February is considered to be the ‘LGBT History Month’ and so its aim is to give visibility to the history of the LGBT community, which has often been ignored by mainstream society. The amount of economic research that could give an insight on the conditions of queer people in history has been scarce in the beginnings, since most investigations have been carried out in the past few years. Besides addressing the issues of a potential wealth gap or wage discrimination, economics can also raise awareness on LGBT discrimination in our everyday life.
Could we draw any conclusions on LGBT discrimination by running an elementary econometric model which could potentially analyse a gap in the relationship between the set of skills of contestants in different reality shows – LGBT-themed and non-LGBT – and their corresponding social media presence? Let’s analyse the multiple necessary skills to be an influencer and the number of Instagram followers between the cast of RuPaul Drag’s Race and the participants of another reality show with no queer visibility in the same streaming service, for example, the show Too Hot To Handle which became popular last April. Drag Queens, compared to the cast from Too Hot To Handle, are required to have at least some advanced skills in sewing, dancing, makeup art, acting and singing plus all of the necessary communication skills to make it funny and engaging. On the other hand, the contestants of Too Hot To Handle were required to follow the Aristotelian morality, apparently still inherent in Western culture, in which they had to repress their human passions and instincts by not having sexual relationships until a meaningful relationship was made with another person.
Running up some calculations the average increase of followers for every contestant in the latest season of RuPaul Drag’s Race is 249.7K while for the cast of Too Hot To Handle was 468.6K ten months ago, when the reality show was aired. These numbers are helpless unless we add a more serious amount of data and other required variables. Nonetheless, even though we cannot draw any serious conclusions, this example is insightful in two different ways. Firstly, it can be proved to a wider audience the scope that quantitative research – often used as a tool by economists – has to address any amount of social issues that our imagination can think of. And secondly if it seems that, in this case, it is required for drag queens to have a higher set of skills to gain an additional follower in social media, we can start now to ask ourselves to what extent we can find this discriminatory pattern in traditional labour markets also.
Do LGBT people need a higher set of skills to earn an additional pound? And to even get access to a job? Have living standards increased at the same rate for LGBT individuals than for the rest of the people throughout history? Economics can help us to give a response to this set of questions but more specifically, Gary S. Becker developed a model to explain labour discrimination for black employees in the US that is helpful to explain these potential discriminatory patterns for the queer community in labour markets.
Gary Becker’s taste-based model is useful to explain the reason behind wage discrimination. In this case, homophobia, biphobia, or transphobia is added up to the wage rate as the discrimination coefficient which represents a disutility for employers. Looking for a utility-maximisation production outcome, if the wage rate of LGBT workers – including the discrimination coefficient – is higher than the wage rate of gender-normative individuals, the amount of hired gender-normative workers is higher. In a state of a discriminatory labour market, LGBT workers will have to overcome these patterns by either being more productive at a given wage or, consistently, accepting a lower wage rate for the same productivity level.
This case can easily be found in reality as recent reports show that there is a significant proportion of employees that suffer from emotional distress and mental health issues due to discrimination in the workplace. In this case, LGBT employees are required cope with this type of discrimination while keeping the mandatory level of productivity which entails a higher effort. Additionally, for countries that do not cover a public mental healthcare programme, discrimination within the workplace implies a costly condition for the queer community which may result in a lower real disposable income since acquiring some sort of psychological help to overcome discrimination becomes necessary in order to keep a good mental health condition. It is also worth noting that this kind of discrimination affects women in a deeper extent since research shows poverty rates could drop dramatically for all couple types that include at least one woman.
Now, what happens if the wage rate from LGBT workers is lower than the wage rate of gender-normative workers? In this case firms will, analogically hire more LGBT employees. This is also very likely to happen, a situation that yields a segregated workforce which, according to Becker, is caused by the existence of this discriminatory taste and also, as it would be Pareto-improving for minority workers to work in their own businesses and correspondingly for majority workers, since the cost of distaste would be removed. In this scenario, LGBT employers would hire LGBT workers, and sell to LGBT customers, etc. Though, the fact that gender-conforming individuals may have more complementary nonhuman resources per capita would lead to this type of segregated economy to have lower wages for LGBT workers than the potential wages that a discriminatory – and not segregated – workforce would have for them. This situation would make it more likely for LGBT individuals to work under discriminatory but not segregated conditions, as long as it is allowed for them.
This case of segregated workforce is a clear example of the current situation that transgender individuals face when trying to access the formal labour market. According to a study published by the National Center for Transgender Equality (NCTE), 15% of transgender people face unemployment in the US. It is worth mentioning that this is an abysmal unemployment rate since it is three times higher than the national one. In other countries like the UK, data from the National LGBT Survey Summary Report suggests that 35% of trans women and 43% of trans men did not have a paid job in the 12 months preceding the survey. With such a high unemployment rate for trans individuals, particularly trans women have been segregated into sex labour. Key findings from the ‘Meaningful Work’ report carried out by the NCTE, suggest that 10.8% of the respondents reported having participated in sex work. This rate is specifically high among black respondents whose rate of sex trade participation is 39.9%. The amount of data that shows that transgender individuals face these discriminatory patterns within the labour markets is large, and yet it has not been even mentioned as an economic issue in economics education whatsoever. Even worse, it has not even been approached as an economic issue by policymakers in most governments.
As a final remark, the aim of this article is to prove how, even in countries where LGBT rights are recognised, the community is still in a situation of an economic disadvantage with respect to gender-conforming individuals as they have a higher probability to fall into poverty, especially when it comes to transgender people. Moreover, it is also worth noting how most of the economics curriculums have avoided addressing this issue, resulting in a lack of serious political intent that economics should have as a social science and, as a diverse discipline. In clear terms, the fact that a model in labor economics which was used to analyse the situation of black workers in the US is useful to also examine how LGBT workers face discriminatory conditions in labor markets, and additionally, how economic inequality can strengthen discrimination and segregation in some communities are topics that urgently need to be studied in economics in a major way.
“Darling, I don’t have a job. I’m on welfare. I have no intentions of getting a job as long as this country discriminates against homosexuals.”
(Marsha P. Johnson)
Written by Diego Pablo Sanchez
Bibliography
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Carperter, C., & Gonzales, G. (2020, February 13). Transgender Americans are more likely to be unemployed and poor. The Conversation.
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