Recent work by the economist and historian Gavin Wright has documented the substantial, albeit unequal, gains that accrued to Southerners and the businesses that served them, due to the fall of the Jim Crow system. The numbers are striking: “[S]outhern retail business lagged the nation throughout the years of sit-ins and mass boycotts.” But after the businesses desegregated, Wright found, Dallas department stores saw sales increase by over 80 percent just seven years later (from desegregation in 1961 to 1968), while during the same time span a decade before, sales had been flat or slow in growth. The same thing happened in Little Rock department stores, where sales more than doubled in the decade after desegregation in 1962 and Atlanta department stores in the decade after they desegregated in 1961. Birmingham, Ala., department stores saw sales increase by over 75 percent in the decade after they desegregated in 1963, while the previous decade had seen tumultuous and declining sales figures.
While executives then did not have all the data available to us today, the contemporary reasoning of at least some suggested they understood that equality can be profitable as well as the obverse: that racism is not only wrong but can be costly, too. Thus, when national business leaders balked at opening plants and branches in Jim Crow cities, some Southern bankers and business executives took note. The vice president of one Atlanta bank told a Wall Street Journal reporter in 1961: “There is no way of measuring how many plants we’ve lost or how many we will lose because of racial conditions, but we know the number has been substantial.” Today’s business leaders in states who sit silent while voters are openly discriminated against would do well to recall those harms.
The failure to speak out brings another cost: mounting public anger and action. Just as outrage over voter suppression is being heard today, consumers and activists urged businesses to act during the civil rights era. Black Americans famously organized boycotts of segregated streetcars and buses as well as businesses that wouldn’t hire and promote Black workers, culminating in the Montgomery, Ala., bus boycott, led by the Rev. Martin Luther King Jr. Activists applied pressure to businesses from Greensboro, N.C., to Greenwood, Miss., and organized national picketing and boycotts of chains such as Woolworth’s, which pushed many in the business community to finally act.
Just as it does today, that brought results. In Greensboro, the manager of the boycotted Woolworth’s called the mayor to plead for action. In New Orleans, major bankers stepped in to demand political action on civil rights as their economy saw the impact of the boycotts. It is better to act early against injustice before things get out of hand. It was the Birmingham Chamber of Commerce that founded a civic group to “go on record against mob violence by white supremacists and arch-segregationists,” rather than the Birmingham mayor or city council. The same Chamber of Commerce organized a political campaign to unseat reactionary segregationists like Bull Connor. While it was the activists who ultimately desegregated Birmingham, King himself noted that “the political power structure listens to the economic power structure.”
Business listens to its constituents as well. Contemporary data indicates that in the high-growth areas that will supply major businesses with customers, workers and investors, many ordinary Americans may demand more from firms. Google is one of the companies that has spoken out and is planning on investing “more than $10 billion” in expanding its operations across the country. Can there be any doubt that they will take the voter suppression landscape into consideration?
With the contemporaneous lessons we’ve learned from Georgia and those of the Jim Crow era, companies need to act before the damage is done. Whatever other controversies may divide the public and business alike, the evidence indicates that the preservation of basic voting rights enjoy widespread support. It makes both moral and pragmatic sense for American companies to champion American democracy.
Not all business leaders took a stand against discrimination during the civil rights era, but the more forward-thinking ones did. They saw the future, and saw it accurately, and were moved by both moral considerations and self-interest. On Tuesday, the States United Democracy Center (where we both serve on the board) released a bipartisan letter from dozens of state officials urging businesses to do more. For current executives contemplating action, the example of the past is well worth studying — and emulating.