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Exploring Pay Gaps by Sexual Orientation and Gender Identity

5 Minutes read
March 14, 2024
by Alyssa Schneebaum
In the ongoing discussion around workplace equality, the gender pay gap is a key focal point. Comparing the wages of men and women is crucially important – but it is not the whole story.

Disparities in pay extend beyond the binary framework of gender, which sees people as either in the category of “man” or “woman.” There are gender pay gaps by gender identity, as well as by sexual orientation. Sexual orientation and gender identity (SOGI) as important characteristics in labor market outcomes are receiving more attention.

SOGI minorities – that is, people in the LGBTQ+ community and people whose gender identity does not match the one they were assigned at birth – often face compounded discrimination and marginalization in the workplace and other areas of life. The standard “gender pay gap” hardly begins to understand more complex gender and identity issues. Consider a trans* woman, who has a completely different experience bargaining for her wage than a cis woman. Similarly, a non-binary person faces very different challenges getting a new job than a gay man. Adding in other identity characteristics, such as race, religion, and country of origin, shows how deeply different parts of identity matter in determining economic outcomes.

Research on the SOGI minority population shows that indeed, not all women have the same experience at work. There are significant gaps in poverty rates by sexual orientation, which are driven by differences in income. Gender identity minorities experience significant disparities in pay compared to their cisgender colleagues. As the graph below shows, gay men earn less than similar straight men, and lesbians earn more than otherwise similar straight women. Further studies reveal that LGBTQ+ individuals are more likely to experience workplace discrimination, harassment, and disparities in hiring and promotion, all of which contribute to lower wages, fewer career opportunities and little workplace security.

In the fight for diminishing SOGI pay gaps, advocacy and policy reform are proving to be critical. Ensuring gender equality in which all forms of gender identity are taken into account demands the expansion of anti-discrimination laws, strengthening of workplace protections, and the promotion of diversity and inclusion initiatives as important next steps. SOGI-specific gaps in the workplace go beyond “what bathroom to use,” to issues such as gender affirming health care benefits and parental leave rights for everyone, and truly equitable policy will need to, too.

Last but not least, allies play a crucial role in amplifying the voices of LGBTQ+ individuals; challenging discriminatory practices, employers, and colleagues; and advocating for systemic change. Solidarity with the queer, trans and nonbinary community contributes to a more inclusive and equitable workplace for all.

Grpah of pay gap by sexual orientation and gender identity
Source: Badgett, Carpenter, and Sansone (2021)

Weiterführende Literatur:

Badgett, M.V. Lee, Christopher S. Carpenter, and Dario Sansone. 2021. "LGBTQ economics." Journal of Economic Perspectives 35(2): 141-170.

Schneebaum, Alyssa, and M.V. Lee Badgett. 2019. "Poverty in US lesbian and gay couple households." Feminist Economics 25(1): 1-30.

Shannon, Matthew. 2022. "The labour market outcomes of transgender individuals." Labour Economics 77: 102006.