Money, Myths, and Change: The Economic Lives of Lesbians and Gay Men


The common stereotype that lesbians and gay men are more affluent than heterosexuals is only one of many misconceptions that M. V. Lee Badgett debunks in this comprehensive work. Studying the ends and means of gay life from an economic perspective, she paints a more accurate picture than ever before of gay and lesbian standards of living, financial and family decisions, and professional lives, analyzing along the way the crucial issues that affect the livelihood of gay men and lesbians: workplace discrimination,...
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The common stereotype that lesbians and gay men are more affluent than heterosexuals is only one of many misconceptions that M. V. Lee Badgett debunks in this comprehensive work. Studying the ends and means of gay life from an economic perspective, she paints a more accurate picture than ever before of gay and lesbian standards of living, financial and family decisions, and professional lives, analyzing along the way the crucial issues that affect the livelihood of gay men and lesbians: workplace discrimination, denial of health care benefits to partners and children, the corporate wooing of gay consumer dollars, and the use of gay economic clout to inspire social and political change.
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M. V. Lee Badgett is an associate professor of economics at the University of Massachusetts-Amherst and research director of the Institute for Gay and Lesbian Strategic Studies.
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Money, Myths, and Change: the Economic Lives of Lesbians and Gay Men

By Mary Virginia Lee Badgett

University of Chicago Press

Copyright © 2001 Mary Virginia Lee Badgett
All right reserved.

ISBN: 0226034011

Introduction: Meeting the Myths

Are the economic decisions made by gay people different in some way from those made by heterosexual people? Do lesbian, gay, and bisexual people make economic decisions differently? Do they face different constraints from heterosexual people? How do gay people's standard of living compare with heterosexual individuals' and families' standard of living?

These questions are hard to answer because we know very little about the economic position of lesbian, gay, and bisexual people. Social stigma, violence, and discrimination have fostered a strategy of invisibility for many gay people, and that invisibility has made the lives of the broad range of gay people difficult to study. The combination of gay invisibility and selectively generated information has instead fostered the spread of a number of misleading myths about where and how lesbian, gay, and bisexual people fit in economy.

The myth of privilege: Lesbians and gay men make up an affluent, well-educated, professional elite, occupying positions of power and influence in the workplace and society at large. Many gay people in the United States are wealthy and influential: PresidentClinton's friend David Mixner, media mogul David Geffen; wealthy philanthropist and U.S. Ambassador to Luxembourg James Hormel; popular singer k.d. lang; and actor Ellen DeGeneres. Magazines feature cover stories on high-level corporate or political officials who are lesbian or gay. Artists publicly mourn the devastating losses to the arts communities from the HIV epidemic, including well-known gay artists such as Keith Haring and Robert Mapplethorpe.

The DINK (double income no kids) myth: Gay people have no family responsibilities to hamper their job advancement or accumulation of wealth. With no children to support or to save for, gay couples have twice as much income to spend on themselves. Indeed, some marketing surveys of lesbians and gay men show household incomes that are much higher than the typical U.S. household. As a result of this financial freedom, gay couples can afford homes in chic neighborhoods and make large contributions to support their political groups.

The myth of protective invisibility: Unlike other minority groups, gay people can avoid the effects of social stigma by hiding their homosexuality. Women and ethnic minorities, on the other hand, are easily identified and have been clearly singled out for unfair treatment in the past (and even today, many would argue). If gay people choose to be indiscreet and "flaunt" their homosexuality, they must face the social disapproval that is otherwise easily avoided.

The myth of the conspicuous consumer: Gay people are hedonistic and consumption-oriented, an ideal niche market for upscale products. Gay magazines and newspapers promote their readers to advertisers as an ideal market, and liquor companies, travel agencies, and bottled water companies target ads at gay consumers.

