Are LGBTs Better Off Financially?
Lack of rights may foster frugality
As the U.S. continues to rack up more than $1 trillion of new debt every year, there's one group that's reportedly handling their finances more favorably. According to a survey by Prudential, members of the gay community manage their money better than the average American.
Prudential's poll results show that lesbian, gay, bisexual and transgender people earn significantly more in income, owe less in debt, have more in household savings, and are more efficiently prepared for retirement than their heterosexual counterparts.
Michele Meyer-Shipp, chief diversity officer at Prudential, cites a number of factors, one being that many members of the LGBT community tend to feel uncertain about the future of gay rights, thus they become more prudent with their paychecks.
Susan Stryker, professor of gender & women's studies at the University of Arizona, agrees. "LGBT people are often excluded from family support both emotionally and financially," she said. "So they sometimes have to develop the capacity to fend for themselves and be very self-reliant. Because they've historically been less likely to have a marriage, there has been less likelihood of getting survivors benefits or pensions in old age, and less likelihood of having children, and thus the need to plan to take care of oneself."
Still, Stryker is wary of who Prudential counted as participants because, to her knowledge, "trans[gender] people suffer far higher rates of unemployment and underemployment than other Americans, and lesbian women make less money than men."
Equally unsure of Prudential's findings is Marianne LaFrance, professor of psychology, and of women's, gender, and sexuality studies at Yale University.
Citing a 2011 report from the Harvard Business Review—in which it was discovered that 42 percent of closeted employees felt isolated at work, and 52 percent believed their careers had stalled—LaFrance said, "The substantial literature I'm familiar with continues to show employment discrimination against people who are 'out.' They report feeling more likely to be fired or sidelined in their careers."
Additionally, LaFrance calls attention to a Gallup poll that declared that Americans who identify as LGBT tend to, in fact, have lower levels of education and income.
"Whether it's from 'Will & Grace' or 'Modern Family,' there's a very positive representation that suggests upper-income stereotypes, but really there are a lot of gays and lesbians at the lower level of income distribution," said LaFrance. "Many leave home because it's no more of a safe place, so they're often on the streets worried about where their next bed or meal is coming from—not retirement. And gay people tend to settle for lower career aspirations just to be able to be in work environments that are non-hostile; some of those law firms or accounting firms are decidedly not well-supportive of an alternative lifestyle."
Openly gay Washington Post writer Jonathan Capehart called reports of gays' superior financial success an outright "myth."
Still, Prudential's results found the LGBT community making an annual income of $61,500 (compared with the national median of $50,054), carrying about $4,000 less in debt than their heterosexual counterparts, having $6,000 more in household savings, and holding an unemployment rate of only 7 percent (versus the national rate of 7.9 percent).
Dr. Fran Walfish, a leading family psychotherapist, says circumstance more likely plays a role in the study's findings than anything else.
"One of the primary contributing factors to gays managing their money better than the average American is because in so many cases the gay relationship does not last forever," said Walfish. "These folks understand that they are truly solo in the world of financial independence. The fear drives them. The other factor is that gays are less often parents, although that statistic is rising. Their responsibility to financially support, plan ahead, and take out loans [for children] is less than the average American."