Despite advances in legal and social recognition, LGBTQ Americans continue to suffer from economic discrimination which drives a wealth gap between them and het/cis peers.
Employment & Earnings Gaps
Although gay and bisexual men are more likely than their straight peers to have a college education, they still earn less on average and are more likely to report financial hardship in the past year.
HRC reports that around 46% of LGBTQ workers remain closeted at work today, relatively unchanged from the HRC’s first climate report in 2008.
Unemployment & Under-Employment
In 2018, Harvard’s T.H. Chan School of Public Health reported that LGBTQ Workers are 2x as likely to be unemployed as het/cis workers. Prudential, likewise reported in 2018 that one-in-four (25%) LGBTQ millennials reported experiencing unemployment or long-term leave from work, nearly double the rate in the general population (13%).
LGBTQ workers experience un(der)employment in part because of discrimination at the hands of hiring managers. 12% of LGBTQ individuals report having passed over for a job because of their sexual orientation or gender identity. Trans* individuals, as highly visible members of the LGBTQ community, suffer even steeper burdens: around 13-47% of transgender workers report being unfairly denied a job because of their gender-identity.
Harassment & Hostile Workplaces
Hostile workplaces created by harassing supervisors and peers also leads to higher attrition for LGBTQ workers. One in ten LGBTQ workers in 2018 (13%) feared they might be fired because their workplace was hostile toward LGBTQ workers.
HRC reported in 2018 that one in five LGBTQ workers (as compared to one in twenty-four non-LGBTQ workers) had been told to “dress more feminine or masculine” at work. But many LGBTQ workers continue to suffer silently without redress: respondents to the HRC indicated they did not think “anything would be done” to address their concerns if they voiced them and they feared “hurt[ing] relationships with coworkers” by attempting to vindicate their right to be free from harassment.
Invidious harassment contributes to higher turnover for LGBTQ workers. HRC reports that one in ten LGBTQ workers had left a job because the environment was hostile to LGBTQ people. The Wall Street LGBTQ nonprofit Out on the Street reports individuals who are closeted at work are about 3x as likely to leave their companies within three years.
The Income Gap
Current studies from academic and financial firm studies generally agree that LGBTQ workers earn less, on average than heterosexual peers. In 2013, the Willliam’s Institute found that nation-wide around one in five (~20%) LGBTQ people living alone reported incomes at-or-below the poverty level. Trans workers report even greater earning gaps and impoverishment. Nearly one-in-three (29%) of transgender Americans report living in poverty, more than 2x the rate of poverty reported in the general population (12%).
Instead of improving over the past decade of social and legal progress, the LGBTQ Income Gap seems to remain unchanged, and may actually be getting worse. Prudential’s report found that single LGBTQ individuals had lower salaries in 2016 than in 2012: 23% of single LGBTQ respondents were earning less than $15K, which was almost 2x the rate found in 2012 (12%). The income for the general population remained about the same
Spending & Savings Gaps
The fact that LGBTQ persons’ incomes are shrinking and not growing may help explain why they are struggling to keep up with heterosexuals in the American economy. In 2013 Prudential reported about 6% of LGBTQ consumers were unable to keep up to expenses, 25% were struggling to make ends meet (31% total). In 2016 these figures had risen to 8% and 33% respectively (41% total).
LGBTQ consumers pay a greater portion of their income in order to obtain a similar level of consumption as het/cis peers. Prudential reports that whereas consumers in the general population paid about 47% of their income for necessities, and 14% of their income for debts (61% total), LGBTQ consumers pay around 51% of their income for necessities and 15% for debts (66% total), with equivalent spending for discretionary purchases (14%). Such spending meant general consumers could save about 25% of their income, but LGBTQ consumers could only save 20%. Caught between downward pressure on earnings, and upward pressures on prices, LGBTQ workers are under increased pressure to make ends meet using savings and credit products in order to obtain a comparable set of goods as their heterosexual peers. Seven in ten (70%) LGBTQ consumers surveyed for Experian’s 2018 report noted that they mainly use their credit cards to purchase necessities.
In addition to spending a greater portion of their smaller incomes for similar goods, LGBTQ consumers are also victimized by higher transaction costs at the hands of discriminatory sellers and service providers. Discriminatory actors unfairly increasing LGBTQ consumers’ costs by overcharging them for comparable goods or denying them services–requiring the consumer to spend time and money to find a substitutable product or service
Experian reported in 2018 that over half (52%) of LGBTQ respondents in their consumer survey reported themselves in “saver” range, but also more than two-fifths (44%) of respondents said they struggle to maintain adequate savings (compared to 38% of the general population). Similarly, Aegon Transamerica reports in its study of LGBTQ retirement readiness that LGBTQ workers are more likely to have a written plan to save for retirement than heterosexuals. Despite this, LGBTQ workers are less likely to be accumulating savings toward their goals.
The mismatch between their planned and actual saving likely arises from the fact that LGBTQ persons are less able to maintain the savings they do accumulate–when it is called upon for use to afford emergencies, necessities, or to cover costs during un(der)employment. Disturbingly, the pressure on LGBTQ households does not appear to be relaxing, instead financial pressures appear to be increasing.
Retirement & Golden Years
Prudential reports that the proportion of LGBTQ households who possessed retirement savings decreased between 2012 and 2016. While in 2012, about 50% of LGBTQ consumers reported having a retirement savings account, in 2017 only 40% likewise had retirement savings (as compared to 47% of the general population). In 2012 over 49% of LGBTQ consumers had an employer-sponsored retirement plan, whereas in 2017 2016 only 35% did (40% general population). In 2012, 23% of LGBTQ Millennials and over 30% of older LGBTQ consumers reported they possessed an Individual Retirement Arrangement (IRA), but in 2017 only 18% of LGBTQ consumers reported likewise (as compared to 30% of the general population).