These are not the only stereotypes about lesbian and gay people. Many other now discredited myths and stereotypes have circulated widely over the years: gay people are child molesters, predatory, promiscuous, and mentally ill. But the economic myths, with their mixture of potentially positive and negative images, constitute a new challenge to social scientists, to the U.S. public, and to gay people and their political allies. Exploring the actual economic position of gay and lesbian people requires meeting these myths head-on.

The Origins of the Economic Myths

Where do the myths come from? Like many stereotypes, these myths often start with some observations about particular gay and lesbian people and then overgeneralize and overextend their reach. Some of the myths have been around as long as gay people have been noticed by the larger society. The myth of privilege and affluence has been around at least since ancient Roman times, when writers claimed that homosexuality was a weakness of the upper classes (Boswell 1980, 56). For many decades, the best known lesbian and gay people were part of a cultural elite, including artists and intellectuals such as Oscar Wilde, John Maynard Keynes, Walt Whitman, and Gertrude Stein, a fact that backed up the ancient claims.

Although the modern sources of the myths are complex, some of the blame for the promotion of the stereotypes certainly belongs to scholars who do not carefully interpret their findings. Early studies of lesbian and gay people--even sympathetic ones like Alfred Kinsey's--used samples of gay people who were not typical of gay people as a whole, which often skewed the socioeconomic status of those in the survey (see Kinsey et al. 1948, 105-9). In spite of increased skepticism about the current applicability of those early studies and a growing recognition of the variation in economic situations within the gay and lesbian communities, studies using biased samples persist. Recent marketing studies that are used to actively support myths often come from readers of gay magazines and newspapers, a group that is no more representative of the whole gay community than readers of the New York Times or USA Today are representative of people in the United States as a whole.

Clearly, gay people are hard to study. Even defining whom we should study, that is, which people are "gay" or "lesbian," has caused a heated debate in political and social arenas. One older critique of the lumping together of lesbians and gay men points to the very different experiences of men and women in our societies, differences that will mean that the lives of gay men and lesbians may be more different than similar. Looking at the research on economic differences between men and women, discussed in chapter 2, reveals many good reasons to believe that gender is at least as important as sexual orientation in determining a person's economic position. Because of those differences, I distinguish between lesbians and gay men when necessary in order to consider not just the impact of gender but to think about the interactions between the categories of gender and sexual orientation. When such distinctions are less important, I use the term "gay" to refer to both groups collectively.

More recently, the challenges to boundaries have expanded. Are bisexual people who have both male and female sex partners and intimate relationships part of the lesbian and/or gay community? What about those people whose biological sex at birth does not match their later gender identity? The development of a bisexual identity and of transgender and transsexual identities also pose difficulties for the researcher. To the extent that the larger society does not recognize the subtle differences between these groups, the distinctions between the economic experiences of gay, bisexual, transgendered, and transsexual people will be relatively small. I suspect, however, that as theorizing and empirical research related to these other categories progresses, distinctions will emerge in experiences among the groups delineated by other sexual and gender identities. Certainly, bisexual, transgendered, and transsexual people have options and decisions to make that are different from those faced by gay men and lesbians.

In this book, then, I focus primarily on the experiences of people who can by some definition be considered gay or lesbian. Given the broad range of dimensions of sexuality and gender identity, a categorization of people based primarily on the erotic attraction to those of the same sex is necessarily a crude one, but the crudeness is balanced, I believe, by the important analytical and empirical insights that this relatively simple categorization offers. Lesbians and gay men face distinctive challenges as workers, consumers, and family members.

I should also note at this point that defining my focus on sexual orientation led me away from an in-depth discussion of the HIV/AIDS epidemic and its full impact on the economics of the gay community. Such a topic would be a worthy subject of its own book. The epidemic appears throughout my discussion, of course, since HIV has greatly influenced gay people's position in the workplace, family, marketplace, and society at large. I have not covered the many other ways that HIV has affected the gay economy, including the economics of health, health care, politics, and knowledge. For analytical purposes, I have set those subjects aside because I wanted to avoid a disproportionate focus on gay men and, more significantly, because the issues raised here for lesbians and gay men pre-date--and may even postdate--the HIV/AIDS epidemic.

