Texas business leaders this week staked their opposition to proposed Republican bills in the upcoming Texas legislative session, fearing that their passage would potentially cost businesses in the state billions.
The two bills are widely perceived to be anti-LGBT, and, if passed would prevent transgendered individuals from selecting the restroom that aligns with their selected gender identity and would provide legal protections to individuals who objected to same-sex marriage on religious grounds.
The Texas Association of Business (TAB) identified in a recently released report that the passage and implementation of these two bills could cost the state between $964 million and $8.5 billion and nearly 200,000 jobs.
“The message from the Texas business community is loud and clear,” Chris Wallace, president of the Texas Association of Business, said at a news conference announcing the release of the report. “Protecting Texas from billions of dollars in losses is simple: Don’t pass unnecessary laws that discriminate against Texans and our visitors.”
Projected hits and losses
The economic impact study was conducted by researchers from St. Edward’s University and projected the loss of business based primarily on a loss of tourism to the state, and the ability to host prestigious events, such as the upcoming Super Bowl in February 2017 in Houston.
The projections were based, in part, to the fallout that other states, such as North Carolina and Indiana, with similar laws have seen.
North Carolina, in particular, has borne the brunt of the economic impact resulting from similar laws. . Major sporting events, such as multiple NCAA championship events and the NBA All-Star Game, have cancelled and moved to other states.
A growing number of companies, such as PayPal and Deutsche Bank declined to move forward with previously announced plans to expand in the state, costing the economy 650 jobs.
The rift between the TAB and state Republican leaders in the legislature is rare; while their interests seldom diverge, on this topic the gulf appears to be fixed between the two organizations. However, there is not uniformity within the Republican Party on the topic.
The state’s top Republican leaders, starting with Lt. Governor Dan Patrick, have indicated their dedication to filing the bills, in the form of Senate Bill 6, and fighting for their passage in the upcoming legislative session.
“TAB has a track record of partnering with liberal anti-traditional family groups, opposing religious freedom and supporting ordinances that prosecute citizens for believing in traditional marriage,” wrote Matt Shaheen (R-Plano), in a recent blog post on the topic at the Texas Tribune decrying the results of the study.
“TAB recently claimed that the Texas economy would lose billions of dollars unless Texas buckled to political correctness and sacrificed the safety and privacy of women. However, a considerable portion of the lost dollars TAB references are in the idea that Houston would lose the opportunity to host the Super Bowl — a specious claim considering the game is only two months away.
Speaker of the House Joe Straus has gone on record as saying that Patrick’s agenda isn’t “the most urgent concern of mine.”
TAB’s report garnered support from both sides of the aisle, but most notably from Republicans who align with Straus.
“Texas needs to continue to strive for excellence in education, infrastructure, and health,” said State Representative Sarah Davis (R-Houston), a supporter of TAB’s position.
“Those priorities – not divisive issues that won’t move our state forward – deserve our time and attention. We need to protect our tourism industry, attract investment, and provide a healthy environment for small businesses to thrive. I stand with the business community in their commitment to safeguarding the economic health of the Lone Star State.”
However, the populace may be more inclined to agree with Patrick’s camp. In a recent University of Texas/Texas Tribune poll, surveyed voters, and voters which identified as Republican in particular, identified that they aligned more closely with the socially conservative voices, with 51 percent of respondents and 76 percent among self-identified Republicans stating that they felt that individuals should be required to use the restrooms that aligned with their gender at birth.
“Keep Texas Open for Business”
The association moved beyond the mere release of their report in an attempt to forestall the passage of the bills, creating their “Keep Texas Open for Business” initiative. While the effort has not yet seen a large number of businesses join the campaign, those that have include such industry leaders as Apple, IBM, and Intel.
The aim of the initiative is focused solely on defeating bills that would, in the purview of TAB, be discriminatory against the LGBTQ population in Texas.
“Discriminatory legislation is bad for business. Our economic study points to the dire and far-reaching impact of discriminatory legislation on Texas businesses, our communities, families, jobs and the larger state economy,” said Chris Wallace, President of the Texas Association of Business (TAB). “We must Keep Texas Open for Business. We cannot slam the door on the Texas Miracle of openness, competitiveness, economic opportunity and innovation.”
Read the study for yourself
Texans know that anything may happen in a legislative session and that original forms of bills filed rarely look the same upon their passage, if they reach the governor’s desk.
The polarizing positions taken by each side seem to allow little room for compromise; the TAB predicts a catastrophic loss of business and tourism to the state should the bills pass, in any form, whereas the socially conservative Republicans hold dear to the tenet that allowing transgendered individuals to use the restroom of their choice would lead to an unsafe environment for citizens of the state and that the prediction that business and tourism will collapse is a canard.
Ultimately, with the whirlwind of the Texas legislative session upon us, a wait-and-see approach is the only one that both sides can take with clarity.
The complete economic impact study is available online at http://KeepTXOpen.org/Study.
What small business owners can learn from Starbucks’ new D&I strategy
(BUSINESS) Diversity and inclusion have been at the forefront of Starbucks’ mission, but now they’re shifting strategy. What can we learn from it?
Starbucks was one of many companies that promised to focus on diversity and inclusion efforts after the death of George Floyd by Minneapolis police in 2020. What sets Starbucks apart from other companies were its specific goals.
