(ETX Daily Up) – Since the pandemic, more and more tech companies are leaving Silicon Valley for southern states like Texas and Florida, seeing many advantages, including economic ones. Even if it means turning a blind eye to the social policy of these conservative states. Companies prefer to play the “radio silence” card, at the risk of appearing apathetic to their employees.
In recent months, some large multinationals have left California for other US states such as Texas and Florida. These new destinations know how to be attractive, thanks to numerous advantages, namely financial. In May 2021, Florida Chief Financial Officer Jimmy Patronis revealed to Fox Business that 900 people were moving to this state every day for tax reasons at the time. An alternative destination for workers in the San Francisco Bay Area for many years, Texas has welcomed more than 687,000 former Californians since the 2010s, according to the United States Census Bureau. The pandemic has only accentuated this trend.
Tax advantages are not the only reason. It’s also an issue of home prices, which are much lower than in California for businesses and employees.
However, these movements raise social and political questions. These companies and their employees, often seen as progressive, are moving from California, a predominantly Democratic state, to southern states with more conservative values.
On September 1, 2021, Texas signed the SB 8 law that prohibits terminating a pregnancy beyond six weeks, even in cases of incest or rape. Last February, Republican Governor Greg Abbott issued a directive ordering child protection services to investigate parents of children who wish to reassign their gender. A procedure he said “constitutes child abuse under applicable Texas law.”
More recently, in March, Ron DeSantis, the Republican governor of Florida, signed a law banning teachers from discussing “sexual orientation or gender identity” in class in front of students under the age of nine. The law will go into effect this summer.
With this set of conservative measures, will companies continue to install themselves in these states?
“The objective of companies is to make numbers. As soon as they can have lower taxation, they will move to the states that offer it”, comments Jamila Alaktif, professor of administration at ISC Paris, Business School and Visiting Scholar at Stanford University.
A spokesperson for technology company Oracle, which is now based in Austin, Texas, told CNBC of the change that “these changes better position us for growth and provide our employees with greater flexibility in where and how to work.”
Regarding Texas anti-abortion measures, Oracle has not communicated its position, like many other giants such as Alphabet, Amazon, Cisco, Tesla or Samsung. All defend the strategy of “radio silence”, while a large part of the employees of these companies work in the State and could be worried. According to the professor-researcher, the “radio silence” technique is preferred, because “the funder is the number one factor”. “Diversity is the poor relative” of the economy, she says. So much so that any position taken can have economic repercussions.
The perfect example is none other than Disney World in Orlando, Florida. The entertainment company publicly disapproves of the law dubbed “Don’t Say Gay” by critics of Republican Governor Ron DeSantis. Consequence: The latter signed a law on April 22 “removing favorable status” granted to Disney World in the 1960s. A decision that saw the company lose the exemption from various Florida regulations it had enjoyed for decades.
The indifference of companies is heavily criticized, as many of them promote inclusion and diversity within their structures. Is this hypocrisy? This is the case for some, retorts Jamila Alaktif. Because by implementing programs in favor of diversity and inclusion, “companies meet the needs of consumers”. They are neither mandatory nor monitored by an independent institution.
So other companies are taking a stand in their own way, such as covering abortion costs, housing and travel costs “if you need to travel out of state for care.”