Defining the book's boundary around the sexual orientation of gay men and lesbians does not address exactly what "gay" or "lesbian" means, however. Does it mean someone who engages in same-sex sexual behavior? Someone who fantasizes about such acts? Someone who will identify himself or herself as gay or lesbian? Historians and anthropologists have shown that sexual activity between two people of the same sex has occurred throughout history and in many (if not all) cultures, but the social meaning and interpretation of that behavior has varied considerably. In ancient Greece, for example, sexual relations between two men were acceptable under certain circumstances related to the class status of those involved and to the actual role taken by each man during the act. Historians continue to debate to what extent we should call such men "gay" from a modern perspective (see articles in Stein 1990). Even today, in some cultures a man who is always the insertive partner in same-sex anal intercourse is still considered heterosexual (Almaguer 1991).

A recent study of sexual behavior in the United States demonstrates that while some people could be measured as "gay" by all possible definitions involving behavior, desire, and self-identity, others might engage in or have some desire to engage in same-sex sexual behavior but would not call themselves "gay" (Laumann et al. 1994). People classified as "gay" under any of those three definitions could face social stigma and, therefore, social sanctions, but researchers must be conscious of potentially differential effects. A fantasy that is never acted upon is not likely to have the same social consequences as publicly identifying oneself as gay.

Another tough question is how to find gay people, however defined, when those characteristics are not directly observable. Relying on self-reported behavior or identity means that if some people do not answer survey questions honestly, as might happen if closeted survey respondents fear discovery by a boss or family member, then survey results are suspect. Just as important, the places that researchers can relatively easily find gay people, such as gay bars, gay organizations, or gay newspaper readerships, might attract a group of gay people who are quite different from other people also defined as gay by the same kind of definition but who do not congregate in the same social spaces. Surveys of those groups of gay people might be biased in the sense that the people surveyed are wealthier or less likely to have children than the average gay person.

Survey bias is the starting point of a critique of the economic myths outlined above. This critique, which focuses on who was surveyed to generate "findings," is neither subtle nor startling for social scientists, who are conscious of the pitfalls in studying smaller subgroups to learn something about a larger group. (Ideally, the subgroups studied are chosen at random from the larger population, allowing the description of the smaller group to be applied to the larger group.)

Given the difficulties in studying lesbians and gay men, one might reasonably ask whether it is worth the trouble, especially in an economic context where we want to make some generalizations about all gay people, and perhaps even all heterosexual people, too. One answer is that the difficulties are decreasing as some recent surveys, discussed throughout this book, now provide a better picture of the range of experiences of gay people. Another answer to that challenge is that the myths themselves offer answers--although flawed ones--to the kinds of questions that social scientists should ask as they seek to understand the economic and social conditions of lesbians' and gay men's lives. Extending academic attention to the economic situation of lesbians and gay men is logical from an academic perspective, as economists and sociologists, in particular, try to understand the role of other social categories, such as race or gender, within the economy. The value of economic information has been heightened by ongoing political controversy over the legal standing of gay people, as policymakers, judges, and voters wrestle with public policy debates and lawsuits.

Rather than assuming that gay and lesbian people are economically distinct from heterosexuals in the sense implied by the myths, this book starts with a simpler approach that assumes that lesbian, gay, and bisexual people have the same basic economic needs as heterosexual Americans: providing for the material necessities of life, such as food, clothing, health care, and shelter for themselves and, perhaps, for children, as well as providing other culturally appropriate and necessary items and services. Gay people might use some or all of the same strategies for producing and acquiring goods and services as heterosexual people use, such as working for pay, doing housework, caring for children, and pooling resources with significant others. Studying these ends and means from an economic perspective might show that gay people do, in fact, have different income and employment outcomes, for instance. But economic inquiry also makes it possible to distinguish a simple empirical question about outcomes--are gay people's economic lives different--from a more interesting and more complex question about processes--why are they different?

