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The Economic Impact of Anti-LGBTQ Legislation

Last year, more than 510 anti-LGBTQ bills were introduced in state legislatures across the U.S. – more than the previous three years combined. Though many of these bills ultimately fail or are challenged in court, their mere introduction has political, psychological, and economic consequences.

Lost Revenue and Opportunity Costs

​​An economist at the University of Massachusetts Amherst has calculated that anti-LGBTQ legislation costs countries as much as 1% of their GDP, equal to $255 billion in the U.S. In 2017, when North Carolina introduced their first-in-the-nation "bathroom bill", requiring that people use the bathroom which corresponds to their sex assigned at birth, it cost the state an estimated $3.76 billion in lost revenue. The NCAA, which once favored the state to host championship events, continues to boycott the state and companies like PayPal and Amazon scuttled plans to expand facilities in North Carolina in response to the bill.

​So far, 335 companies including 3M, Airbnb, American Airlines, Honda, and Nike, have signed the Business Statement Opposing Anti-LGBTQ State Legislation, registering their clear opposition to harmful legislation aimed at restricting the rights of LGBTQ people in society.

Decreased Talent Attraction/Retention

As states scramble to attract top-tier talent in an increasingly competitive job market, laws that discriminate against any portion of the population may deter workers from moving to states where such policies are in place.

According to Pew Research, 47% of respondents of prime working age (18-29) believe stronger transgender protections are needed. These workers are less likely to choose to move to a state that discriminates against LGBTQ individuals. Considering the future workforce, Gallup polling finds that one in five Gen Z adults identify as LGBT.

As we've seen with abortion bans, doctors, nurses, and medical students are electing not to take positions or residencies in states where lawmakers have weighed in on healthcare decisions best left to doctors.

Reduced Travel and Tourism Spending

The slate of restrictive policies being introduced in state legislatures has created a complicated landscape for employers to navigate, impacting everything from business travel decisions to where meetings and conferences will take place. As one example, 17 groups cited “current Florida politics” as reasons for not booking conferences in the Fort Lauderdale area between May and September of 2023 after Governor Ron DeSantis expanded anti-LGBTQ policies. Visit Lauderdale CEO Stacy Ritter estimated the community has lost out on more than $98 million in revenue from these groups alone. 

An alarming finding from a survey of LGBTQ business travelers conducted by travel and expense management company SAP Concur found that “94% of LGBTQ business travelers have personally experienced discrimination while traveling for work.” The same survey found that 82% of these travelers had changed accommodations in the past year because they felt unsafe, compared with 54% of all travelers. When laws and policies create a perception that a community is unsafe or unwelcoming of LGBTQ travelers, these visitors will take their business elsewhere.

Increased Poverty

According to 2021 US government census data, the LGBTQ community is the fastest-growing minority segment in the U.S. with close to $1.4 trillion in spending power. For LGBTQ households, however, the picture is far from rainbows. LGBTQ households suffer from a wealth gap as compared to heterosexual and cisgender peers. Studies show that, when factors like education and experience are taken into account, gay and bisexual men tend to earn less than straight men, and lesbian and bisexual women tend to earn less than straight men but more than straight women.

Meanwhile, research from the Movement Advancement Project notes that 15% of transgender workers earn less than $10,000 per year vs 4% of the general population. MAP's analysis finds that "inequitable laws harm the economic well-being of LGBT people in three key ways: by enabling legal discrimination in jobs, housing, credit, and other areas; by failing to recognize LGBT families, both in general and across a range of programs and laws designed to help American families; and by creating barriers to safe and affordable education for LGBT students and the children of LGBT parents."​

Difficulties in Calculating the True Cost

Historically, federal data collection has excluded the LGBTQ community, thereby limiting the ability to understand the economic hardships experienced by this group. However, as of July 2021, the U.S. Census Bureau’s Household Pulse Survey now collects data on sexual orientation and gender identity (SOGI). This data, paired with economic data from the Federal Reserve Board’s Survey of Household Economics and Decisionmaking (SHED) and the Survey of Consumer Finances (SCF) helps speak to economic trends within the LGBTQ community as well as gaps in economic well-being between LGBTQ and non-LGBTQ adults.

Despite these advancements in data collecting, many large federal surveys used to estimate SOGI information, including the U.S. Census Bureau’s American Community Survey, still do not fully capture SOGI data in their reporting. This lack of information can hinder efforts to understand the true size of the LGBTQ population in the United States and lead to misleading conclusions about their economic experiences, setting back efforts to remedy existing gaps. 

Adding to the data gap, there are concerns within the LGBTQ community around data privacy, in that personal information regarding sexual orientation and gender identity could be weaponized against respondents. For more on this, see Unveiling the Data Gap by the Brookings Institution.

The Bottom Line

At Fourth Economy, we believe communities achieve prosperity by expanding equitable access to resources and opportunity. From our perspective, economic development planning is successful when it empowers individuals with the information, tools, and resources needed to fully participate in society and benefit from economic development initiatives. You can use our free Equitable Community Planning Toolkit to help your community implement equitable community planning practices or reach out to us to learn more about how we can assist you in creating a more strategic, equitable, and resilient future.

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