CEOs will look past abortion bans, too

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NEW YORK, June 27 (Reuters Breakingviews) - The demolition of the constitutionally protected right to an abortion in the United States is historic. But for companies doing business in America, the cost-benefit analysis it provokes will feel familiar. Corporate bosses will end up viewing America’s illiberal states the way they do any emerging market.

Each state will be left to decide how and whether to regulate abortion after the Supreme Court on Friday decided that protections of “life, liberty, or property” don’t include ending a pregnancy as a right. At least eight states had already banned the procedure by Monday, and around half of the 50 are primed to outlaw it under statutes already in place.

Removing access to abortion could increase maternal deaths by over one-fifth, according to Duke University, and Black maternal deaths by one-third. Recognizing the anxiety, companies have moved to reassure their staff: Facebook owner Meta Platforms (META.O) and Goldman Sachs (GS.N) are among those offering to fund travel costs for employees who need to go out of state for healthcare and reproductive services.

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But if the majority of Americans who oppose the overturning of Roe vs. Wade hope their large, powerful employers will do more, they will be disappointed. Multinationals long ago made peace with setting up shop in locations where freedoms taken for granted in some countries are limited in the name of stability or ideology. Foreign direct investment into China surged by a third to $344 billion last year, according to Peterson Institute for International Economics. Net foreign investment in Saudi Arabia jumped more than threefold in 2021, according to state media.

China and states like Texas are in that way somewhat similar. The Lone Star state offers low taxes, good universities, rich natural resources, and scale. Accepting bans on abortion is simply the cost of doing business for companies like Goldman Sachs and Apple (AAPL.O). So is turning a blind eye to the governing Texas Republican Party’s recent declaration that “homosexuality” is “an abnormal lifestyle choice,” an awkward reality for companies that trumpet their commitment to diversity.

Emerging-market attitudes don’t always create economic success for nations – or states. Mississippi, for example, has no Fortune 500 companies headquartered within its borders. It’s also the state with the least well-functioning healthcare system in the country, according to the Commonwealth Fund. Even then, there’s a price at which growth looks attractive. JPMorgan (JPM.N) opened its first branch in the Magnolia State last year.

When asked how they feel about draconian governments in profitable places, company bosses often say that they follow the laws wherever they operate, and it’s not their job to challenge what those laws are. Investors mostly acquiesce. America is now another place for them to practice that line.

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Several U.S. states had moved to ban abortion within days of the Supreme Court overturning a landmark ruling that had affirmed abortion as a constitutionally protected right.

Thirteen of the 50 states already had so-called trigger laws designed to be enacted as soon as the Roe vs. Wade decision of 1973 had been struck down. Some ban abortions completely, while others outlaw them after a certain number of weeks.

Nine states, including Texas, Missouri, South Dakota and Oklahoma, were classed by the Guttmacher Institute as having “most restrictive” policies in effect as of June 27. Eleven, including New York, California, Oregon and Illinois, were labeled “protective” or “most protective.”

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Editing by Lauren Silva Laughin and Amanda Gomez

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