Economics and Sexual Orientation

Until recently, economists have paid almost no attention to gay and lesbian people, and certainly not the kind of sustained attention necessary to provide useful insights. Within other academic disciplines, though, most notably history, psychology, sociology, and the humanities more generally, lesbian and gay studies has become a lively and exciting field. Academics from these other disciplines, as well as the occasional economist, have found economic factors to be quite important in understanding the development of a gay or lesbian identity in twentieth-century United States.

Some relatively early studies of gay and lesbian history suggest that modern "gay" and "lesbian" identities were influenced by economic circumstances and market forces. John D'Emilio's historical analysis of the United States, for instance, connects the rise of the gay community with the emergence of modern capitalism. The development of markets and of increasing wage labor in the nineteenth century led to the weakening of individuals' economic reliance on household production and their families (D'Emilio 1984). The loosening of family ties, the urbanization of the population, and the increasing separation of sex from procreation allowed the creation of a social space for those erotically attracted to people of the same sex, thus promoting the development of a new sense of social identity. Historian George Chauncey's account of the development of New York's gay world demonstrates how such space was created in the city's bars, bathhouses, restaurants, and boardinghouses in the late-nineteenth and early-twentieth centuries (Chauncey 1994).

In her analysis of the separation of men's and women's economic roles and occupations, economic historian Julie Matthaei draws similar ties between the economy and the development of modern gay and lesbian identities. The segregation of men and women in different economic spheres promoted contact and close ties among people of the same sex. For women in the twentieth century, the expansion of women's jobs and education created an economic role for women outside of the family and contributed to the development of lesbianism in two ways (Matthaei 1995, 17). First, education and work restricted women's marriage options by making those with jobs less desirable as wives. Second, and perhaps more important, these economic opportunities provided the possibility of economic independence, a crucial precondition for the privacy and material support necessary for women to live together without men.

All of these historical analyses suggest that what it means to be gay or lesbian in the United States in the twentieth century has been shaped by a broad social context that includes economic development. These studies have sketched out a context for thinking about the economics of being gay. But they have little to say about the role of lesbians and gay men within the contemporary economy and less about the impact of the economy on the lives of today's lesbians and gay men.

Variations in Modern Economic Life

Economists have only recently begun to consider the importance of social characteristics such as race, ethnicity, and gender, creating analytical approaches that may be applicable to sexual orientation, as well. The key issue economists have addressed is understanding why members of different social groups--men and women, white people and black people, gay people and heterosexual people--come to have such divergent roles and experiences in economic activities. Those differences are evident in many aspects of life, even in activities that do not immediately strike one as being related to the economy or as being the source of (or evidence of ) differences related to sexual orientation.

But from the second our alarm clocks rouse us to start a new day, each moment is full of potential economic significance and is influenced by our gender, ethnic, and sexual orientation identities. Consider the morning activities evident in different households, for example. In my own home, I shower and dress, then focus my attention on walking the dog, making coffee, fixing breakfast, planning the day with my partner, and reading the newspaper. In the next town over, my friends Donna and Maria wake up their two young children to get them dressed, fed, and off to school. Another gay couple around the corner, Robert and Jim, spend a few minutes in their kitchen over coffee coordinating the use of their car, and making decisions about who will stop by the grocery store on the way home that evening and who will make dinner. Doug and Sarah compare schedules before Sarah gets their daughter in the car to drop her off at daycare. The final stage in each morning routine is usually the step out the door to head to work or, in Maria's case, to go to school.

