Most of the nuances of the LGBTQ wealth gap are rooted in discrimination. The few studies that are available show less resource availability among LGBTQ individuals, even when other factors are similar to their peers in the general population.
What does LGBTQ workplace discrimination look like? 46% of LGBTQ workers in a recent UCLA survey reported being treated unfairly because of their sexual or gender identity. These unfair treatments included being denied a promotion, being harassed or getting fired.
That doesn’t account for workplace discrimination that’s harder to spot, such as barriers to getting along with the rest of the team or being seen as someone who knows what they’re doing.
Along with mistreatment in the workplace comes income disparity.
In 2017, lesbians earned 11% less and gay men earned 32% less than their heterosexual counterparts. And being that there’s a culture of not talking about how much you’re making at a job, it’s likely those numbers are even higher than what’s reported.
Most policy changes in the financial sector are based on research findings. After all, it doesn’t make sense to apply changes to areas that don’t need it.
But that’s one of the things that makes balancing the wealth gap difficult. There simply isn’t much research to work from, which prevents changemakers from knowing how to approach these financial challenges faced by much of the LGBTQ community.
The types of information that would be the most helpful include accurate measures of the size of the LGBTQ population, as well as seeing exactly how including this underserved population affects national and local economies.
Speaking of policies, having a lack of protective policies on the federal level means there’s little LGBTQ individuals can do about financial discrimination when it happens. In fact, as of March 2020, 55% of LGBTQ people were not covered under existing civil rights laws in the U.S.
Around 10.5 million LGBTQ Americans live without any protection against credit discrimination. That’s more than the entire city of New York. That means LGBTQ individuals have less access to activities that build our credit rating, which then makes it more difficult for us to apply for mortgages or other types of loans.
A lack of federal protective policies means the LGBTQ population has to hope state and municipal laws protect us. And if they don’t, there isn’t much we can do to change that.
Without protective policies, there isn’t much to stop major financial institutions from charging ridiculously high rates simply on the basis of gender or sexual orientation. Higher interest rates result in losing more money in the long run, and further widen the already large enough wealth gap.
There are countless types of financial resources available to the general population.
Student loans often make it possible for LGBTQ folks to receive the education that helps them to achieve higher paying work. However, student loans are among some of the more difficult sources of funding for our community to get.
Around 32% of LGBTQ students seeking financial aid have reported discrimination from professionals who are supposed to help them secure funding.
Such a large wealth gap makes it harder for those impacted to reach the same financial milestones as their peers. Those in the LGBTQ community wait longer to buy a house, raise a family or make other large financial investments.
Here are a few of the major ways in which our community is impacted in the long term.
When you’re making less than your peers, it’s harder to save for retirement. According to research from the National Institute on Retirement Security, 66% of millennials have no retirement savings whatsoever because of higher costs of living, crushing student loans and wage rates not keeping up with inflation.
That rate is even lower amongst LGBTQ millennials, who are 12% less likely to have an IRA compared to the general population.
Research provides important data when it comes to understanding financial disparity. However, research requires funding. Not only are individuals less likely to be paid, but studies that involve predominantly LGBTQ groups are few and far between.
As of the writing of this article, there is no data available to help protect LGBTQ people under the Equal Credit Opportunity Act, Home Mortgage Disclosure Act or the Community Reinvestment Act.
One of the major milestones of adult life is owning a home. However, LGBTQ individuals are denied mortgages nearly 73% more often than our heterosexual peers. Among the lucky few who are granted mortgages, as a whole, the group overpays up to $86 million each year.
Because LGBTQ individuals are more likely to be denied credit building activities, that problem bleeds over into population density.
It makes sense that LGBTQ individuals would want to stick together to stay safe. However, that means our economic spending power is largely concentrated and doesn’t spread among geographical locations. Those in rural areas have less support available, which perpetuates other issues that impact the community.
There isn’t just one way to close the LGBTQ wealth gap. One of the best places to start is to end workplace discrimination that results in a wage gap.
Another great way to combat LGBTQ financial inequality is collect the data necessary to protect the community under many of the pre-existing economic policies that protect other Americans. Until relevant organizations know exactly how bad the problem is, they won’t have a clear way of making financial resources available to those in need.
Daylight is committed to bridging the wealth gap and combating financial inequality. With $1 trillion in spending power, it’s high time that LGBTQ people have the resources to use that spending power to further build our own community.
Along with empowering LGBTQ individuals, we’re challenging companies who have a large presence in the financial sector to do better. We recognize our community won’t have their needs met until the industry at large changes.