Spotlight Exclusives

The Unfair Price Paid by LGBT Americans: Increased Economic Insecurity, Higher Rates of Poverty

commentary commentary, posted on

Contrary to common stereotypes, lesbian, gay, bisexual, and transgender (LGBT) Americans are more likely to be poor than non-LGBT Americans. Children raised by same-sex parents are almost twice as likely to live in poverty as children raised by married opposite-sex parents, and 15 percent of transgender workers have incomes of less than $10,000 per year; among the general population the comparable figure is just 4 percent.

The challenges are stark. As outlined in our recently released report, three legal failures create economic disadvantages for LGBT Americans: legal discrimination against LGBT people, a lack of legal recognition of LGBT families, and policies that create barriers to a safe and affordable education for LGBT youth. And while the causes of higher poverty among LGBT people are complex, policy reforms at the local, state, and federal levels can play a key role in reducing economic hardships for this vulnerable population.

Legal Discrimination. The federal government and most states do not provide explicit legal protections for LGBT people in employment, housing, the provision of services, or the extension of credit. In 29 states, for example, an employer can legally fire a worker just because that worker is gay, while 32 states lack laws protecting transgender workers. The effects of anti-LGBT discrimination in the workplace are far-reaching. A recent national survey found that almost one in three (29 percent) transgender people has lost a job due to bias. Similarly, researchers have shown that LGBT individuals and families regularly face an array of unique challenges finding housing and applying for loans. Despite 40 years of advocacy, the federal government has still failed to enact legislation to address these problems.

Lack of Family Recognition. While the U.S. Supreme Court made history last year by requiring the federal government to recognize same-sex couples who legally marry, 31 states ban same-sex couples from marriage. Furthermore, the majority of states lack laws that allow two same-sex parents to both become legal parents of a child. This lack of family recognition for LGBT Americans prevents them from accessing many of the benefits and services others take for granted.  

For instance, an employer can extend health benefits to married opposite-sex couples but deny such benefits to unmarried same-sex couples, forcing LGBT workers to either go without family insurance or pay thousands of dollars out of pocket. And when an LGBT worker dies or becomes disabled, his or her same-sex partner and his or her children if they are not legally recognized as such will be denied Social Security disability and survivor benefits. A surviving family (partner and two non-legally-recognized children) of a worker earning $40,000 could lose as much as $29,520 annually in benefits, compared to the family of a non-LGBT worker.

Same-sex couples who are denied marriage are also denied certain tax benefits and full access to important safety net programs such as Medicaid and Temporary Assistance for Needy Families. If an LGBT worker earns $60,000 a year and lives with a partner who has no income, the inability to file jointly costs the couple $2,902 in additional taxes. And LGBT parents who cannot create legal ties to their children also generally cannot claim important child-related deductions and credits. Similarly, as outlined in our 2013 reportAll Children Matter, LGBT families treated legally as strangers are not accurately counted for the purposes of calculating most benefits in family safety-net programs.

Educational Barriers. Unsafe schools make it more difficult for LGBT people to obtain the education needed to compete for good jobs with decent wages and benefits. Rates of bullying and harassment in schools for LGBT youth are shockingly high. This takes an enormous psychological tollbut the toll is financial as well. Students who feel unsafe at school receive worse grades and are less likely to go on to attend college.

Anti-LGBT laws do the most harm to the most vulnerable in the LGBT community, including those in poverty, families with children, older adults, and people of color. While families with means might be able to withstand the costs of extra taxation or the unfair denial of Social Security survivor benefits, these financial penalties can mean the difference between getting by and destitution for an already-struggling family. Poor LGBT families lack the means to minimize the harms caused by anti-gay lawsfor example, by hiring a lawyer to create wills, guardianship agreements, and powers of attorney.

Elevated poverty rates within the LGBT community are a national problem that requires a strong response. This includes instituting adequate nondiscrimination protections, facilitating access to marriage and marriage-related benefits, implementing state parenting laws that allow LGBT parents to form legal ties with the children they are raising, and addressing unsafe schools.

Like others, LGBT people work hard, pay their taxes, and often struggle to provide for themselves and their families. It is not too much to ask that LGBT people be treated fairly under laws that can have a profound effect on their economic security. In fact, in a country founded on equality of opportunity for all, asking for fair treatment is not enough. It is time to change our laws so that LGBT people are no longer financially penalized simply because of who they are or whom they love. 

To print a PDF version of this document, click here.

Ineke Mushovic is executive director of the Movement Advancement Project.

The views expressed in this commentary are those of the author or authors alone, and not those of Spotlight. Spotlight is a non-partisan initiative, and Spotlight۪s commentary section includes diverse perspectives on poverty. If you have a question about a commentary, please don۪t hesitate to contact us at

If you wish to submit for consideration a commentary to Spotlight, please visit our commentary guidelines and submission page.

« Back to Spotlight Exclusives