Moving from legal to economic equality for LGBT people

June 8, 2017

M. V. Lee Badgett is a professor of economics and the former director of the School of Public Policy at the University of Massachusetts Amherst. She is also a Williams Distinguished Scholar at UCLA’s Williams Institute. Her current research focuses on poverty in the LGBT community, employment discrimination against LGBT people, and the cost of homophobia and transphobia in global economies. Her latest book is The Public Professor:  How to Use Your Research to Change the World. Her book, When Gay People Get Married: What Happens When Societies Legalize Same-Sex Marriage, analyzes the positive U.S. and European experiences with marriage equality for gay couples. Her first book, Money, Myths, and Change: The Economic Lives of Lesbians and Gay Men, presented her groundbreaking work debunking the myth of gay affluence. Prof. Badgett’s work includes testifying as an expert witness in legislative matters and litigation (including as an expert witness in California’s Prop 8 case), consulting with development agencies (World Bank, UNDP, USAID), analyzing public policies, consulting with regulatory bodies, briefing policymakers, writing op-ed pieces, speaking with journalists, and advising businesses.  She is also the Board Co-Chair of the non-profit Wellspring Cooperative Corporation in Springfield, MA, a network of community-based, worker-owned companies.

June is traditionally LGBT pride month, and Massachusetts has a lot to be proud of. In 1989, we became the second state to ban discrimination based on sexual orientation (gender identity took longer). In 2004 we became the very first state to have marriage equality for same-sex couples. In spite of these victories for legal equality here and elsewhere, though, LGBT people continue to face wage gaps and other forms of economic inequality.

Employment discrimination still happens and is disturbingly common in the United States. In a 2013 national survey, 21% of LGBT people reported experiences of unfair treatment by an employer. Studies that send identically-qualified LGBT and non-LGBT people’s applications for jobs find that LGBT applicants have to apply for many more jobs just to get an interview.

These kinds of discrimination are likely contributors to the gay wage gap. A recent review of studies found that gay and bisexual men earned 11% less than heterosexual men with the same age, education, and other qualifications. 

Perhaps surprisingly, lesbian and bisexual women earn about 9% more than similar heterosexual women. A lesbian wage advantage?  Not exactly--it’s more like a slightly smaller gender wage gap, since lesbian, bisexual, and heterosexual women all earn less than straight or gay men.

Lesbians do some things differently from heterosexual women, which might reduce the gender disadvantage. Mainly we see higher earnings for lesbians who were never married to men. Lesbians who were married to men at some point have earnings more like heterosexual women’s, maybe because they made similar kinds of childrearing or labor market decisions while living with a male spouse. 

Lesbians also work more hours and weeks, so they might be accumulating more experience over time, which helps to raise wages. And lesbians appear to be less deterred by male dominance in an occupation, holding jobs that have more men in them than heterosexual women do.

The gender wage gap bites into lesbians’ economic resources, though. Lesbian couples have two women’s incomes, and studies show they have less income to live on than a male-female couple or a gay male couple. That’s one big reason why lesbian couples have higher poverty rates than different-sex couples and gay male couples. The poverty gaps are even larger for African American same-sex couples and for transgender people.

Interestingly, we’re learning that gay men are also affected by gender inequality. For example, one study shows that anti-gay discrimination is particularly pronounced in jobs looking for applicants with stereotypical male characteristics, like assertiveness, aggressiveness, or ambition.

So how can we move LGBT people closer to actual equality in economic outcomes?

Businesses have been allies in promoting policies and practices to reduce discrimination and to make workplaces more welcoming of LGBT employees. Some examples include putting sexual orientation and gender identity in the company nondiscrimination policy, discussing LGBT issues in diversity training, supporting LGBT employee groups, and developing clear gender transition guidelines.

Employers make a business case for LGBT equality—they need to recruit and retain the best employees, including LGBT people and non-LGBT people who want to work at companies that value diversity. Research backs up the business case claims, showing that companies with LGBT-supportive policies have higher stock prices, productivity, and profits.

Strengthening the scope and enforcement of nondiscrimination policies would help, too. The U.S. Equal Employment Opportunity Commission considers discrimination based on sexual orientation and gender identity to be a form of sex discrimination, so LGBT people can file employment discrimination charges everywhere in the U.S. But it would also be transformative to have a comprehensive federal law like the proposed Equality Act, which would ban discrimination not only in employment, but also in credit, housing, public services, and other areas.

Some other policies would help lift LGBT people out of poverty, in particular. Raising the minimum wage to $15 an hour would cut gay men’s poverty by a third and cuts lesbians’ poverty in half. Finding a way to eliminate the gender wage gap would erase the gap in poverty for lesbian couples, and cutting racial wage gaps would reduce the poverty gap for African American and Hispanic people in same-sex couples. Plus those policies have the advantage of helping everyone, regardless of sexual orientation or gender identity.

Finally, we need more data and research on LGBT people to better understand what’s making LGBT people economically insecure. Massachusetts and other states should join California in moving toward more inclusive data collection on sexual orientation and gender identity within state agencies, including health and human services, education, and employment.  

While we have reasons to be proud of LGBT people’s victories in the push for legal equality, we will all be prouder when we’ve also achieved economic equality.