Economist Thomas Sowell once wrote, “Prejudice is free but discrimination is expensive.” Executives from two competing firms may be equally prejudiced, but the one who discriminates suffers a competitive disadvantage versus the one who does not. A business incurs costs by promoting less talented workers as a means to repel skilled, talented, job candidates. Yet I see businesses and, indeed, entire states, put at a disadvantage by discriminating among people based on sexual orientation and gender identity.
In states where private companies and government simultaneously discriminate, potential talent will eschew those areas for more equitable environments. I’ve lost count of the times I’ve seen talented out-of-state job prospects express concern about moving to Utah — where Overstock.com is based — because of the state’s long-standing opposition to marriage equality. And while Overstock.com has long had an explicit policy of nondiscrimination based on sexual identity and has long extended special attention to enhancing the work environment for LGBTQ employees, we are more the exception in Utah than the rule. This gives talented potential transplants reason to question the wisdom of relocating to Utah.
Simply, employers lose when they discriminate based on sexual identity, and state governments fail when they fail to protect workers from discrimination or extend the equal right to marry to all individuals.
In my perfect world, government would not be involved in any couple’s marriage any more than government would be involved in First Communions: governments would issue civil unions only (ironically, it seems that some have forgotten that, in this context, the word “civil” means that it is a matter for the government). In such a world, individuals would be free to embellish their civil unions with marriage as it is understood and practiced within their private associations (churches, temples, shamans, mosques, ski lodges, etc.) Such a solution is attractive to pro-freedom people such as myself because it would give the LGBTQ community completely equal legal rights without compelling antifreedom people to accept a definition of “marriage” incompatible with their private values. However, since this solution, though obvious, is absent from the discussion, and we remain in a situation where government recognizes some marriages, I believe it is a heinous affront to decency that in doing so it discriminates based on the sexual orientation of any citizen.
Thus, for all the many reasons I have for supporting equality, and legislation such as the Employment Non-Discrimination Act, I add yet one more: economic development. I believe that until states in the interior of the nation take steps to foster a more LGBTQ-friendly legal environment, they will always struggle to draw talented workers away from more accommodating states, thereby keeping a vitally entrepreneurial and creative state like Utah from reaching its economic potential.
Success in business demands access to talented people, and state governments intent on promoting economic growth should not discourage any subset of the population from participating. Yet this is exactly what workplace discrimination does. Antifreedom states and businesses will find it increasingly difficult to compete with pro-freedom ones. Darwinian selection will not favor firms that discriminate.
PATRICK BYRNE is the CEO of Overstock.com