Projected at $743 Billio
The total buying power of the U.S. LGBT population in 2010 is projected to be $743 billion, according to the recently updated analysis by Witeck-Combs Communications and Packaged Facts.
The estimate was originally derived in a joint study by both organizations, entitled “The Gay and Lesbian Market in the U.S.: Trends and Opportunities in the LGBT Community, 6th Edition.” In 2009, the gay buying power projection was $732 billion.
This 2010 projection is slightly less than earlier analyses—given that the entire U.S. economy has suffered its worst recession since the Great Depression began in 1929.
In sharing the latest analysis, Bob Witeck, CEO of Witeck-Combs Communications, says: “Buying power projections are frequently a standard business measure for companies and policy decision-makers. This offers us a reasonable snapshot of the projected annual economic activity of America’s diverse LGBT population even in this faltering economy.”
Witeck states that “buying power is not the same as affluence or wealth. No one should infer that same-sex households are more affluent than others—this is little more than a stereotype, considering the economic evidence available. We have seen data from academic researchers that strongly suggest gay men may earn slightly less than their heterosexual counterparts.”
He adds: “The best available census data on same-sex couples supports the understanding, however, that LGBT households tend to skew in major metro and suburban areas—a characteristic generally associated with higher than average income. And while parenting trends grow, we also see evidence through census snapshots that same-sex couples remain less likely than their married heterosexual counterparts to have kids, and they are more likely to have both partners in the workforce, factors which yield slightly higher per-capita household income, especially in the case of gay male couples.”
Nonetheless, Witeck concludes, “We also are well aware that under existing laws and norms, same-sex couples are penalized throughout the economy by discriminatory tax burdens, a hodge-podge of inadequate relationship rights and obligations, complex and costly barriers to adoption and parenting, and barriers to access to public safety-net programs that are routinely available to married couples and their families.”
Dan Pye, vice president of Morgan Stanley Smith Barney, is quick to agree with the premise of the report. “Despite the onerous tax situation, as well as the unfavorable wealth transfer situation we find ourselves in, the LGBT community does have more disposable income,” says Pye.
Unlike estimates of buying power for other populations, such as African-Americans or Hispanics, the projected LGBT population is estimated only among adults over the age of 18 when they are more likely to be fully aware and able to define their sexual orientation or gender identity.
“Buying power, we know, signals one critical measure of the growth and size of the vital LGBT consumer market,” says Don Montuori with MarketResearch.com. “In our analysis, we are clear to define buying power as another term for ‘disposable personal income,’ which is the total after-tax income available to an individual to spend on personal consumption, personal interest-payments or savings. According to economists, today this roughly equals 86 percent of income.”
Pye adds, “Because of the current state of marriage law, we lack the natural benefits that accrue to married couples.” He tells SFGN that it is important for members of our community to work together with a professional advisor who better understands the unique situations we face.