A new study has concluded that the spending power of the LGBT market in the US is worth an estimated $884billion (€790billion).
The figures have been released by Witeck Communications – a communications firm that has been monitoring the spending power of the LGBT market in the US over the past two decades.
Its estimate, which represents spending power in 2014, shows an increase of $54billion on the 2013 figure of $830billion.
In a statement, Witeck Communication – which works in partnership with Harris Interactive and MarketResearch.com – said that it reached the figure by basing its figures on 6-7% of the US population identifying as lesbian, gay, bisexual or transgender (approximately 16million+ adults of 18 years or older).
The number represent that market’s buying power; the disposable personal income that LGBT people have after paying tax and government pension contributions.
‘Buying power estimates help paint one snapshot of the overlooked economic contributions made by America’s diverse gay, lesbian, bisexual and transgender households in our dynamic economy,’ said Bob Witeck (pictured), President of Witeck Communications, in a statement.
Witeck says that he calculates his estimate by using national aggregate disposable income data; a similar approach as the one adopted by the Selig Center for Economic Growth at the University of Georgia in its research into the buying power of Hispanic, Asian American and African American communities.
However, although the figure sounds impressive, he cautioned against it being used to illustrate any assumptions about LGBT people being wealthier than their heterosexual counterparts.
‘Buying power is not the same as wealth. In fact, there is no evidence that same-sex households or LGBT people are more affluent or, on average, earn more than others.
‘Economists confirm that is a stereotype, as academic research strongly suggests that gay men appear likely to earn slightly less than their heterosexual counterparts, for instance and that LGBT populations of color particularly face many job and earnings barriers.’
As for the significant rise in LGBT buying power compared to last year, Witeck suggested that advances in equal rights and inclusivity was helping to combat discrimination – helping LGBTI people on a number of fronts.
For example, increased workplace protection, such as the recent protections extended to LGBT federal workers, mean that gay people are less likely to be fired from their job – raising average spending power over time.
However, Witeck – who has worked for 25 years as an LGBT marketing strategist and business adviser – was again cautionary and said much work remains to be done.
‘The accelerating movement towards marriage equality, the rising tide of public opinion, and changing federal and state laws help address some of the longstanding discriminatory burdens that LGBT people and same-sex couples face today.
‘On the other hand, LGBT Americans and our allies still must address critical non-discrimination safeguards under law, repair costly tax inequities, put right a complex set of inadequate relationship and parental rights, and dismantle barriers to public safety net programs that other married couples and their families today enjoy.’
Speaking to Gay Star Business, Witeck said that the expected SCOTUS ruling on same-sex marriage was likely to boost spending power further.
‘Economic clout matters, and LGBT people make a difference. But after marriage equality comes, what will make all the difference in the world is the visibility of married couples with their families who will change minds and open possibilities.
‘We won’t have full civil equality, but marriage is a powerful bedrock to get there.’
The figures were welcomed by the National Gay and Lesbian Chamber of Commerce. It’s co-founder and President, Justin Nelson, said, ‘LGBT buying power is an economic marker that helps benchmark America’s diverse lesbian, gay, bisexual and transgender community.
‘At NGLCC, we have more than 150 corporate partners that understand not only the value of the LGBT dollar, but the economics of inclusivity and loyalty.’
Andrew Barratt, of Ogilvy Pride – a new division of global communications agency Ogilvy tasked with promoting the LGBTI market – also welcomed the research.
‘This increased figure is further evidence that the inclusion of LGBT people in content marketing – in order to harness the communities considerable consumer spending power – is good business and good for sales,’ he told Gay Star Business.
Todd Evans, CEO of Rivendell Media, said the estimate was helpful but, if anthing, erred on the cautious side.
‘The research behind the $884 Billon in spending power for the LGBT community is quite sound and if anything is conservative, as I have studied it over the years.
‘It is an important business tool to help Corporate America in making a sound business decisions to pursue the LGBT marketplace.’
Demonstrating that corporate America has truly woken up to the spending power of the LGBTI market, in the run up to Pride season this year, many organizations have made a point of proclaiming their LGBTI-friendly credentials, including the likes of Uber, adidas, Google, Target and American Airlines.