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The economic effects of voter suppression

From Forbes magazine last week:

The Texas economy could take a massive hit if the state enacts new voting restrictions—potentially costing the state’s economy tens of billions of dollars and tens of thousands of jobs—according to a study from the Texas-based economic research firm the Perryman Group, as the Texas legislature Thursday moved one step closer to making the proposals.

  • The potential loss of conventions, major sporting events and tourism could cost the state $16.7 billion in annual gross product by 2025, and nearly 150,000 jobs, according to the study.
  • Internal factors, like decreased business activity and lower wages in the state, could lead to the loss of $14.7 billion in household purchasing power by 2025, according to the Perryman Group.
  • Retail trade would take the biggest hit, according to the study, losing more than 50,000 jobs from drops in tourism and economic development alone.

[…]

“If you strip away all of the emotion and all of the politics and say ‘this is just what happens in the economy,’ that is what we’re analyzing,” Dr. Ray Perryman said in an interview with Forbes.

Perryman said his firm’s modeling relies on 40 years worth of data and academic research, which has consistently shown voting laws that are restrictive or have “the appearance of discrimination” lead to negative economic impacts. The negative impacts are already being seen in Georgia, Perryman said. The long list of companies condemning the state’s new law will likely mean fewer conventions in Georgia, which mean fewer visitors spending money in the state, while some socially conscious travelers also choose to stay away. The resulting domino effect and supply chain reaction will likely mean the economy takes a major hit, Perryman said.

There wasn’t much detail in that story, nor was there a link to the study in question, but Reform Austin filled in those gaps.

The Perryman Group looked at the two different buckets for the economic impact of the bills. The first was internal losses, which is what happens in the Texas labor market as it relates to earnings, employment losses and the spillover on household purchasing power. The second was external losses, which comes from reduced travel and tourism and economic development.

Decades of research showing restricting ballot access to certain groups has adverse impacts on their earnings. These lower earnings also impact workforce participation and employment, which in turn affect household budgets and consumer spending. The report found Texas could lose $9.4 billion in personal income, $14.7 billion in annual gross product and 73,000 jobs over the next five years with the proposed voting restriction measures.

Based on survey information, The Perryman Group has an idea of how many convention planners avoid states for controversial laws, like HB 6 and SB 7, to avoid an appearance of supporting the policy. The most recent national example is the MLB decision to move the All-Star game away from Atlanta for Georgia’s voting restriction laws. A single conference could cost Texas $54 million. A lost Super Bowl hosting opportunity could cost Texas $1.75 billion.

The study also looked at socially conscious consumers who have been shown to avoid such areas for travel, be it for business or leisure. The report estimates Texas could lose $4.1 billion in personal income, $6.6 billion in annual gross product and 60,000 jobs in the tourism sector over the next five years due to the proposed voting restriction measures.

On economic development, controversial laws tend to diminish the ability to attract knowledge workers and the companies that employ them for economic development. The report estimates Texas could lose $6.3 billion in personal income, $10.1 billion in annual gross product, and 89,000 jobs over the next five years because of the proposed voting restriction measures.

All of this impacts the tax base of the state and local governments. Not included in the fiscal notes of either bill are the estimates in the report of $832 million in direct losses to state coffers and $454.6 million in direct losses to local governments over the next five years. As for external losses due to reduced tourism and economic development, the state gets hit by $1 billion and local governments get hit by $802.5 million by 2025.

The study is here. Ray Perryman is the go-to guy for media-based economic forecasting, and I give him credit for addressing questions like these. I have no idea how to evaluate something like this – there are a lot of assumptions being made, and it’s not clear to me how many of them are based on past experience – but as we’re unlikely to get any kind of rebuttal from the Republicans, whose main arguments are basically “nuh uh, no it isn’t”, this is what we have. I’m happy to bring all the ammunition we can against this travesty, but the case against the current bills that will make it harder to vote is that they are anti-democratic, deeply racist, based on egregious lies, and wouldn’t actually do anything to solve the “problems” they claim they will even if one were to accept that there were such “problems” in the first place.

The problem with basing the argument against SB7 and HB6 on economic claims is that there’s no way to adjudicate them later on. If the Texas economy does more or less what it’s expected to do in the years to come, especially if it gets the boost that it should from the Biden infrastructure plan, then that gives the vote suppressors the opportunity to claim an undeserved victory. The case against making it harder to vote is that it’s wrong to make it harder for people to vote, especially when you make it a lot harder for some people than for others. Let’s not lose sight of that. The Current has more.

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