The Pink Economy: The Importance of LGBT Markets and How Managers Can Develop These Relationships
June marks the beginning of LGBT Pride Month, and many queer and allied individuals will march in their respective communities around the world, pouring money into local economies. While queer communities existed long before the Stonewall Rebellion, the Gay Liberation Movement, and Pride Parades, these institutions loosened the stigmas surrounding queer individuals in many (but not all) communities, enabling them to participate freely and openly.
LGBT populations represent a largely untapped market for businesses both as external consumers and internal leadership. To truly harness the power of the pink economy, however, management must create inclusive environments that support queer rights both domestically and abroad.
Size of Global LGBT Economy
Many sources generally accept the LGBT population accounts for 5-10% of the total population. If that figure alone fails to convince management of the importance of queer markets, the LGBT community would boast the fourth largest GDP in the world, estimated at $4.6 trillion.
Looking closer, a U.S. Treasury Department study found same-sex (male) couples earn an average household income of $176,000, while lesbian couples averaged near $124,000. Compare these figures to $113,000 attributed to heterosexual couples. Queer couples raise children less frequently, which translates to greater disposable income on average. These numbers don’t tell the whole story, though. These trends tend to favor white males, and they fail to capture the bleaker realities for transgender individuals. However, they do create a compelling case for companies and governments to focus on LGBT markets around the globe.
The Cost of Discrimination
Before managers accept this data and begin blind marketing campaigns to gay folks, though, they must take pause. Both in the United States and around the globe, queer populations still suffer from economic, political, and social oppression. In the United States, same-sex couples might enjoy marriage equality (since 2015), but they can’t walk into a bakery 100% assured they can purchase a cake for their wedding. LGBT individuals also report homelessness and joblessness at higher rates—nearly 40% of homeless youth identify as queer.
While these examples represent individual frustrations and tragedies, a global impact also exists. When anti-LGBT laws limit access to basic housing, healthcare, and education needs, queer individuals can’t participate in a country’s economy. Prior to India’s recent legislation decriminalizing homosexuality, a number of studies estimated LGBT discrimination cost India upwards of $30 billion annually in lost economic output. A similar study by UCLA’s Williams Institute revealed that more LGBT-inclusive policies would benefit Georgia’s state economy by $147.3 million per year. Beyond the costs associated with queer discrimination, the Williams Institute also found a positive correlation between a nation’s level of LGBT inclusion and its GDP. In fact, India decriminalized homosexuality this past year, and several sources believe this new policy points to good news for India’s economic future.
These statistics should persuade not only business leaders to consider queer populations, but they should also prompt state and national governments to take (fast) action. Indeed, for LGBT populations to truly participate in and contribute to the global economy, the public and private sectors must advocate for and pass legislation on behalf of these communities.
Supporting LGBT Rights and Consumers Abroad
While many companies may slap a rainbow sticker on a product and consider themselves inclusive and progressive (“We have marketed to the gays!”), this “strategy” represents a dangerous trap into which a company can fall. LGBT communities often scrutinize their purchases, and they speak truth to power without fear. They will research political candidates to whom a company donates and those candidates’ positions on queer rights. They will research international countries in which a company operates and those countries’ laws for or against LGBT individuals. In addition, they will read through your anti-discrimination policies or notice the lack thereof. In fact, online guides exist to aide individuals in making ethical purchases during Pride Month.
While I believe the onus of supporting LGBT people ultimately rests with governments, businesses can play a crucial role in expediting this process. On the more forceful end of the spectrum, companies can refuse to operate in countries that actively discriminate against queer people. Not all companies operate internationally, but they can still donate to pro-LGBT organizations and candidates, promote inclusive state and federal legislation, incorporate inclusive anti-discrimination policies, support queer-owned small businesses, place LGBT people in the boardrooms in which these important discussions take place, and much more. Queer consumers will ask these questions, so companies will benefit from putting their policies where their rainbow stickers are.
Supporting LGBT Individuals in the Workplace
Companies can support internal queer populations in many ways, too. In addition to anti-discrimination policies, businesses can offer safe-space trainings that teach heterosexual employees best practices in ally-ship. For companies that operate internationally, management should review and provide safe-travel guides for queer employees going abroad for business. Such actions benefit businesses because their queer employees will notice, and they will produce greater outputs for management when they feel safe and valued.
The Pink Economy – Moving Forward
Business leaders and legislators should protect and support LGBT markets, not only because it’s morally correct, but also because these markets represent clear opportunities for growth.
In their recent history, queer people and their allies challenged the status quo and won the right to exist openly. They contested the Reagan Administration and Big Pharma to demand the right to live during the apex of the AIDS crisis. They fought for marriage equality, and they currently crusade for the rights of their transgender community members. LGBT people also include true economic equality on this list of goals, and they clearly do not entertain fear. Companies would favor themselves to aid in the movement, because the mutual benefit outweighs any cost.
Written by: Benjamin Dorris