Creating Change with Our Change: $743 Billion in LGBT Buying Power

By any stretch of the imagination, $743 billion is a lot of money. It is also the projected buying power of the LGBT community in 2010, up from $732 billion in 2009, $712 in 2008, and $690 in 2007. This is an important figure — if we can show the economic value of embracing the LGBT community, it could have a significant impact on the progress of LGBT rights.

The analysis comes from an updated study by Witeck-Combs Communications and Packaged Facts, who have been estimating LGBT buying power for a number of years. The researchers caution, however, that buying power -- "disposable personal income" — does not necessarily equal wealth. That is a point with both economic and political consequences. Let's look at it further.

Studies of census data by the Williams Institute at UCLA have shown that the old image of the LGBT community as an affluent one is a myth. In fact, LGB people, especially lesbian couples and their children, are at least as likely to be poor as their heterosexual counterparts. Same-sex parents, on average, have lower household incomes and rates of home ownership than opposite-sex ones. And an analysis by the New York Times last year showed that same-sex couples can end up paying tens if not hundreds of thousands of dollars more in tax, legal, and health costs than their opposite-sex peers (though much depends on the specific incomes and circumstances of the individuals).

It is important to debunk the myth of LGBT affluence. As Lee Badgett, research director at the Williams Institute, said to the Orange County Blade in 2006, “The right wing uses this concept [LGBT affluence] to paint the image of the LGBT community as less sympathetic. . . . If they think a bunch of rich people are asking for rights — even if they’re reasonable rights — it makes us sound like whiners. And it sends a message that if we are so affluent, how can we say we’ve been victims of discrimination?” Indeed, one of the big questions throughout California's Prop 8 trial was the degree of political power gay people have. If a group has little power of its own, judges will apply a stricter level of scrutiny to laws that target the group.

Still, Bob Witeck, CEO of Witeck-Combs, noted in the press release about the buying-power study that there tend to be more LGBT households in major metro and suburban areas than elsewhere — and such households are generally associated with above-average income. Same-sex couples, especially men, are also more likely to have two partners in the workforce, and less likely to have children (despite a growing number of LGBT parents), which may give these couples a "slightly higher per capita household income."

No matter the distribution of economic resources within the LGBT community, however, $743 billion is a lot of money in aggregate. Corporate America has long realized this. Many major corporations have targeted the LGBT market through advertising, organizational, and event sponsorships — and most of the same ones have been in the forefront of instituting LGBT-inclusive non-discrimination policies and extending health care and other benefits to employees' same-sex partners. They know (and I know they know, because I worked at a Fortune 100 firm for several years) that the LGBT community prefers to buy from companies that support their rights.

You know what, though? Even if the benefits they offer were motivated by economic gain more than a pure sense of equality, I'll take them. They have set standards and expectations and in many cases provided protections to people that state and federal governments have not.

Businesses still need to get smarter about marketing to the LGBT community. Many still need to learn that the way one markets to a single, 20-something gay man is different from how one markets to a 40-something couple of lesbians with two kids. They need to ensure that internal policies and external marketing are aligned. And we in the LGBT community need to realize our economic power and use it to apply pressure — supporting companies that support us, shunning those that don't, and digging deep to find out which companies may have LGBT-friendly policies but are funding anti-LGBT politicians for other business reasons. In this way, maybe we'll create a little change with our change.

Photo credit: Kevin Collins