Association for Public Policy Analysis & Management

A growing body of research suggests that lesbian, gay, bisexual, and transgender (LGBT) people are more likely to be poor than are heterosexual people with the same characteristics in the United States. These studies show that lesbian and bisexual women are especially vulnerable to poverty, as are LGB people of color.  This paper explores the potential contribution of different public policies for (1) reducing the poverty rate of LGB people and (2) closing the poverty gap with heterosexual people. 

We use data on same-sex couples in the 2012 American Community Survey to conduct simulations for four hypothetical policy interventions:  increasing the minimum wage to $10.10 per hour, enhanced efforts to close the gender wage gap, enhanced efforts to close the racial wage, and policies related to sexual orientation wage gaps.  For the minimum wage simulation, we calculate poverty rates before and after raising estimated hourly wages for workers currently earning less than $10.10 per hour.  For the wage gap simulations, we first run wage models for the higher-paid group using age, education, region of residence, metropolitan city size, working full versus part-time, and presence of children as independent variables.  Next, we plug in the characteristics of the lower-wage group to estimate their earnings if they were to get the same returns to those characteristics as the higher-paid group.  Then we compare poverty rates for the actual wages and for the simulated wages.

Preliminary findings show that an increase in the minimum wage would reduce the poverty of same-sex couples by 25-30% but would only slightly reduce the poverty gap with married same-sex couples (whose poverty rates also fall).  Closing the gender wage gap reduces poverty for lesbian couples by 15% and would close the poverty gap with different-sex married couples. Eliminating racial wage gaps would reduce poverty among people of color who are in same-sex couples, a group that is especially vulnerable to poverty. Poverty would fall by 40% for African Americans in same-sex couples and would be cut in half for Hispanics in same-sex couples.