2014Cambridge Conference Business & EconomicsISBN : 9780974211428

Sex Sells
How sexual orientation and gender identity impacts business, economies, and politics around the globe.
Jon Austin Gastrock
11/27/2013

Various studies and works have been compiled to review the span of policies surrounding LGBT (Lesbian, Gay, Bisexual, and Transgender) individuals and how these policies impact global economy, as well the ability to conduct business at a corporate level. The study notes that various changes have occurred recently in company policies which not only impact the day to day lives of LGBT individuals, but have the power to provide strong advantages to certain companies in hiring situations and conducting general business. In addition to the policies held by companies and corporations, this study will also review the policies from a governmental perspective, and how these policies can impact entire economies and the ability for countries to conduct global business. The policies and concerns addressed range from issues such as the ability to provide domestic partner benefits and bereavement pay for the death of a partner, approval of FMLA benefits related to one’s partner, and services to aid those starting the gender transition process, to more protective items such as laws and policies surrounding workplace bullying, sensitivity training, and non-discrimination policies (at the employer and a governmental level). The subject of sexual orientation and women will be addressed by reviewing how the ability to maneuver in a corporate environment is impacted by being a lesbian. Also, certain countries have been taking stronger stances either supporting or opposing rights of LGBT individuals. The opposing stances of these countries range from general disapprovalto policies allowing anyone supporting the LGBT community to be punished by death.

Because of the acceptance of the LGBT community by some countries and the rejection by other countries, the international business community has also been forced to choose with whom they will conduct business. From an individual perspective, the LGBT community has a strong buying power as evidenced by the following statistics:

  • Demographic segment is estimated at 14 million
  • Average household of $61,300
  • Spending power between $400 and $475 billion annually

Additionally, a study conducted in the late 90’s showed that LGBT respondents when compared to their heterosexual counterparts were 11.7 times more likely to hold a professional job, and more likely to own a vacation home, a computer notebook, and individual stocks (King, Stuart, & Barr, 2008). With these statistics in mind, one can conclude that it is in a business’s best interest to market to this particular community. In addition to marketing to the community, corporations are rated on a CEI (Corporate Equality Index) which rates firms based on how they handle gay, lesbian, bisexual, and transgender issues within the workplace. This is an important measure as currently, LGBT workers are not protected from LGBT related workforce discrimination by federal equal employment opportunity laws. These issues do not stop at the subject of workforce discrimination but form a part of the bigger picture that is corporate social responsibility (CSR), which is defined as actions that are intended to further social good which extends above and beyond that which is mandated by law. Analytics are now being reviewed around the association between CSR (Corporate Social Responsibility), CEI (Corporate Equality Index), and the stock market reaction of a firm. Specifically, CEI measures a firm based on whether or not they offer the following items:

1. Has a written nondiscrimination policy covering sexual orientation in its employee handbook or manual;

2. Has a written policy of nondiscrimination regarding a person’s gender identity or sense of being male or female in its employee manual;

3. Offeing health insurance coverage to employees and their same-sex partners;

4.Willing to recognize and/or support a LGBT employee group or has a policy that gives employee groups equal standing regardless of sexual preference or gender identity;

5. Offering of diversity training that includes sexual orientation and/or gender within the company;

6. Appropriate and respectful marketing to the LGBT community and offers supportto LGBT or HIV/AIDS-related organizations;

7. Refuses to participate in corporate actions that would hurt the goal of equal rights for LGBT people.

All of the previous factors are evaluated based on a 1/0 scale; for example, if a companyprovides DPB, that company would receive a one for that component and zero otherwise. Because HRC assigned an equal value to each item, the CEI measure ranges from 0 to 7 points. The CEI score as a basis for how firms manage sexual orientation diversity in the workplace.