How It Started
They began with hiring targets and have now added goals in corporate and manufacturing roles. Starbucks’ plans and goals revolve around transparency for accountability. They released the annual numbers for 2021 as a way to help hold themselves accountable. The data they’ve released so far show that they’ve met nearly a third of their 2025 goals according to Retail Brew. Because of this information, we can see why they are choosing to move in the direction of manufacturing and corporate jobs. In 2021, POC’s fell to 12.5% of director-level employees from 14.3% in 2020 in manufacturing.
How It’s Going
Per Starbucks’ website stories and news, “[I]t will increase its annual spend with diverse suppliers to $1.5 billion by 2030. As part of this commitment, Starbucks will partner with other organizations to develop and grow supplier diversity excellence globally.” To put that into perspective, they spent nearly $800 million with diverse suppliers in 2021. With these moves, by 2030, it will increase by almost double.
As part of their accountability and progress, they plan to partner up with Arizona State University to give out free toolkits to entrepreneurs on fundamentals for running successful diverse-owned businesses. Another goal they’ve listed is to boost paid media representation by allocating 15 percent of the advertising budget to minority-owned and targeted media companies to reach diverse audiences.
At the heart of all this information on their goals and future plans, data transparency and accountability are what’s forcing them to look at the numbers to make specific goals. They are doing more than just throwing money at the problem, they are analyzing how they can do better and where the money will make a difference. Something that, as entrepreneurs, we should all do.
Peloton is back-pedaling: Reports of price increases, layoffs, and cost cuts
(BUSINESS) After a recording of layoffs leaks, ‘supply chain’ issues cause shipping increases, and they consult for cost-cutting, Peloton is doomed.
Is Peloton in Trouble?
According to many reports, Peloton had success early in the pandemic when gyms shut down. Offering consumers a way to connect with a community for fitness along with varying financing options allowed the company to see growth when many other industries were being shuttered.
After two years, CNBC reports that the company is “being impacted by …supply chain challenges” and rising inflation costs. According to the report, customers will be paying an additional $250 for its bike and $350 for its tread for delivery and setup.
As demand has decreased, Peloton is also considering layoffs in their sales and marketing departments, overheard in a leaked audio call. The recording details executives discussing “Project Fuel” where they plan to cut 41% of the sales and marketing teams, as well as letting go of eCommerce employees and frontline workers at 15 retail stores.
Nasdaq reported that the stock fell 75% last year, after a year where it soared over 400%.
Peloton reviewing its overall structure
According to another report from CNBC, Peloton is working with McKinsey & Company, a management consulting firm, to lower costs as revenue has dropped and the growth of new subscriptions has slowed since the pandemic. Last November, according to NPR, Peloton had “its worst day as a publicly-traded company.” It also anticipates greater losses in 2022 than originally predicted. It makes sense that the company would reexamine their strategy as the economy changes. They aren’t the only one that is raising prices amid supply chain issues.
It will be interesting to watch how Peloton fares
Peloton has a large community that pays a monthly fee for connected fitness. While growth has slowed, the company still has a strong share of consumers. Although it is facing more competition in the home fitness market and more gyms are reopening, as Peloton adjusts to the new normal, it should remain a viable company.
CEO is offering folks thousands to *quit* their jobs, with one catch
(BUSINESS) A CEO out of Arizona is challenging employment norms by offering a sort of “sign-off” bonus upfront, but this method has one fatal flaw.
Chris Ronzio, the CEO of Trainual, a software company in Arizona that aims to systemize and scale your small business, is offering cold hard cash to quit your job in an unconventional ploy to bypass the effects of the Great Resignation.
Before you rush to turn in your notice and make some extra cash, you should know that this offer is dependent on being selected as a hirable candidate and making it through the hiring process for Trainual. This option is also offered to new hires after 2 weeks of employment.
This model of employment gives the employee the ability to fire the company and walk away with a little sum of money. The thought process of the CEO was outlined in an article by the Insider, saying it is a strategic move to retain top talent and maintain a strong company culture. While this is a unique approach…it has a glaring flaw. The offer is only good for the initial two-week period. However, it can take some time to recognize the shortcomings of any company when you begin employment. We can all recognize the long-term financial potential of reoccurring income and while $5,000 is not anything to shake your finger at, it will eventually be gone. I think we can all agree that constructive criticism can be difficult to swallow at times, however, if Trainual was truly invested in this model they would extend the offer at other key times during employment. What if this offer was again available at the 1-year mark? If the offer reappeared at a one-year review, the turnover may increase.
Per the Insider article, Ronzio was quoted as saying, “With today’s market, hiring teams have to move quickly to assess candidates and get them through the process to a competitive offer, so it’s impossible to be right 100% of the time,” Ronzio said. The CEO added, “The offer to quit allows the dust to settle from a speedy process and let the new team member throw a red flag if they’re feeling anything but excited.”
These statements detail another dimension to consider which is the employment hiring process and timeline. If top candidates are in such high demand that the process has to be sped up to secure a workforce, this monetary compensation can help to ensure the hiring decision. Although, when the offer was implemented in May of 2020, the offer was $2500, half of what it is now. Ronzio reasoned that they could stay while they looked for another job so they increased the amount to compensate for those with a higher salary range.
Let me preface this by saying that yes, accountability should exist, but I would be interested to know the turnover rate for the hiring team. The cost to the company from this unique approach adds extra weight for those making the decisions on who to hire. The stress the hiring team faces has to be factored into the candidate decisions. How many times can the hiring team get it wrong before they’re let go? While the pressure to hire the right candidate should always factor in, one has to wonder about the effects of this model.
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