Banning Abortion Might be Economic Suicide

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The United States is up in arms against itself, again.

A confirmed leak from the Supreme Court seems to suggest that Roe v. Wade will be overturned, which takes away one of the cornerstone legislations that upholds the right to abortions on a federal level. States responded exactly how we expected them to; blue states like California and New York immediately voiced plans to reinforce abortion rights within their boarders while red states like Kentucky and Texas are busy dusting off the buzzsaw.

It’s just politicians doing what they do best: pandering to their own voters.

This article will not discuss the morality of abortions, not for fear of online retribution, but because people on either side are so solidified in their stances and immune to opposing voices that appealing to morality will be as effective as snuffing out a fire with paper.

Instead I will center this piece around something more base yet far more effective:

Greed.

Let’s imagine that Roe v. Wade is gone for good. This is the most likely scenario as without a super majority in Congress, the Democrats can not codify abortion rights into law. Any executive orders from the President would be struck down before the ink dries by a Supreme Court that has made its opposition clear.

In such a world, abortion rights will fall to state legislations. The probability of any state holding an ambiguous stance on the matter is slim, as most states already have a very clear opinion on the issue. Any ambiguous policies at the state level will anger people on both sides and immediately be challenged in court before being resolved in favor or against abortion. Therefore, the country’s future landscape is easy to anticipate: strong abortion rights on the coasts and virtually no abortions allowed in the middle.

Where the states currently stand on abortion rights. Credit: WSJ

The short term implications will be clear enough: women in restrictive states will face significant if not functionally impossible barriers to undergo abortions, and most state level politicians will see a boost of political support. All the while there will be logjam on Capitol Hill, as neither party holds enough power to force the issue into a constitutional amendment to their desired end. Inability to act at the federal level will only strengthen the power of the states’ decisions.

In the longer term future, however, the decision to ban or support abortion could prove the start of material changes to the individual states’ power within the union.

As made obvious by the 2021 data from the Pew Research Center below, there is a clear trend between a person’s level of education and their view on the legality of abortion. Now let me make it clear: I do not discriminate based on education levels. People live widely different lives and not everyone need, should, or can afford to go to college.

While it is possible to live good and fulfilling lives regardless of one’s education level, a simple fact is that the types of industries and employers who employ highly educated workers are those dearly desired by every state. These are the industries of technology, finance, business services, etc. Lines of work that creates large numbers of well paying, stable jobs.

Oh and if you think the bourbon state of Kentucky is going to shun the smoothie drinkers of tech or finance, just remember their $2.5 billion bid for Amazon’s HQ2. In fact, 42 out of the 50 state submitted bids to the Seattle based tech-giant, eyeing the economic benefits of 50,000 high paying jobs.

Despite the tech industry’s clear lean towards liberal politics, when the money flashed hardly almost all the red states tried to grab their share.

Banning abortion could make it much harder for states to attract these highly desirable employers.

When Texas signed Senate Bill 8 into law restricting abortion within its boarders, it pushed 1,400 Texans out of the state each month to seek abortions in the neighboring states of Kansas, Louisiana, Mississippi, and Oklahoma. Once Roe v. Wade falls, these states will quickly join Texas in its abortion ban, which effectively renders the procedure impossible for Texan residents.

In the tech world where well funded companies are constantly competing with one another to attract a limited supply of highly educated workers, employees hold a lot of leverage and employers bend over backwards to appeal to them. Disney’s reversal from a neutrality to firm opposition towards Florida’s “Don’t Say Gay” law is a recent example demonstrating companies’ need to keep employees happy, as was Salesforce’s offer to relocate its Dallas based workforce after the passing of Senate Bill 8. Although few other companies followed Salesforce’s example then, it is not difficult to imagine companies taking a much more proactive stance once the repeal of Roe v. Wade changes the risk to reward calculus on a nationwide level.

Highly educated talents who both overwhelmingly support abortions and are highly employable in most states will be asking themselves a simple question when their own states move to ban abortion:

Why not leave?

The long term economic impact of banning abortion does not look good either.

Research analyzing the effect of restrictive policies have found that they are likely to result in less women participation in the workforce, lower average education level for women, and a higher percentage of children raised in poverty. All of these are negative indicators that tend to point towards towards undesirable economic development and could erode the vibrancy of any workforce in a time when economic growth becomes increasingly challenging.

At the end of the day, abortion is a deeply, deeply personal issue. Having adopted a tone of political neutrality throughout the article for the sake of alienating no one, I confess that I like everyone else passionately support one side of this argument. However, as cathartic and easy as it is to scream at people who disagree, insults and aggression will only destroy any attempt of having an actual conversation.

As a mere mortal with all the accompanying imperfections, I harbor no illusion that my thoughts are close to being free of mistakes. However, as my specialty lies in finance and economics, I wanted to add a perspective that is lacking in the current conversation around this topic.

What ever your opinions, I hope this article was able to add to the dialogue in a constructive and useful manner. Remember, most supporters of abortion are not devil worshipping baby killers and most opposers of abortion are not disgusting scumbags who see no value in women’s rights. To disagree is the essence of democracy, as long as we can also seek common ground through civilized discourse.

So while the title of this article was provocative by design to draw people into the conversation, as the discussion continues, please be respectful to one another.