At this point, it is important to note that there is a distinct difference between sexual orientation and other forms of diversity. Firstly, a person cannot be directly classified as an LGBT individual or otherwise. In order to be classified as such an individual, one must self-identify as members of the LGBT community. Additionally, sexual orientation is also not covered in Title VII of the Civil Rights Act of 1964. Finally, unlike traditional forms of diversity such as gender or race, a very large portion of society does not recognize LGBT individuals as needing any sort of protection under diversity or civil rights acts. Certain groups even claim that endorsement of LGBT equality is potentially damaging to society as a whole. (Johnston, Malina, 2008)

Most companies and corporationsdo not have the knowledge of which or how many of their employeesare gay or lesbian. One corporation in the Netherlands makes use of a tool to gather data on how LGBT employees experience discriminationat work. Many corporations rely the LGBT networks to pass on the information they gatheron injustices (McDevitt-Pugh 2008).The U.S. Senate passed legislation on November 7, 2013, banning workplace discrimination against gay, lesbian, bisexual and transgender workers (Peterson, 2013). The bill has yet to pass the house. Whether in countrieswhere discrimination against gays and lesbians is unlawful, like the Netherlands,or in countries like the United States, where there are many legallysanctioned forms of discrimination against gays and lesbians, lesbianwomen make a careful decision either to hide their sexuality at work orto be open about it. When a woman chooses to hide her sexuality fromher colleagues, it has, as Claudia Woody (2007) of IBM puts it, a doublecost—the individual “cost of thinking twice,” of constantly being on thealert, and the cost to productivity (hiding who you are from your colleaguesreduces workplace trust, among other things) (McDevitt-Pugh, 2011).

What does all of this mean as far as generating revenue and increasing stock prices? A study was conducted which showedvarious industries (10 in all): advertising and marketing, automotive, chemicals and biotechnology, food, beverages and groceries, forest and paper products, computer and data service, mail and freight delivery, manufacturing, oil and gas, and retail and consumer products. They were classified into a group with a much lower mean CEI scores in each year (mean CEI in 2002 was 45.7; mean CEI in 2003 was 56.7; mean CEI in 2004 was 64.4; mean CEI in 2005 was 70.0). Fifteen industries grouped together and represented industries with significantly higher mean CEI scores in each year—aerospace and defense; airlines; apparel, fashion, textiles, department stores; banking and financial services; computer hardware and office equipment; computer software; entertainment and electronic media; health care; high-tech/photo/science equipment; hotels, resorts and casinos; insurance; pharmaceuticals; publishing and printing; telecommunications; and utilities industries. Their mean CEI in 2002 as 66.4; mean CEI in 2003 was 74.1; mean CEI in 2004 was 75.4; and mean CEI in 2005 is 79.5. The graph below shows the annual change of stock price for industries in both clusters. As shown, industries with higher CEI scores outperformed industries with lower CEI scores in the stock market, except for the year 2004 (Wang, Schwarz, 2010)

Many studieshave been conducted in other parts of the world, especially the United States. A recent review of fifteen studies of sexual orientation discrimination in theUnited States found that between 10-43% of LBGT community reported some type of sexual orientation discrimination. The reported ratesvaried on the individuals surveyed and the studies’ definitions of the word “discrimination.” Complaints received by equalopportunity agencies in the United States, suggest that the rate of sexual orientationdiscrimination complaints per gay person are comparable to the rate of sexdiscrimination complaints filed by women and of race discrimination complaints. Sexual orientation discrimination in the United States and other countries has also been studied in other ways, such asthrough wage analyses and controlled experimentation. Studiesfrom the United States have indicated that lesbian women have reported sexualorientation discrimination at work. But, wage analyses that compared lesbians andstraight women have reported results that are inconsistent. Some of the results showed that lesbians earn slightly more than straight women doing the same job. Results show the opposite when comparing the wagesof gay men andstraight men. Gay men earned less doing the same job as straight men. Information from interviewsand research finds that LGBT minorities try to avoid “coming out” at work so as to avoid discrimination. Even those who choose not to reveal their sexual orientation are still, at times, experiencing discrimination. Some employers will discriminateagainst an individual who he/she believes to be gay, although the individual has never “come out” as to his/her sexual orientation (Lau, Stotzer, 2011)

