Rational businesses see the law for what it really is. The law is not about increasing freedom, but limiting protections to a share of customers. Most rational and reasonably enlightened businesses believe it is a fundamental right of consumers to buy their products and services so long as those customers are willing and able to do so (the demand curve). Preventing such customers from doing so is an infringement on those customers’ freedom.
That limitation of protection for consumer freedom has business consequences. A share of customers will look elsewhere translating into lower revenue and profits than would otherwise be the case. In other words, the demand curve would shift to the left and, holding supply constant, prices would be lower, revenue would be lower, and profits lower.
The pool of talent could also shrink as some prospective employees (whose consumer protections have been diminished) go elsewhere and some would-be business partners seek not to get involved with firms in a state that offers fewer protections. In turn, the reduction in the talent pool could have long-term adverse consequences as it relates to innovation, improvement, and productivity, all of which impact a company’s competitiveness and profitability.
Not surprisingly, the negative publicity has led to Indiana’s Governor’s seeking some changes. Even when the changes are made, there will likely be some residual fallout from what happened. The bad publicity and related consequences were fully avoidable had the State fully thought through what it was seeking to do.