As Decision on Roe V. Wade Looms, States Weigh the Economic Cost of Abortion Bans

• A Supreme Court ruling overturning or weakening Roe v. Wade would send the issue of legalized abortion back to the states.
• Opponents argue that abortion restrictions will deter companies and workers from moving to states that enact them.
• Half the business executives CNBC surveyed said abortion laws could impact their location decisions. Only 20% said they would not.

Beyond the moral debate over state abortion bans or restrictions, critics say there is an economic argument against them at a time when workers are in short supply.

"A diverse workforce is so essential to a company's success, and you're trying to recruit women to come work for your company," said Florida State Representative Anna Eskamani. "And they're looking at the landscape of health outcomes and access to reproductive health care."

Eskamani, a Democrat, has had a ringside seat to a different culture war playing out in her Orlando district: the clash between Disney and Florida Gov. Ron DeSantis over the state's Parental Rights in Education Law restricting the teaching of sexual orientation and gender identity topics, which critics call the "Don't Say Gay" law.

After Disney CEO Bob Chapek — under pressure from employees — denounced the law and vowed to work for its repeal,  DeSantis pushed a law through the state legislature to revoke Disney's special taxing district at its Florida theme park.

"This state is governed by the best interests of the people of the state, not by any one woke corporation," DeSantis, a Republican, said at the bill signing ceremony on April 22.

Now, Disney has announced it will delay the move of 2,000 employees in the company's Imagineering division from California to a new campus in Lake Nona until 2026. The move was supposed to begin this year. The company stands to collect $578 million in state tax credits for the move. Under Florida law, the company cannot collect the credits until it creates the jobs.

Disney did not respond to emails from CNBC, but a spokesperson told the Orlando Sentinel that the delay has nothing to with the dispute with DeSantis.

Eskamani does not believe it. She called it Disney's "subtle" way of pushing back, and said this is what happens when politicians wage culture wars.

"It has an economic ripple effect where companies who are trying to attract top talent realize that they can't do that in a state that doesn't welcome a diverse populace," she said.

DeSantis' Deputy Press Secretary Bryan Griffin said the company has not contacted the governor's office about the delay, so he would not speculate about the reason. But he said the state is doing fine regardless.

"Today, our state leads the country in both domestic migration and wealth migration," Griffin said in an email. "Tourism and leisure are major sectors of Florida's diverse economy, and business is booming."

And, Griffin noted, Disney is not the only game in town.

"Disney is an important employer in central Florida, with tens of thousands of employees in the area, but it is not the only major company or industry in Florida," he said.

Political risk

At The Leadership Now Project, a group of business leaders and academics pushing corporations to address threats to democracy, CEO and cofounder Daniella Ballou-Aares worries that the DeSantis-Disney dispute in Florida, and the looming battle between some states and corporations over abortion, signify a growing problem that's more common in emerging markets than in this country: the risk of retribution from an unstable government.

"Fortunately, the U.S. has been seen as a very low political risk environment where you don't need to prepare for those things," she said. "But unfortunately, what we're seeing now is the U.S. is becoming a higher political risk environment. That is terrible for international capital flowing to this country."

Major companies and business organizations have generally kept quiet ahead of the Supreme Court's abortion ruling, though some including Apple and Amazon have said they will pay their employees' travel expenses if they need to travel out of state for reproductive health services.

But even that has incurred the wrath of some Republicans. Republican Senator Marco Rubio of Florida has introduced a bill to prohibit employers from deducting expenses related to abortion-related travel for employees, or for coverage of gender-affirming health care for transgender children.

"Our tax code should be pro-family and promote a culture of life," Rubio said in a statement. 

Ballou-Aares said companies are left between a rock and a hard place.

"CEOs are now in this an untenable position where the political system is critiquing them for doing anything, and their employees and communities are asking them to do more."

'Woke' corporations?

Many executives are siding with their workers, at least for now, even as some politicians deride them as "woke."

In the latest quarterly survey of the CNBC CFO Council, 50% of respondents agreed that it is important for their company to do business in a state where the laws are open and inclusive. Only 35% disagreed.

In the same survey, half the respondents said that if Roe v. Wade is overturned, a state's abortion restrictions would have at least some impact on their location decisions. Only 20% said they would not.

CNBC's America's Top States for Business study will again consider inclusiveness among our metrics as we have every year since 2015, looking at factors such as anti-discrimination protections and voting rights. But because abortion laws — and businesses' attitudes toward them — were in so much flux at the time of our study, they are not a factor in this year's rankings.

What does the future hold?

One longtime critic of business subsidies believes the supposed rift between business leaders and traditionally business-friendly politicians will end when the public, inevitably, grows tired of it. Greg LeRoy of the non-profit group Good Jobs First said it is a familiar pattern seen most recently in the corporate outcry over new voting laws in Texas and Florida.

"Some companies sent signals or stopped giving money [to politicians], but then they eased back in after the headlines have faded," he said. "After a decent interval, when people aren't looking anymore, companies want influence in city hall and state legislatures, and they go right back to political donations and getting big favors in terms of big tax breaks and big incentive packages."

CNBC's 2022 America's Top States for Business report — our 15^th year — is coming July 13.