If Texas is a test for how socially conservative US states will fare economically in the post-Roe world, then they’ll hold up just fine.
More than a year after passing the country’s most restrictive abortion law, Texas boasts the largest number of Fortune 500 company headquarters of any state. In the latest sign of the Lone Star State’s enduring allure, Chevron Corp. announced plans to relocate workers to Houston just hours after the US Supreme Court struck down Roe v. Wade.
Other southern and Mountain states have been a magnet for Americans in recent years, a trend that accelerated during the pandemic and boosted growth in cities across Florida, Arizona, Idaho and Utah. These states, led by Republican governors, are now all trying to further restrict abortion -- if not outright ban it.
“There will no doubt be people who won’t come to Texas or other southern states as a result of these policies, but, by and large, these things are determined by the dollars and cents,” said Brandon Rottinghaus, a political science professor at the University of Houston. “Businesses are getting more or less what they want from Texas -- that is low taxes, modest regulation and the freedom to influence their own destiny.”
Texas has for decades hung its hat on being a business-friendly state. Its population boom propelled it to the second-biggest economy, after California, and it’s among the fastest-growing in the past 20 years. None of the restrictive laws passed by the state legislature and signed by Republican Governor Greg Abbott are threatening its prosperity in the foreseeable future.
Even Austin, long a liberal bastion, hasn’t seen a brain drain.
The economic risk is over the long term. Some state politicians, emboldened by a conservative Supreme Court, are already talking about punishing businesses that fund employees’ out-of-state travel for procedures. Reproductive-rights advocates have warned that in-vitro fertilization treatments could also be targeted. That would slowly chip away at the influx of people and companies willing to move to those places.
For now, low taxes on corporations and plenty of incentives outweigh any concerns about politics, reproductive rights and widening inequalities.
Texans, whether newcomers or natives, are unlikely to leave. The state is the “stickiest” in the US, retaining more of its population than any other, according to a study by the Dallas Federal Reserve’s Pia Orrenius and Madeline Zavodny of the University of North Florida.
“Very few people leave Texas, largely because of abundant economic opportunities,” the economists wrote, adding that the state has an above-average business formation rate.
A low cost of living and plenty of space don’t hurt, either. Chevron specifically cited lower housing prices in its offer to relocate employees from California, where the median home price is more than double that of Texas.
Diversified Economy
A relentless focus on growth has helped diversify the state’s economy beyond energy.
The Metroplex, home to Dallas and Forth Worth, has seen an influx of financial services firms. Houston, once mainly an oil town, is home to the world’s largest children’s and cancer hospitals. Austin, Texas’s capital, has blossomed into a major tech hub -- Telsa Inc. and Oracle Corp. are among the latest high-profile arrivals.