When money talks, bigotry walks

Check out those homophobes in Arizona! They’re like white racists in the Jim Crow South!

So declared a chorus of my fellow liberals last month, after Arizona Gov. Jan Brewer vetoed a bill to protect businesses who turned away clients on the basis of owners’ “sincerely held” religious beliefs. Although the law did not mention homosexuals, it clearly aimed to defend enterprises that refused to serve gays. Its rationale seemed to echo racial segregationists from the pre-1960s South: If I run a business, I get to determine who can patronize it.

But the segregationist case was always more about cold hard cash than it was about racial prejudice and the rights of Southern whites to practice it. Despite their nods to “freedom of association” and the like, Southern businesses sought to maintain segregation because they thought it would be good for business. And when they realized they were wrong, they backed off.

That history contains important lessons for the gay-rights movement today. Discrimination doesn’t just hurt its victims’ feelings or dignity; it also injures the bottom line, for all of us. So the most effective challenges to discrimination often target our wallets and pocketbooks, not just our hearts and minds.

Before the 1960s, most white Southern merchants assumed that race-mixing would cut into profit-making. Following the now-famous 1960 sit-ins in Greensboro, North Carolina, for example, a committee of local businessmen warned that they would lose white customers if they served black ones in the same place.

“We are being singled out as tyrants who are being unfair to Negroes, when our duty and that of all business firms is to do the best job they can for the majority, and whites comprise the majority of our trade,” one Southern business manager complained in May 1960, as the sit-in movement spread from Greensboro to other Southern cities. “Is it democratic for a minority to rule a majority?”

Likewise, national chain-store companies argued that good business practices required them to defer to “Southern”—that is, white—sentiments. “Our company has always considered itself a guest in any community in which it is located,” explained an executive from Woolworth, target of the first sit-in campaign in Greensboro. “As such, we endeavor to be good neighbors and to abide by local customs established by local people for the conduct of business in their towns.”

Over the next few months, however, whites discovered that the sit-ins hurt their businesses more than integration ever could. At the now-famous Greensboro Woolworth, where only 5 percent of trade came from blacks, overall sales in 1960 fell by 20 percent and profits by 50 percent. Elsewhere, too, “customers of both races” were abandoning downtown stores—and the loud protests surrounding them—for newly sprouted “suburban shopping centers,” the New York Times reported.

Within a year of the first sit-ins, as historian Gavin Wright has shown, businesses in more than 100 Southern towns and cities had agreed to drop racial barriers at lunch counters. Department store sales shot up in the places that desegregated, like Dallas and Atlanta. But sales sagged in Birmingham, where the stores still segregated their counters.

To be sure, many other businesses across the South—especially hotels and restaurants—continued to bar blacks or limit them to “Negro-only” sections. But the sit-in movement sounded the death knell for segregation in public accommodations, which would be outlawed as part of the 1964 Civil Rights Act.

The measure was backed by several prominent national chains, including Woolworth, which had seen first-hand how much damage discrimination could do. “Woolworth will now be able to serve all of its customers in all its stores on a desegregated basis,” one official from the company exulted after the law passed.

We heard a similar sigh of relief from businessmen last week in Arizona, where opponents of the anti-gay bill included J.P. Morgan, American Express and Marriott. Had Governor Brewer signed the bill, they argued, Arizona might have lost the 2015 Super Bowl and its expected half billion dollars of revenue. The measure would also have made it harder to attract talented workers, business leaders said.

Democrats were quick to pounce on Arizona’s GOP governor, whose veto message highlighted the potential damage to her state’s economy. “Jan Brewer’s veto of this bill was not exactly profiles in courage,” said Rep. Debbie Wasserman Schultz, chairwoman of the Democratic National Committee. “She specifically referred to her concern being economic.”

So what? The same concern swayed the white South against segregation, a half-century ago. With nearly a dozen states considering discriminatory measures like Arizona’s, we should celebrate—not denigrate—the economic argument against them. When money talks, bigotry walks.