Releasing the finding, Bob Witeck said, “Buying power – also known as disposable personal income – is not the same as wealth. It is a practical tool for economists and marketers, in particular, to signal the increasingly visible contributions made to our economy by America’s diverse gay, lesbian, bisexual and/or transgender individuals and households.”
Disposable personal income, according to economists, is the amount of money that individuals have available to spend and save after paying taxes and pension contributions to the government (roughly 86% of income).
Witeck added, “To understand this estimate, it’s important to underscore that there is no evidence that same-sex households or LGBT people are more affluent or, on average, earn more than others. That is a stereotype, long debunked by economists and policy experts.”
“LGBT buying power is an economic marker that helps benchmark America’s diverse lesbian, gay, bisexual and transgender communities,” said Justin Nelson, National Gay & Lesbian Chamber of Commerce (NGLCC) Co-Founder and President. “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. Their commitments to our communities prove our NGLCC philosophy that economic visibility, just like social visibility, is essential in building a diverse and inclusive society.”
Witeck agreed that LGBT workers, businesses and consumers are directly shaping the American economy.
“Today improved laws, greater visibility and welcoming attitudes help address some of the longstanding discriminatory burdens that LGBT people and same-sex couples face,” Witeck said. “Nonetheless, LGBT Americans still confront many forms of legal, economic and social inequities in the absence of federal nondiscrimination laws covering employment, housing, public accommodations, healthcare and other aspects of American society. The barriers confronting transgender people are especially severe and must be challenged.”
In addition, Witeck emphasized that contemporary market behaviors are favorably shaped by millennials who appear to be the most LGBT-inclusive generation yet.
“I call this the PFLAG effect – which helps explain the familiar and loyal experiences of younger non-LGBT people toward their LGBT friends, family members and co-workers,” Witeck said. “Brands today recognize a growing proportion of younger consumers whose attitudes and buying behaviors are directly shaped by LGBT-friendly policies, campaigns and messages.”
For example, in August 2014, according to a Google Consumer Survey, over 45% of all consumers under the age of 34 say they’re more likely to do repeat business with an LGBT-friendly company. A majority of these consumers – more than 54% – also say they would choose an equality-focused brand over a competitor. Keep in mind also that nearly ¾ of millennials support marriage equality, according to Pew Research.
Based on an acceptable range of LGBT population estimates, aided by evaluating more than a hundred online population samples conducted by the expert Harris Poll over more than a decade, the 2015 estimate reflects roughly 6 to 7% of the adult U.S. population as willing to self-identify as lesbian, gay, bisexual and/or transgender (or 16 million-plus adults 18 years of age and older).
Witeck acknowledged that social science approaches tend to assume slightly lower population targets. Nonetheless, demographers also confirm that significant proportions of the LGBT population, particularly bisexual and transgender individuals, still remain resistant to traditional sampling and reporting methods. Fortunately, newer and credible surveys reveal that younger generations are beginning to self-report their sexual orientation and gender identity in higher numbers than earlier.*
*Note: In 2015, the Public Religion Research Institute (PRRI) released its findings on the sexual attitudes of millennials, revealing that 7% of millennials identify either as lesbian, gay, bisexual or transgender – based on a survey of more than 2,000 U.S. adults between the ages of 18 and 35.
The general approach used for estimating buying power mirrors the steps applied by the Selig Center for Economic Growth at the University of Georgia in its calculation of the purchasing power of other diverse populations, such as Hispanics, Asian Americans and African Americans. This methodology uses aggregate disposable income data that are compiled by the Bureau of Economic Analysis (BEA) of the U.S. Department of Commerce and are therefore considered the most authoritative measure of purchasing power in the United States. LGBT purchasing power is understood by estimating the proportion of total disposable personal income (DPI) to the population range of LGBT-self identified adults.
Since 1993, Witeck has provided expert knowledge, trend analysis and communications counsel to Fortune 500 companies on their strategies to understand and reach LGBT households and families.