Gays May Have More Disposable Income, But Therapy Bills from Growing Up Gay Add Up
There’s a common stereotype that gay men are cultured, fabulous, and flush with cash—jet-setting across the globe with seemingly limitless resources. This perception may be rooted in some truths, such as internalized homophobia driving many gay men to seek high-status careers, such as doctors or lawyers, as a way to gain validation. Additionally, until recent decades, the idea of starting a family as a gay person seemed unlikely, leading to the assumption that this would result in greater disposable income.
Despite these assumptions, the financial picture is far more complex. LGBTQ+ individuals, including gay men, face unique systemic and societal factors that contribute to a persistent wage gap, challenging the idea that wealth is a given in queer communities.
The Economic Status of Same-Sex Couples: A Closer Look
The economic landscape for same-sex couples presents some compelling data, shedding light on how gender and marital status influence income disparities. A January 2022 analysis by the Brookings Institution, using Census Bureau data from 2015 to 2019, revealed intriguing trends about same-gender households. According to their findings, same-gender married couples generally have higher rates of dual employment and higher median incomes compared to their opposite-gender counterparts.
While the data doesn’t explicitly state that dual employment directly causes higher median incomes, it’s reasonable to infer a cause-and-effect relationship between the two. Here’s how median incomes for prime-age families break down by couple type:
- Male same-gender couples: $107,200
- Opposite-gender couples: $97,000
- Female same-gender couples: $95,720
Interestingly, female same-gender couples earn the least among married same-gender and opposite-gender households, likely influenced by the broader gender wage gap. As of recent data, women earn just 83 cents for every dollar earned by men, highlighting systemic inequities that persist regardless of sexual orientation.
However, these statistics only account for married couples, leaving out the majority of LGBTQ+ individuals. According to a 2021 Gallup poll, only 0.5% of American adults are married to same-sex partners, while 47.7% are married to opposite-sex partners, underscoring the need to examine the financial experiences of the LGBTQ+ community as a whole.
Understanding the LGBTQ+ Wealth Gap
When examining the LGBTQ+ community as a whole—not just same-sex couples—economic disparities become even more apparent. The Center for LGBTQ Economic Advancement & Research highlighted this in a 2019 infographic, which drew on findings from 2017 studies. While the data may seem a bit dated, it highlights the persistent lack of research on this topic and exposes systemic inequalities that continue to affect the LGBTQ+ community.
In 2017, the data showed that, on average, LGBTQ+ workers earn less than their heterosexual and cisgender peers:
- Lesbians earned 11% less than heterosexual women.
- Gay men earned 32% less than heterosexual men.
- Bisexual women earned 30% less than heterosexual women.
- Bisexual men, interestingly, earned slightly more than their heterosexual peers.
- Transgender individuals were four times more likely to earn less than $10,000 annually compared to the general population.
The infographic also highlighted disparities in financial stability between LGBTQ+ consumers and the general population. LGBTQ+ individuals were:
- 7% less likely to have a savings account.
- 5% less likely to have a 401(k) or retirement plan.
- 12% less likely to have an individual retirement account.
Despite higher educational attainment, LGBTQ+ individuals are more likely to face underemployment, receive lower compensation, and struggle to save or purchase assets. Ultimately, LGBTQ+ people are disproportionately affected by poverty, with 21.6% living in poverty compared to 15.7% of heterosexual people.
More recent data reinforces these findings. In April 2022, Marc Folch published a paper in the Social Science Research Network titled The LGBTQ+ Gap: Recent Estimates for Young Adults in the United States. Using data from a nationally representative sample of bachelor’s degree recipients, Folch found that sexual and gender minorities earned 12% less than their straight peers just one year after graduation. Alarmingly, this gap widened to 22% less after ten years.
About half of this earnings gap can be attributed to LGBTQ+ graduates being less likely to pursue high-paying majors, which leads to fewer opportunities in high-paying professions.
Examining Wage Gaps in the LGBTQ+ Workforce
In early 2022, the Human Rights Campaign (HRC) published a comprehensive analysis of wage disparities affecting LGBTQ+ workers in the United States. The findings revealed that, on average, LGBTQ+ workers earn just 90 cents for every dollar earned by typical workers. However, breaking this data down by race, gender identity, and intersectional factors reveals even starker inequalities.
Among racial groups, LGBTQ+ white workers fared better than most, earning 97 cents for every dollar earned by the typical worker. Meanwhile, LGBTQ+ Hispanic workers earned 90 cents, Black workers earned 80 cents, and Native American workers earned only 70 cents. Asian and Asian Pacific Islander (API) LGBTQ+ workers were the sole group to achieve wage parity, earning $1 for every dollar earned by their peers.
