Commentary

Preemption bill reduces freedom, hurts the economy

Now that we’ve had a few hours to digest the General Assembly’s newly proposed preemption bill, it looks even worse than we originally thought, representing a full-frontal assault on anti-discrimination protections in North Carolina. Not only does the bill ban local governments from prohibiting discrimination by private businesses, it sharply reduces their ability to raise wages and—shockingly—eliminates the rights of workers to sue their employer if they’re fired for a discriminatory reason.

The bill takes crucial freedoms away from our local communities and will almost certainly damage the state’s economy.

Under the North Carolina Constitution, the legislature has the authority to determine what local governments can and cannot do. For decades our municipal and county governments have possessed the freedom to regulate private businesses in a limited way, including prohibiting discrimination and boosting the wages of the employees of public contractors. The City of Charlotte recently used this authority to pass an important ordinance preventing public and private discrimination on the basis of sexual orientation and gender identity.

Yet draft legislation unveiled this morning without any public input takes these freedoms away from our local communities. If it becomes law, the bill would:

  • Ban local governments from prohibiting businesses from engaging in any type of discrimination. The draft would effectively overturn Charlotte’s new ordinance, permit private businesses to discriminate against gays, lesbians, and transgendered residents, and prevent local communities from regulating other types of discrimination by private businesses.
  • Eliminate state law remedies for employees who are fired based on their race, religion, color, national origin, age, sex or handicap. If it becomes law, North Carolina will join Mississippi as the only state without any state law protecting private sector employees from workplace discrimination on the basis of race, gender, age or disability. The bill eliminates an employee’s private right of action to sue an employer who fires him or her for a discriminatory reason.
  • Enact sweeping new restrictions on the ability of governments to protect workers and raise wages. Public contracts with private businesses have been an important tool used by local governments to raise wages and ensure basic job standards in their community. In an unprecedented overreach, the bill prohibits local governments from considering wages, benefits, and basic job safety standards when awarding public contracts—in effect telling local governments what they can and can’t do with their own money.

While the bill is clearly bad for the freedom of local communities, it’s also likely to damage the state’s economy. Historically, allowing businesses to discriminate against customers they don’t like has never created jobs or generated widely shared prosperity. In fact, the end of legal racial discrimination in the 1960s has long been recognized as a crucial step forward in boosting the state’s economy. That’s because shutting people out of the economy keeps quality labor, capital, and consumer spending on the sidelines, instead of helping boost local spending and economic growth. And certainly, many corporate leaders have refused to move their companies to states like Indiana and Georgia that recently attempted to enshrine discrimination in law. Given the historical record, it’s clear that letting businesses discriminate against gays and lesbians will only hurt North Carolina’s economy.

Beyond the economic problems associated with discrimination, the wage provisions of the legislation are also likely to hurt North Carolina’s economy. Weakening the ability of local governments to raise wages will only serve to dampen economic growth by making it harder to create the kinds of jobs that pay decent wages and boost local business sales. Given that the General Assembly is also refusing to raise the state minimum wage, banning local governments from raising the wage in their own communities only makes it harder for the state to create jobs that pay workers enough to afford the basics.

The bill is bad news for North Carolina—it takes crucial freedoms away from our local communities and will almost certainly damage the state’s economy.

One Comment


  1. Raymond Marostica

    March 23, 2016 at 9:09 pm

    This is typical of a Right To Work state. Employers don’t understand that the employee is a part of their company and are the ones who turn out the product that make the company profitable. The company can not exist without the employee. In order to improve the economy this country needs to stop exporting jobs to countries that allow slave labor to produce their goods and then send those good back to this country where our citizens who are displaced can’t afford to buy those goods. Get rid of TAFTA, pay our workers a fair living wage and raise the economy in the State.

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