Homophobia costs countries $100 billion a year, economist argues

Ugandan activists march during London’s Pride Parade, June 2016 (Credit: Chris Beckett).

Gay, lesbian, transgender and other people who represent gender or sexual diversities face enormous stigma in their communities, by one estimate undermining the potential economic contribution these people could be making worldwide by $100 billion annually.

This figure, calculated by lead UNAIDS researcher and health economist Erik Lamontagne, is at best a conservative estimate because data on some groups is limited.

With available statistics, Lamontagne drew a connection between GDP and exclusion of the LGBT community, which refers to lesbian, gay, bisexual and transgender but has come to refer broadly to anyone representing alternative gender or sexual identities. Lamontagne’s research found that countries with the most draconian laws and the highest levels of social discrimination lose out the most in economic terms.

“More than the cost itself, it’s the share of the cost of homophobia that is high. The cost, as a share of the GDP, is disproportionately higher in more homophobic settings,” Lamontagne told Humanosphere, pointing to countries in the Middle East and North Africa that he said has some of the most anti-LGBT laws in the world.

To measure this, Lamontage designed a tool to quantify how discriminatory laws and social exclusion affect growth, which he called the Homophobia Climate Index.

Countries that have comparatively more stringent laws against the LGBT community tend to lose a larger proportional share of their GDP – just under 1 percent per year – than those with friendlier LGBT climates; those losing the largest share of economic output due to anti-LGBTI laws include Togo, Papua Guinea, Iraq and Morocco, among others.

Countries with a greater level of homophobic policies suffer more. (Credit: Erik Lamontagne)

Countries with a greater level of homophobic policies suffer more. (Credit: Erik Lamontagne)

“The cost of homophobia is higher in more homophobic settings; the more you try to control people’s sexual orientation, the higher the economic cost,” Lamontagne said in an interview.

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But even countries with more tolerant policies are failing to integrate the LGBT community into equal employment. Homophobic laws cost North America and Europe around $50 billion of GDP, according to Lamontagne’s research. A study by the William Institute in 2014 showed that 2.2 million LGBT adults in the U.S. – just under a third of the total gay and bisexual population – struggled to put food on the table.

Similarly a study last year found that LGBT women were 30 percent less likely to get a call-back from potential employers after job interviews; employment laws in 28 states still discriminate against LGBT people in the workplace.

According to Lamontagne’s research, factors such as discriminatory hiring practices, unequal pay, lower educational attainment and shorter life expectancies mean that LGBT people are earning far less in potential income as a result; this means that less money is going toward a country’s overall GDP.

Shorter life expectancy among LGBT people is caused by higher tobacco consumption, higher suicide rates and violent hate crimes. Even among states, life expectancy varies drastically according to how tolerant laws are.

“These three factors can make a difference of up to 11 years in the United States between the most homophobic areas and more tolerant parts in the rest of the county; it’s huge,” Lamontagne said

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There have been notable LGBT rights gains across the world over the last few years, allowing gay and bisexual men and women to fully realize their rights and enter the workforce; the vast majority of these have not been in the Middle East and in Africa, however.

Building on the successes of the last decade in integrating LGBT people into society and into the workforce, Lamontagne remains cautiously optimistic that his research will help decision makers understand the need for LGBT-friendly policies.

“As a general trend, things were improving for the last decade. But we must acknowledge that hardly won gains – in terms of inclusion and tolerance – can be reversed by misled political decisions,” he said. ‘We trust decision makers will be keen in continuing the progresses achieved so far.”

Other activists, including Peter Tatchell, founder of the Peter Tatchell Foundation, which advocates for LGBT rights, believe that economic arguments, as well as political pressure, can persuade policymakers.

“For those governments that are impervious to the human rights case to end the persecution of LGBT people, some of them might be more receptive to the economic arguments – that decriminalizing same-sex relations makes economic good sense,” Tatchell told Humanosphere.

Lamontagne agreed with Tatchell’s assertion.

“The economic arguments are meant to complete and reinforce the human rights argument,” Lamontagne said. “This is one of the reasons why UNAIDS is supporting this work; we have a zero tolerance target for stigma and discrimination, and human rights is at the heart of our interventions.”

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Charlie Ensor

Charlie Ensor is a Nairobi-based freelance journalist, focusing on refugee rights, development and humanitarian crises in East Africa. His work has also featured on the Guardian and WhyDev; he also writes his own blog on development and aid issues. Charlie tweets @charlieensor, and you can contact him at charlieensor1990@googlemail.com