Tennessee's Drag Ban is Bad for Business

Business leaders on the local, state and national level say that anti-LGBTQ legislation like Tennessee’s ban on drag and gender-affirming care are not only an attack on the LGBTQ+ community, but are bad for business.

Tennessee's Drag Ban is Bad for Business

(This article was first published on Forbes.com)

Tennessee Gov. Bill Lee signed into law on March 2nd a first-of-its-kind bill that criminalizes drag performances in the state. The legislation bans “adult cabaret performance” on public property or in the company of minors, and extends the definition of such entertainment to include “male or female impersonators,” aka drag performers, along with “topless dancers, go-go dancers, exotic dancers, [and] strippers.”

The bill was amended so that the law would go into effect as soon as April 1, before Pride Month in June, and comes with hefty penalties for violators. First-time offenders will be charged with a misdemeanor and subsequent offenses will be classified as felonies that carry up to six years in prison.

Senate Majority Leader Jack Johnson, one of the bill’s lead sponsors, celebrated the signing on Twitter, saying “This bill gives confidence to parents that they can take their kids to a public or private show and will not be blindsided by a sexualized performance.”

Lee signed the anti-drag bill in tandem with another bill that constitutes a total ban on gender-affirming care for transgender children in Tennessee. Tennessee's anti-trans healthcare ban follows similar efforts in Utah, Mississippi and South Dakota, but the drag ban is a first.

Business leaders on the local, state and national level say that anti-LGBTQ legislation like Tennessee’s ban on drag and gender-affirming care are not only an attack on the LGBTQ+ community, but are bad for business.

“LGBTQ+ Tennesseans are entitled to the same rights and protections as their fellow citizens, including the right to do business in their home state,” National LGBT Chamber of Commerce cofounder and president Justin Nelson said in a statement via email. “Legislators are sending a message that Tennessee is not open for business when it comes to LGBTQ+ entrepreneurs, who contribute over $1.7 trillion to the U.S. economy.”

Companies across the country have expressed that anti-LGBTQ+ state policies have a negative effect on their businesses.

Almost 300 major U.S. corporations signed a Human Rights Campaign statement opposing anti-LGBTQ state legislation, indicating difficulty recruiting candidates and making growth investments in states that pursue such laws.

On a local level, some cities in red states with reputations for LGBTQ+ inclusivity find it difficult to attract business because of statewide anti-LGBTQ+ legislation.

For example, Nick Pfeiffer, Vice President of Public Affairs for tourism organization, Think Iowa City, told ABC affiliate KCRG that, “The last two years, our sales staff has attempted to meet with different conferences meeting planners, and they’ve been told ‘no, we don’t want to meet with you simply because you’re from Iowa’.”

Although Iowa City was recognized as “ahead of the curve for the LGBTQ community” by GayTravel.com, Pfeiffer said that “These [anti-LGBTQ] bills make people less likely to come here.”

But just as anti-LGBTQ+ legislation has a negative economic impact, LGBTQ-friendly policies have proven to boost both small and large businesses.

Brian Rosman, president of the Tennessee Pride Chamber, emphasized the positive economic impact that LGBTQ+ policies have on state economies. “States [that] are welcoming to LGBTQ+ people help businesses and corporations attract and retain talent, attract more customers, attract more tourism, and help to generate business for the entire community,” he said via email.

There is data confirming the positive impact that LGBTQ-friendly policy has on corporate bottom lines. A 2022 study found that LGBT-friendly corporations have higher profitability and higher stock market valuations than less progressive companies. They also experience increased employee commitment, job satisfaction, and productivity.

But Rosman warns that the new Tennessee anti-drag law could have an adverse economic impact for all Tennesseans.

“Tourism, which contributes significantly to our state’s growth and well-being, may well suffer from boycotts disproportionately affecting members of our community who work in Tennessee’s restaurants, arts, and hospitality industries,” he said. “Corporations will not continue to expand or relocate here if their employees—and their recruits—don’t feel safe or welcomed in Tennessee.”