In post-Soviet Russia, the LGBT community has huge obstacles to overcome in all aspects of Russian life. Although, anyone who is known to be gay can not be arrested for being part of the LGBT community, they are not able to “advertise” the fact that they are, in fact, gay. Any person who is gay or suspected of being so can, legitimately, be discriminated against in all facets of life, including the workforce. The Duma's almost-unanimous vote of approval of the nationwide legislationprohibiting "homosexual propaganda," in February of 2013, became themost discussed piece of legislation in many years. The legislative vote agreed with popularbeliefs; a 2010 poll by Levada center recorded that 38% of Russians thoughthomosexuality was a "bad habit" and 36% of the Russian population thought it was "a sickness or result of a psychological trauma." The majority of Russians do not support thelegalization of same-gender unions. The public’s views towards the LGBTcommunity in Russia is a result of the history of conservatism and traditionalism of the Russian Orthodox church.The attitude of intolerance towards homosexuals is deep and will continue mainstay institutions, the Russian Orthodox Church and the ruling body that maintains its supportfrom the church, go through a radical change. The rejection of the LGBT community was an expected consequence of UR’s traditionalist beliefs. Russia’s sexual minorities, basically viewed as male homosexuality, have weathered State-encouraged abuse, discrimination, and oppression. Russia has continuallysuppressed LGBT internet activity through denials of service, detention, and legal prosecution of LGBT community bloggers.The country is also creating a Russian “white-list,” meant to create a restricted internet that would eliminate any social or political dissension. The State has claimed that “homosexual propaganda” is dangerous for the mental and spiritual wellness of children, and thereby, illegal under the Family Code. The Russian Federation has prohibited LGBT-rights activists from protesting through bureaucratic red tape, turning a blind eye towards hate crimes, and police brutality of and detention of protesters.Although the United Russia party encouragesintolerance of the gay community in Russia, a change in the political climate of Russia would probably not change the attitude between the Russian population and the ever increasingoutspokenness of the minorities. If change and views toward sexual minorities were to happen, they would have to occur at the level of doctrine and Church policy. This, likely, will not happen with the resurgence of the Orthodox Church. The authoritarian foundation, which seeks to unit Russia in its beliefs and standards, has the power to quiet any discussion of or organization for gay rights. Foreigners interested in LGBT rights, such as gay media overseas and international humanitarian organizations, may have the capability to intercede and change the deep disapproval of homosexual rights and culture. (Kavanagh)

Russia is not the only country currently taking a strong stance regarding LGBT rights. In 2009, a bill was introduced into the Ugandan Parliament that not only took a stance against LGBT rights, but criminalized “homosexual conduct” in Uganda. This act can be summarized in the following points:

  • Those having knowledge of homosexual activity must report the activity within 24 hours. Failure to do so will result in a prison sentence.
  • The bill is in addition to the fact that homosexuality is already illegal in Uganda and has been for over 100 years
  • Those engaging in homosexual activity whilst infected with HIV, or those who are repeat offenders can be punished by death.

From the point of view of many cultures, the bill is downright unacceptable for obvious reasons. President Obama has referred to the bill as “odious” while Hillary Clinton has expressed strong concerns to Yoweri Museveni, the president of Uganda. Besides being rather severe, this will also end up causing some extreme economical issues and alienation for Uganda. What kind of backlash could this cause for the country should this bill become law? First, Sweden has threatened to cut off all aid. Second, this bill may be in violation of AGOA (African Growth and Opportunity Act) which provides duty-free imports from certain countries among other forms of aid. AGOA requires that a country remain within compliance of providing certain human rights, and the new bill would be deemed as a “gross violation.” Additionally, since the bill is very vague in the definition of “promoting homosexuality,” this could also potentially hinder HIV/AIDS prevention activity. In summary, this would mean that Uganda would be losing two significant forms of aid due to the decision to put through this bill, and potentially cut off all trade with the United States. This bill, if passed, will cause a large economical issue for Uganda (Ewins, 2011).

Since it has been noted that holding policies and laws that are firmly against LGBT rights can cause economical issues and issues when conducting international business, it should also be noted that nations that hold laws that support the LGBT community can greatly benefit from those laws from not only attracting additional residents, but from attracting tourists as well. Sydney has recently started emerging as the “gay capitol of the South Pacific.” This new growth is closely tied tow the development of the Sydney Gay and Lesbian Mardi Gras, as well as to further diversification of the tourism industry in the Australian Gay and Lesbian community since the early 1990s. This said Mardi Gras began as a simple street parade in 1978 held in the evening in commemoration of the Stonewall Riots in New York City during a time when homosexual acts were considered to be illegal. By the end of that day, at least 53 arrests were made. Through the years, the Mardi Gras has grown into a massive international festival lasting for three weeks that generates an estimated AU$99 million. Currently, the Mardi Gras is Australia’s largest source of tourism. In addition to the direct revenue generated by the event, the Mardi Gras has drawn corporate and government sponsorship who also benefit from the publicity (Markwell, 2002). Although the large Mardi Gras in Australia is certainly one of the largest, if not THE largest

July 1-2, 2014

Cambridge, UK1