Most people would clearly see the last step as an "economic" one that varies greatly from person to person and perhaps from group to group: we go to work to provide the money we need for food, clothing, shelter, daycare, etc., or we attend school to improve our future employment prospects. Grocery shopping also obviously involves a market transaction in which we exchange money for food items. The points where people and money come together, whether in a checkout line at the grocery store or on payday at a workplace, are obviously points of potential divergence by race, gender, or other group. On one level, the activities described in the previous paragraph seem quite similar across households, but on another level one can easily imagine the possible impact of an individual's cultural background and social status--perhaps including sexual orientation--on their tastes for particular consumer goods or participation in the paid labor force.

From an economist's perspective, the other routine aspects of our mornings are also economic in nature. From milk, cereal, water, coffee beans, electricity, appliances, and our own time and energy, we produce breakfast. Raising children involves parents' time and money, perhaps including payments for education or child care, not to mention love and sacrifice. The use we get from our past purchases of expensive assets like cars or houses might also involve the efficient sharing of those items with others. In households with more than one person, sharing also involves deciding how to use assets and time and who will use them to improve the wellbeing of the household's members. Economic decisions such as who does what within a household may very well depend on the sex or sexual orientation of the individuals involved, for instance.

From an economist's perspective, all of those tasks--producing meals, allocating time, using assets--are "economic" tasks not just because of the money and time involved, but because their outcomes define our material well-being. They are also "economic" because people are likely to use economic factors in their decision-making. This might mean a rational process of comparing possible uses of household members' time and choosing the one that adds the most to well-being in some sense. Or "economic" could mean acting with an awareness of constraints, whether time- or money-related. If gay people and heterosexual people (or men and women, or white people and black people) make decisions in different ways, have different ideas about the proper duties for men and women (or other social norms), form distinctive families, or face different constraints, then we would find very different outcomes by sexual orientation in whatever economic role we examine, including consumer, producer, investor, or family roles.

Difference can easily become disadvantage. Collusion among relatively powerful individuals who have negative attitudes about members of other social groups might limit access to jobs or particular housing markets for people in disfavored groups, for example. The social nature of the economy means that what we call discrimination is possible or even likely if members of dominant groups, say heterosexuals, have a distaste for working with or employing lesbian, gay, or bisexual people. Distaste might be the product of social norms, or rules about how members of a society should behave, that forbid certain kinds of sexual practice or that define appropriate affectional and sexual partners as those of the opposite sex. The economic impact of being seen as a member of a disfavored group can be exacerbated when economically related institutions, such as employers' health care plans or legal definitions of marriage, either deliberately or incidentally exclude certain kinds of people.

This book draws from several economic traditions to develop a more complex view of how lesbians' and gay men's unequal economic position is constructed. On one level, the analysis here takes into account the market processes and incentives that shape individuals' and firms' decision-making, which is what most people think of when they hear "economics." In addition, the analysis considers how social norms about gender and sexuality, public policies related to the workplace and family, collective action by members of privileged and disadvantaged groups, and economic institutions such as employers' compensation practices constrain gay people and shape their economic decisions and positions. Historical studies reveal that those norms and institutions vary over time and are not set in stone, suggesting the need to consider the complex set of social, political, and economic forces that influence norms and institutions. They may also be the products of or shaped by collective action, and those related to gay and lesbian people have at different times been shaped by the collective efforts of heterosexuals and, more recently, by gay people themselves. Any account of the economic position of gay people in the workplace, consumer marketplace, or family that ignores the influence of norms, institutions, and collective action misses important influences on the economics of being gay.

Another important question for economics asks why group differences emerge in the first place. What role does the economy, or more specifically, capitalism, play in creating the divisions between races, ethnic groups, or sexual orientations? Economists have struggled to explain why such dynamics related to race or gender might occur. Some economists assert a psychological attitude of racism or sexism and consider the impact of those attitudes. Others note the potential advantage to creating an "out group" that can be placed at a competitive disadvantage or can be assigned certain economic roles (as in assigning women childrearing responsibilities). Why would engaging in certain sexual practices come to define not just individuals but groups, and why would one group, say heterosexuals, want to dominate another group, say gay people, in political and economic terms? While this book does not attempt to answer these questions about the creation of categories directly, at the very least it should help to understand why those categorizations of people by sexuality are perpetuated through economic forces and why they are not easily changed.

