already rooted out systematic discrimination.”
Contrary to myths promoted by right-wing outlets that ENDAs are unwarranted, the Williams Institute found that “widespread discrimination” against LGBT employees remains a problem in American workplaces. American workers still face discrimination based on their sexual orientation and gender identity, and the results outlined in the Harvard Business Review show that laws prohibiting such discrimination are beneficial to both workers and businesses, regardless of right-wing media claims.