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PayPal Cancels on North Carolina After Anti-LGBTQ Bill

GettyImages 499436000
GettyImages 499436000

Online payment company PayPal has officially abandoned plans to build a branch in Charlotte, North Carolina following the state’s passing of a controversial anti-LGBTQ law last week.

The decision will remove an estimated 400 jobs from the state – the most direct hit to their economy as a result of the legislation thus far.

North Carolina’s House Bill 2 essentially legalizes discrimination based on sexual orientation and/or gender identity and bars students and government officials from using the restroom that corresponds to their gender identity.

PayPal’s perspective

PayPal CEO Dan Schulman explained his decision in a statement posted on the company’s website, alleging that the new law “perpetuates discrimination and violates the values and principles that are at the core of PayPal’s mission and culture.”

“As a company that is committed to the principle that everyone deserves to live without fear of discrimination simply for being who they are, becoming an employer in North Carolina, where members of our team will not have equal rights under the law, is simply untenable,” wrote Schulman.

While PayPal is the first company to formally cancel business plans in North Carolina, they are far from the only one to disparage the states’ actions.

Chief executives from A+E Networks, the NBA, Facebook, 21st Century Fox, Apple, Google, American Airlines, Lowe’s and more have all voiced their disapproval, suggesting an even larger potential for furthered economic backlash against the state.

North Carolina’s economic loss

America’s reaction to the bill is in stark contrast to N.C. Gov. Pat McCrory’s initial intent for the state.

The Republican politician ran for office specifically to create jobs, according to his website. He then went on to sign HB2 – a strong departure from his initial mission – even going as far as publicly defending the bill via YouTube after backlash surfaced last week, claiming it “protects men, women and children when they use a public shower or locker room.”

Unfortunately for McCrory and North Carolina, the state is missing out on a reported $3.6 million in revenue for Mecklenburg County as a result of PayPal’s cancellation – an impressive figure that McCrory proudly reported last month when announcing PayPal’s then-imminent arrival in North Carolina.

“North Carolina is the ideal destination for innovation-based, worldwide companies like PayPal,” said McCrory as quoted by the Washington Post. “Today’s announcement means that we can add another prominent name to the state’s growing list of technology businesses with major operations here.”

The deal would have been good for PayPal as well, with McCrory’s office mentioning a state grant that would have made the company “eligible for $2.7 million in reimbursements over the next 12 years.”

Our take

PayPal’s refusal to accept the state’s discriminatory laws shows that there can be harmful fiscal consequences to bigotry and serves as an important reminder of the inextricable link between social and economic issues.

Lawmakers often try to separate economic expansion and job creation from issues relating to social equality. But denying the link between the two is to deny the role of systemic social biases in shaping the economic inequities that affect the LGBTQ community, women and people of color to this day.

We can only hope that the economic weight of PayPal’s decision will be enough to turn North Carolina lawmakers the way of equality and social inclusion.

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Header image: Alex Wong / Getty

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