Workplace Discrimination and Sexuality

The next three chapters of the book develop the issue of discrimination and intergroup relations in the context of lesbians' and gay men's jobs and careers. Chapter 2 examines the myth of gay privilege from the workplace perspective with a close look at the earnings of gay people and the impact of discrimination on those earnings. Study after study has demonstrated that women and people of color earn less than white men, most likely as a result of employment discrimination. Is a similar process at work for lesbians and gay men? Recent surveys that fulfill basic statistical requirements allow detailed statistical comparisons that contradict the myth of gay affluence. Rather than constituting an economic elite, as suggested by marketing surveys, academic studies show that gay men actually earn less than heterosexual men with the same education, experience, and residential characteristics, and lesbians earn no more than comparable heterosexual women (but far less than heterosexual men).

Those findings undermine the myth of gay affluence and shift our attention toward understanding why gay men and lesbians are compensated unequally. The financial penalty for being gay is evidence of systematic employment discrimination. As chapter 2 discusses in more detail, economists' dominant explanation is the existence of employers' distaste for hiring certain groups of people. Economists like Nobel laureate Gary Becker (1971) argue that, given enough market competition, market forces should erode the practice of discrimination, if not the actual discriminatory impulse. Employers who discriminate lower the productivity of their workforce, since by definition they hire the less productive person from the favored group. An employer who does not discriminate, then, should be able to earn higher profits than discriminating competitors, allowing greater growth and eventually driving the less profitable discriminating companies out of business. The implications of this theory for public policy are clear: forget nondiscrimination laws and let the market wear away discrimination. Closely examining the plausibility of this model of discrimination is essential for the discussion of public policy taken up in chapter 7.

Economists have also suggested other rationales for discrimination. Some theories shift attention away from individuals' attitudes about other groups as a cause of discrimination and toward collective attempts to monopolize particular economic roles and positions, especially those with high wages or employment stability. From this perspective, members of dominant groups have a personal financial stake in preserving an economic hierarchy. If this is the case, then competitive pressures might not wear discriminating companies down completely, since there is too little competition in some industries and because chronic unemployment gives companies access to many productive workers from favored groups. These alternative explanations of discrimination, developed further in chapter 2, point to collective action and social norms as important influences on gay people's position in the labor market. Norms about the proper behavior of men and women may influence the treatment and economic choices of gay men and lesbians, who by definition do not conform to what is considered proper behavior for men and women. At various times and in different contexts, collective action to enforce social norms related to gender and sexuality and to preserve economic hierarchies have resulted in laws and policies that require or allow discrimination against gay people.

In a context of potential discrimination and no policy protection, disclosing one's gay sexual orientation at work involves clear economic risks. Chapter 3 presents the ethical and social aspects that other researchers have considered in the context of disclosure and adds an economic angle by comparing the potential economic costs and benefits of being out at work. Chapter 3 also takes on the myth of invisibility, which blames gay people's openness for any discrimination that occurs. Public opinion polls suggest that Americans do not want gay people to disclose their sexual orientation. In the workplace context, though, discouraging disclosure treats gay people unequally since heterosexuals disclose their sexual orientation in many ways. Furthermore, the supposedly protective cloak of invisibility does not protect gay workers who must consciously and actively hide their sexuality at the cost of important social contact that could increase productivity and enhance the likelihood of promotion. On a larger scale, "coming out" has a potentially huge economic impact if closeted gay workers must strategize and actively hide their sexual orientation, reducing not only their productivity but the economy's overall output. Thus, policies that encourage gay people to hide their sexual orientation have clear social consequences.