Gender identity further complicates the landscape. LGBTQ+ men earned 96 cents for every dollar earned by a typical worker, while LGBTQ+ women earned 87 cents. Non-binary, genderqueer, gender-fluid, and Two-Spirit workers earned significantly less, at 70 cents on the dollar. Trans men earned 70 cents, and trans women faced the steepest disparity, earning just 60 cents for every dollar.
Combining these factors paints an even more sobering picture. For example, while API LGBTQ+ women achieved wage parity, white LGBTQ+ women earned 96 cents, Black LGBTQ+ women earned 85 cents, Native American LGBTQ+ women earned 75 cents, and Hispanic LGBTQ+ women earned just 72 cents for every dollar a typical worker earned.
The HRC report noted that workplace discrimination is a likely driver of these disparities. Nearly one-third of LGBTQ+ workers reported experiencing discrimination at work, with the rates climbing significantly among Black LGBTQ+ individuals and transgender workers. This discrimination often impacts financial well-being, contributing to unemployment, underemployment, and wage inequities.
And discrimination isn’t limited to the workplace. The Center for LGBTQ Economic Advancement & Research has highlighted how LGBTQ+ consumers, businesses, and organizations face predatory and unfair practices in financial markets. For example, a study of Home Mortgage Disclosure Act data from 1999 to 2015 revealed that same-sex couples were denied residential mortgages 73% more often, charged up to 9.2% higher interest rates and fees, and overpaid approximately $86 million annually for their home loans.
Beyond Discrimination: Early Choices and Their Role in the LGBTQ+ Wage Gap
While workplace discrimination plays a significant role in the LGBTQ+ wage gap, other factors may contribute to these disparities long before individuals enter the workforce. A June 2022 article by Megan Carnegie for the BBC explores how decisions made during academic years and early career planning shape long-term earnings potential, with discrimination in the workplace further compounding these effects.
For instance, a 2019 study published in the Economics of Education Review revealed that LGBTQ+ students in the United States are generally less likely to complete high school or pursue higher education. This educational gap limits access to higher-paying career opportunities later in life.
Additionally, Marc Folch’s previously discussed research found that LGBTQ+ graduates are more likely to choose majors with a higher concentration of women, such as the arts or communications. These fields, while fulfilling for many, are associated with lower average salaries. Consequently, LGBTQ+ individuals are more likely to enter occupations with predominantly female workforces, where wages are typically lower.
Another troubling trend is the avoidance of STEM (science, technology, engineering, and mathematics) fields by LGBTQ+ youth. A survey of individuals aged 13 to 23 found that 29% of those identifying as lesbian, gay, bisexual, transgender, undefined, or asexual avoided STEM careers due to fear of discrimination. This has resulted in a significant talent drain; it is estimated that today’s STEM industries have lost as many as 120,000 qualified candidates because of anti-LGBTQ+ bias.
Workplace Discrimination: A Barrier to LGBTQ+ Employment and Earnings
Discrimination against LGBTQ+ individuals in the workforce continues to create significant obstacles to employment and career progression. Research consistently highlights these barriers across various regions, with LGBTQ+ job seekers and employees facing unequal treatment at alarming rates.
For example, LGBTQ+ graduates are less likely to secure full-time employment within a year of graduation. In the UK, gay and lesbian applicants are 5% less likely to be invited to interviews than their heterosexual peers. Similarly, in the United States, resumes from openly gay or lesbian applicants are often scrutinized more critically by employers, reducing their chances of securing interviews or job offers.
A 2021 report from the Williams Institute at UCLA School of Law sheds further light on the systemic challenges faced by LGBTQ+ employees. According to the report, nearly half (46%) of LGBTQ+ workers have experienced unfair treatment at some point in their careers due to their sexual orientation or gender identity. This includes being overlooked for jobs, promotions, or raises; exclusion from workplace events; harassment; denial of additional hours; or outright termination.
The report also revealed that in the year prior to its publication, nearly 10% of LGBTQ+ employees reported workplace discrimination, with an estimated 9% stating they were denied a job or laid off because of their orientation or identity. Additionally, more than one in four LGBTQ+ workers reported experiencing sexual harassment at work during their careers, while nearly 21% faced physical harassment, including instances of being punched or beaten while on the job.
This persistent discrimination impacts LGBTQ+ earnings in various ways. For some, it delays career progression or forces frequent job changes as they seek more inclusive workplaces. These barriers not only undermine individual financial stability but also perpetuate the broader wage gap experienced by the LGBTQ+ community.
