The furor has died down. A national boycott has been called off. Wilco will play a concert in Indiana after all.
But long-term economic impact of the controversial Religious Freedom Restoration Act — which incited scorn from CEOs and celebrities across the country — could be impossible to ever fully quantify, an economist said.
Some of numbers can be tallied. If GenCon had gone through with its threat to cancel the largest tabletop gaming convention in North America, it would have cost the Indianapolis metro area a $50 million economic boost, said Jerry Conover, director of the Indiana Business Research Center. If Angie's List does not go forward with a big expansion, the city will lose an estimated $60 million to $70 million in annual salaries.
But the thing is, companies rarely point to a specific state law as a reason for backing off on a project the way they did over the past week, said Morton Marcus, a retired Indiana University professor of economics and former director of the Indiana Business Research Center. They almost never say why they didn't invest in a state in the first place. Aspiring entrepreneurs generally don't tell anyone publicly why they didn't chase opportunity in a particular state. Recent college grads don't talk about why they took their talents somewhere else.
"I don't think it's measurable," Marcus said. "The state's reputation is already so low in the nation, and this supports existing negative stereotypes. Indiana has been a joke on national television for generations. Red Skelton came from Indiana. Woody from 'Cheers' came from Indiana. Indiana does not have a reputation for being sophisticated. It has a reputation for being backwards, and all this does is reinforce that."
Civic leaders have worked for decades to improve the state's image as a forward-looking place to do business, but the national backlash over the last week was a major setback, Marcus said.
Chicago Mayor Rahm Emanuel already pounced, capitalizing on the crisis by sending a letter to more than a dozen Northwest Indiana CEOs and business owners saying that Chicago has a diverse workforce while Indiana was moving backwards to the 1960s. Crain's Chicago Business urged Illinois Gov. Bruce Rauner in an editorial Friday to launch his own cross-border raid for Hoosier companies that might want a more welcoming place for employees and customers.
Two Illinois companies — T&B Tube and Hickman, Williams & Co. — announced this week they planned to move or locate new steel manufacturing operations in Northwest Indiana. But the state's per capita income will continue to stagnate at 38th place nationally if it only adds more manufacturing jobs, Indiana Business Research Center Director of Economic Analysis Timothy Slaper said.
More highly educated members of the creative class, such as marketers and scientists, are needed because they command higher salaries, and they are who will be alienated by a stigma that Indiana isn't a welcoming place, he said.
The public relations debacle over the law reinforces the state's longstanding reputation for backwardness at a time when it's not known for much else nationally, Marcus said.
"Notre Dame was famous for football in the past," he said. "Indiana University was famous for basketball in the past. Purdue was famous for some astronauts, but the state isn't nationally prominent for anything right now. It's looked at as corn belt, as rust belt."