One of the most obvious examples of workplace inequality for gay people is found in employers' fringe benefits practices that cover spouses and children of employees. Chapter 4 shows how these institutional practices discriminate against employees who have same-sex partners. Since most people younger than 65 with health insurance in the United States receive it through their own employer or a family member's employer, this form of discrimination creates a huge disadvantage for lesbian and gay people and their families. Employers have resisted attempts to extend benefits to gay employees' same-sex domestic partners, citing the fear of large increases in compensation costs. The very real economic concerns have proven to be less than compelling, as the experience of employers who offer benefits to domestic partners is that surprisingly few employees enroll partners and those partners do not generate high health care expenditures.

Largely at the instigation of gay and lesbian employees, many companies are reforming their compensation practices, and hundreds of employers now provide health care benefits to the domestic partners of gay and lesbian employees. Chapter 4 includes a discussion of the reasons for this profound and rapid shift, which accelerated in the 1990s. An analysis of the provision of health care benefits in their historical and economic context suggests that evolving norms related to compensation fairness, increasing labor market competition for workers, and gay employee organizations were major factors in employers' policy changes.

Gay Consumerism

The wooing of the gay consumer dollar, described in chapter 5, appears to be on a similar acceleration path as the extension of health care benefits.

Corporate interest in attracting gay customers has increased dramatically. Companies place ads in gay magazines, include gay characters in mainstream media ads, and customize their products for gay people's needs. A look back through gay economic history suggests that while the high level of attention to the gay market is new, a gay market has been around for a long time. The newest wave of attention to this market appears to represent the combination of several trends, including the continued loosening of legal restrictions on gay people and their activities, the heightened visibility of gay people as a result of the AIDS epidemic, the conscious "desexualization" of gay people by AIDS activists, the development of a cadre of knowledgeable gay marketers, and increased competitive pressure on U.S. corporations.

Much of the hype about the "gay marketing moment," as some have called it, centers on three of the four myths (the DINK, affluence, and conspicuous consumption myths), raising questions about the long-term prospects of the interest in the gay market. Chapter 5 recalls the findings contradicting the myth of affluence, and data on family income bolster that earlier conclusion. In some surveys, only gay men are significantly less likely than heterosexual people to have children in their home, suggesting that gay male couples might fit the DINK mythical image of two incomes. But the image of the gay conspicuous consumer is built on a myth that gay consumers are fundamentally different in their product interests, as well, an assumption with little strong supporting evidence as yet.

Overall, the gay market attention brings some benefits for the gay community since it attracts financial support to some crucial media and organizational institutions. But it also comes with some potential drawbacks, if increased competition for the gay market damages or destroys existing gay businesses. More ominously, political rhetoric suggests that the hedonistic consumer image leads to a distancing of the gay community from the larger U.S. populace.

Lesbian and Gay Family Economics

One positive side effect of the efforts to convince employers to recognize lesbian and gay employees' domestic partners--and perhaps even of the interest in gay consumer households--is the increased visibility of gay families, the topic of chapter 6. While the labor market and consumer marketplace are clearly sites of economic activity, the family often seems like a purely social or cultural structure. Economists see important production, consumption, and investment activities taking place within families and households, however. Purchases of many goods, such as houses, cars, and food, are often made for the general use of families rather than for only one individual. Further production of raw ingredients brought home from the grocery store is needed to make a meal for family members. And reproduction obviously plays an important part in creating the labor force of the next generation.

What might be less obvious is the economic reasoning behind family-related decisions. Getting married and having children could be the result of a kind of cost-benefit decision, for example. Much of chapter 6 focuses on how families combine the money and time from household members to produce goods and services, a complex decision subject to many influences. Married couples often divide family work in a simple way: the husband goes into the paid labor force and the wife stays at home raising kids and doing the housework. This particular division of labor could be an efficient allocation of each person's time to his or her most productive role. Or perhaps the traditional division of labor in married couples is the result of social norms about the proper family duties for men and women and has little to do with economic efficiency. Public policies also influence decisions about division of household labor by altering the costs or benefits of marriage and specialization.

