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Why the relationship between the GOP and big business is getting complicated

Long the party of big business, Republicans are increasingly finding themselves at odds with major companies

Cardboard cutouts of fans in the otherwise empty seats face the field during the sixth inning of a baseball game between the Atlanta Braves and Tampa Bay Rays in Atlanta, July 30, 2020. Georgia’s new voting law — which critics claim severely limits access to the ballot box, especially for people of color — led to Major League Baseball pulling the 2021 All-Star Game out of Atlanta.
John Amis, Associated Press

Is the Republican Party breaking up with big business?

The two have had a long and mutually beneficial relationship, but earlier this week, Senate Minority Leader Mitch McConnell accused some in corporate America of being “a woke parallel government” that takes its cues “from the Outrage-Industrial Complex.”

“My warning, if you will, to corporate America is to stay out of politics,” McConnell said at a press conference Tuesday. “It’s not what you’re designed for” (donating money, however, is still OK: “I’m not talking about your political contributions,” McConnell added).

Other Republicans have made similar statements following Major League Baseball’s decision to move its All-Star Game out of Atlanta because of voting restrictions recently passed by Georgia’s GOP-controlled legislature and signed by Republican Gov. Brian Kemp. Coca-Cola and Delta Air Lines, both based in Atlanta, also came out publicly against the law.

It signals an ongoing political realignment of Republicans unafraid to call out businesses, and businesses unafraid to anger Republicans by speaking out and supporting social causes.

The Republican-business community relationship dates back to post-World War II when moderate Republicans aligned with business interests, but that alliance has been fraying for decades as the party has moved further right, said Mark Mizruchi, a University of Michigan professor and author of “The Fracturing of the American Corporate Elite.”

“There’s been a trend in this direction for probably 30 years,” Mizruchi said. “It’s coming out in a new way now.”

Republicans have broken with big business before, including during the Reagan administration over tax increases, Mizruchi said. More recently, though, it’s cultural issues that are causing the strain.

Sen. Marco Rubio, R-Fla., came out in support of a unionization effort at an Amazon facility in Alabama last month, not because he’s particularly supportive of unions, but because he said the digital giant is waging a culture war “against working-class values.” Former U.S. ambassador to the United Nations Nikki Haley tweeted Tuesday that “Big corporations are the new liberal mob.”

“These corporations, many times, they’ve decided they’re going to try to impose the will of their personal preferences onto the American people and pass it off as being somehow their corporate interests,” said Richard Manning, president of Americans for Limited Government, a member of the Stop Corporate Tyranny coalition seeking “to get corporate America back to neutral.”

Companies have grown more willing to speak out on social issues in recent years, as shown by the fight over same-sex marriage. In the ‘00s and early ‘10s, companies including Home Depot, Ford and McDonald’s found themselves targeted by boycotts from the American Family Association for their support of the LGBTQ community. By 2013, though, 48 companies including Nike and Xerox signed onto an amicus brief opposing the Defense of Marriage Act. By the time the Supreme Court ruled in favor of same-sex marriage two years later, corporate support for same-sex marriage was the norm.

Republicans have felt the blowback from being on the wrong side of the business community before. In 2015, when then-Indiana Gov. Mike Pence signed a controversial state Religious Freedom Restoration Act, Salesforce and Angie’s List protested by announcing they were scaling business back in the state. A 2016 transgender “bathroom bill” was estimated to cost North Carolina more than $3.76 billion in lost business over 12 years, according to the Associated Press, though a 2019 settlement allowed transgender people to use whatever bathroom bathroom matches their gender identity.

It’s not too difficult for companies to speak out on issues that have widespread public support, as same-sex marriage did by the mid-’10s, or even Black Lives Matter last summer (67% of Americans supported the movement in June 2020, per a Pew Research Center poll). Speaking out against Georgia’s voting bill, however, is trickier, since it places businesses directly in the middle of a partisan fight.

The Georgia bill cuts down on the time voters can request absentee ballots, limits the number of drop boxes in the state’s most populous counties and bars people from handing out food or water to voters waiting in line, among other restrictions. The corporate revolt was instigated in large part by Black executives who pushed companies to respond to legislation they said would harm Black voters.

Activists in other states are putting pressure on business to come out against voting restrictions where they live. In Arizona, more than 30 community groups sent letters to companies that have been top donors to the state lawmakers behind the voter restrictions there, but have also stated their support for civic engagement.

“The path to progressive change doesn’t run through the Fortune 500,” said Emily Kirkland, executive director of Progress Arizona. Still, she said, “we know that state legislators and elected officials take the concerns of the business community seriously.”

When businesses take a political stand, it can act as a signal of where mainstream political consensus is heading, and some consumers appreciate it. A report released in January by the public relations firm Edelman found 80% of respondents want CEOs to speak out on social issues.

Rather than a complete breakup between Republicans and business, their relationship today is complicated. They’ll continue to find common ground in some areas, but corporations will also find space to partner with Democrats.

On Tuesday, Amazon CEO Jeff Bezos signaled he’s open to President Joe Biden’s infrastructure bill as well as raising the corporate tax rate. Republicans are less reliant on money from big business today because of how much they receive from individual donors, one executive at a major business trade group said, and it’s shaping the party’s agenda.

“We’re going to keep seeing this, and I think Republican Party leaders are going to continue being infuriated with the business community’s responses as long as their agendas part ways on some really big issues,” the executive said.