The COVID-19 Pandemic’s Role in Widening the LGBTQ+ Wealth Gap
The COVID-19 pandemic has exacerbated economic inequalities for marginalized communities, and the LGBTQ+ population is no exception. Data from the U.S. Census Bureau’s Household Pulse Survey, analyzed in a June 2022 article by The Washington Center for Equitable Growth, reveals stark disparities in job losses and financial security within the LGBTQ+ community compared to their non-LGBTQ+ peers.
The Household Pulse Survey, initiated in April 2020 to track the pandemic’s economic impacts, began collecting data on sexual orientation and gender identity in July 2021. Since that time, about 28% of LGBTQ+ respondents reported experiencing job loss—a rate 10% higher than non-LGBTQ+ respondents. The hardest-hit groups included LGBTQ+ individuals aged 25 to 54, while older and non-LGBTQ+ respondents reported lower rates of job loss.
The impact was even more pronounced among LGBTQ+ people of color. Between July and August 2020, 60% of Black LGBTQ+ households and 71% of Hispanic LGBTQ+ households experienced unemployment or wage loss. By comparison, the unemployment rate for non-LGBTQ+ households of all races during this period was significantly lower at 45%.
Housing insecurity also disproportionately affected LGBTQ+ individuals during the pandemic. The eviction moratorium initially issued by the Centers for Disease Control and Prevention in 2020 provided temporary relief, but its expiration in September 2021, following a Supreme Court ruling, left many renters vulnerable. This was particularly significant for LGBTQ+ communities, as 41% of LGBTQ+ people—and 47% of LGBTQ+ people of color—rent their homes, compared to just 25% of non-LGBTQ+ individuals.
Bridging the LGBTQ+ Wage Gap: Steps for Employers and Policymakers
The LGBTQ+ wage gap is a complex and multifaceted issue, but there are several strategies that can help bridge the gap. Both employers and policymakers have a critical role to play in promoting pay equality and reducing disparities in the workplace.
According to the Human Rights Campaign (HRC), employers can take concrete steps to create more equitable environments. For instance, employers should implement non-discrimination policies that include both sexual orientation and gender identity across all aspects of their operations. Transparency in pay practices is also essential; by adopting policies that make salary data more visible, employers can identify and address pay disparities. Furthermore, benefits packages should be inclusive of both legal spouses and domestic partners to ensure fairness in benefit offerings. Regular assessments of pay data by sexual orientation, gender, and identity are crucial for driving decision-making, including the development of leadership programs and policies that actively combat the wage gap.
Beyond workplace policies, lawmakers also have a significant role in advancing pay equality. The Center for American Progress published a list of ten essential actions in 2021 to support pay equality, which includes efforts such as reinstating the federal collection of pay data, tackling gender and racial wage gaps in federal workplaces, and launching pay transparency initiatives. Other proposed measures include increasing enforcement budgets to ensure compliance, conducting more compliance reviews of federal contractors, and boosting support for policies that promote economic security for women.
Legal and social changes also have a profound impact on the wage gap. According to Pawel Adrjan, director of EMEA economic research at global recruitment site Indeed, legal advances in LGBTQ+ rights, such as the legalization of same-sex marriage in the U.S., have been shown to reduce discrimination and prejudice. As a result, LGBTQ+ individuals in states with marriage equality experienced higher rates of labor force participation. This suggests that shifting legal and social norms can play an important role in addressing the wage gap by reducing the discriminatory barriers that LGBTQ+ individuals face in the workplace.
Together, these strategies—both from employers and policymakers—are essential for narrowing the LGBTQ+ wage gap and ensuring more equitable opportunities for all workers.
Let's Shatter the LGBTQ+ Wage Gap
The wage gap for LGBTQ+ individuals is deeply rooted in early-life experiences, compounded by discrimination during education and throughout their careers. Addressing these challenges requires a comprehensive approach that combines systemic changes with individual action. Tackling the wage gap will take a collective effort, but it is essential for creating a more equitable labor force.
For those who have faced discrimination or struggled with educational or economic barriers, it’s crucial to keep pushing forward. Overcoming setbacks takes perseverance, and actively seeking out opportunities—even when it feels uncomfortable—can make a significant difference.
Supporting one another within the community also plays a vital role, since the wage gap affects all members of the LGBTQ+ community, regardless of gender, race, or sexuality. By mentoring, sharing opportunities, and offering encouragement, LGBTQ+ individuals can create an environment where everyone can succeed.
Through solidarity and mutual support, we can move toward a more equitable future in the workplace and beyond. While the journey won’t be easy, it is through collective action and mutual support that lasting change can be achieved.
And remember. Every day is all we have, so you've got to make your own happiness.
For more information on this topic, listen to Episode 49. Let's Shatter the LGBTQ+ Wage Gap.
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