In thinking about gay and lesbian families, similar sorts of questions arise--often in a public policy context--about why they form and dissolve, why they do or do not include children, and how they share or divide up work responsibilities. Anthropologists like Kath Weston and sociologists like Philip Blumstein and Pepper Schwartz have explored in detail some of the ways that lesbians' and gay men's families are structured, both in more traditional couples and in larger familial networks. Economists, though, have given little thought either to the similarities or the differences between gay and heterosexual families, even though comparisons could have potentially useful implications for understanding how and why all families are organized the way they are.

Differences in the relevance of gender norms and of access to legal and social institutions, most notably the inability to legally marry, could result in important differences among family types in their economic welfare and their economic decisions. So in addition to a more conceptual analysis, chapter 6 offers a glimpse into the economic realities of gay men's and lesbians' families based on both qualitative and quantitative studies. Overall, the picture that emerges is not one of gay people unencumbered by family responsibilities and possessing high discretionary incomes to spend on themselves. A more complete view of gay family life includes raising children and developing committed adult partnerships to create an economic family unit no less influential in the economic lives of individual gay people than are marriages for heterosexual people. In addition, the many ways that gay, lesbian, and bisexual people organize their family lives may provide helpful models to heterosexuals who increasingly face the kind of uncertainty and stress in providing for their families that gay people have long lived with.

Implications for Policy Changes and Economic Strategies

The next five chapters show that similar influences shape gay and lesbian people's positions as consumers, workers, and family members. Market forces, the competitive pressures on firms created by their unending search for profit-making opportunities, appear to have been as least partly responsible for the increased visibility of gay and lesbian consumers, and competitive pressures in hiring skilled workers appear to have promoted the advancement of domestic partner benefits. Changes in social norms related to gender roles and sexual behavior have made employers, voters, and policymakers more willing to enact progressive and inclusive policies. Collective action by gay, lesbian, and bisexual people has hastened other forces of change, pushing back repressive policies and promoting progressive ones. As a result, the legacy of public policies that limited gay people's economic position has been eroded.

Despite the progress that has occurred, public policy continues to limit gay people's attainment of economic equality. Workplace discrimination puts lesbians and gay men at an economic disadvantage, a disadvantage that can be measured in dollars and cents as well as in psychological terms. The lack of access to the legal institutions that support family life, particularly legal marriage, also adds to gay people's economic burden. They must often pay hundreds or even thousands of dollars to lawyers to simulate (imperfectly) what two heterosexual people and a ten-dollar marriage license can achieve overnight: a legally recognized family relationship. That legal relationship also comes with a host of monetary benefits that help heterosexual families raise children, plan for retirement, receive health care, and weather financial crises, among other things.

Gay people have responded to these economic stresses by organizing through the traditional political process, arguing for changes in public policy that would require nondiscrimination against gay individuals and their families. Chapters 7 and 8 shift my use of economic analysis to document and analyze inequality for gay people toward making recommendations about whether and how to create policies of equality. Political efforts to change policies have so far used economic analysis to a very limited degree.


Excerpted from Money, Myths, and Change: the Economic Lives of Lesbians and Gay Men by Mary Virginia Lee Badgett Copyright © 2001 by Mary Virginia Lee Badgett. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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Table of Contents

List of Tables
1. Introduction: Meeting the Myths
2. The Economic Penalty for Being Gay
3. Costs of the Closet
4. Compensation Discrimination Revisited: Benefits
5. Queer Conspicuous Consumption
6. A Family Resemblance
7. Reducing Inequities, Part 1: Public Policy and the Workplace
8. Reducing Inequities, Part 2: Family Policies
9. Economic Strategies for Social Change
10. Prospects for the Future
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