Uncovering: the economic benefits of LGBT workplace inclusion

• Author: Darius Longarino
• Position: J.D., Columbia Law School, New York, United States; Senior Fellow, Yale Law School Paul Tsai China Center, New Haven, United States; Co-Manager, Yale?Renmin Project on Equal Employment Rights of LGBTI People, Beijing 100872, China. Contact: darius.longarino@yale.edu
• Pages: 500-532

FRONTIERS OF LAW IN CHINA

VOL. 14 DECEMBER 2019 NO. 4

DOI 10.3868/s050-008-019-0024-5

FOCUS

GENDER AND BUSINESS

UNCOVERING: THE ECONOMIC BENEFITS OF LGBT WORKPLACE INCLUSION

Darius Longarino∗

Abstract Lesbian, gay, bisexual, and transgender (LGBT) people constitute

approximately five percent of the population, but workplace discrimination based on

sexual orientation and gender identity remains troublingly commonplace. This article

summarizes a large and growing body of social science research demonstrating the

economic benefits of LGBT inclusion (and the costs of LGBT exclusion) in the

workplace. It concludes with recommendations for (1) future research, stressing the need

for more China-specific studies, which would inform policymaking and theoretical

understanding of diversity and inclusion practices on business performance, (2)

improving employer LGBT-inclusion policies, and (3) strengthening state protection of

the equal employment rights of LGBT people.

Keywords lesbian, gay, bisexual, and transgender (LGBT), business, gender, equal

employment rights, LGBT inclusion

INTRODUCTION .................................................................................................................... 501

I. LGBT DISCRIMINATION IN CHINESE AND U.S. WORKPLACES................................ 503

II. IMPACT OF DISCRIMINATION ON LGBT PEOPLE’S HEALTH ................................... 506

III. THE ECONOMIC BENEFITS OF LGBT INCLUSION AND THE COSTS OF

EXCLUSION........................................................................................................... 510

A. The Corporate Consensus: LGBT Inclusion Is Good for Business................... 510

B. The Positive Impact of LGBT Inclusion on Business Outcomes........................511

1. Recruitment and Retention ............................................................................511

2. Performance................................................................................................... 513

C. High Consumer Demand for LGBT-Supportive Brands.................................... 518

IV. RECOMMENDATIONS............................................................................................. 519

A. Recommendations for Future Research............................................................. 520

B. Recommendations for Employer Policy and Practice....................................... 525

∗ Darius Longarino, J.D., Columbia Law School, New York, United States; Senior Fellow, Yale Law

School Paul Tsai China Center, New Haven, United States; Co-Manager, Yale–Renmin Project on Equal

Employment Rights of LGBTI People, Beijing 100872, China. Contact: darius.longarino@yale.edu

2019] UNCOVERING 501

C. Recommendations for Law and Government Policy......................................... 528

CONCLUSION........................................................................................................................ 532

INTRODUCTION

In 2017, Charlene LIU submitted an employee benefits application to her new

employer, a large multinational company in Shanghai. What most employees would

consider perfunctory paperwork raised an anxiety-inducing choice for Charlene: Should

she apply for spousal health insurance for her wife, just like her straight colleagues do for

their spouses? Although legally married in the United States, Charlene did not know if her

company or its China-based insurance provider would recognize their relationship — or

worse, if coming out would hurt her career at the company. Overcoming her fear,

Charlene decided to submit the application. After weeks of nervous waiting, two health

insurance cards came in the mail. “It was one of the happiest days of my life,” Charlene

recalled. “It wasn’t just because we got the health insurance. It was because we were

recognized.”1

Charlene’s story illustrates the pressures that lesbian, gay, bisexual, transgender

(LGBT)2 employees face in the workplace. The decisions that cisgender heterosexual

people might make without much consideration — whether to put a picture of their

spouse on their desk, how to answer the question “What did you do this weekend?,”

whether to provide an employer with their diploma — could significantly hurt the career

prospects of an LGBT employee. It could even get them fired.

Fortunately, Charlene’s story has a happy ending, but would it not have been better if

the story had a happy beginning? If her company had clearly communicated its same-sex

partner benefits policy at the outset, Charlene would have been spared the fear of

discrimination. Instead of worrying, she could have spent her energy in more productive

ways. The company could have better recruited talent that valued same-sex partner

benefits or that valued diversity and inclusion more generally. A more diverse workforce

would have been more innovative and would have created more value for the company.

Charlene would have been happier, and the company would have been, too.

A large and increasing number of businesses, inside China and globally, have come to

this same conclusion, that LGBT inclusion is not only good for employees but also good

for businesses.3 A senior economist adviser at the Joint United Nations Programme on

1 Speech by Charlene LIU, on Out and Equal China Roundtable, Shanghai, China (Jun. 14, 2018).

2 This article uses “LGBT,” “LGBTQ” (“Q” meaning “Queer”), or LGBTI (“I” meaning “Intersex”)

depending on the terminology used in the original cited study. Most cited studies use the term “LGBT ”;

therefore, this article uses “LGBT” for consistency.

3 Oliver Cann, Global Businesses Launch Partnership for Global LGBTI Equality, World Economic

Forum, (Jan. 22, 2019), available at https://www.weforum.org/press/2019/01/global-businesses-launch-

partnership-for-global-lgbti-equality/ (last visited Nov. 26, 2019).

502 FRONTIERS OF LAW IN CHINA [Vol. 14: 500

HIV/AIDS (UNAIDS) estimates that LGBT exclusion costs countries US$100 billion a

year globally,4 while a World Bank study estimates that it costs India between 0.1% and

1.4% of its GDP.5 The Williams Institute at UCLA School of Law, concisely distills the

relationship between social stigma and economic loss in a 2018 report, “The evidence on

the ground of ongoing stigma, violence, and discrimination against LGBT people

documents treatment that reduces the ability of LGBT people to contribute to the

economy and that holds back LGBT people from fully participating.”6 Researchers

approximate that there are 70 million LGBT people in China7 and 11 million in the

United States,8 representing approximately 4.5%–5% of the adult population. If a

community — whether it is a business or a country — denies LGBT people equal dignity

and opportunity, they are repressing a wellspring of human potential.

This article presents recent research demonstrating the economic benefits of LGBT

inclusion (and the costs of LGBT exclusion) in the workplace. Part I examines the

discrimination that LGBT people face in the workplace in China and the United States.

Part II describes the phenomenon of LGBT “minority stress” — i.e. how social stigma

negatively affects the mental and physical health of LGBT people, hindering their ability

to participate fully in the workplace. Part III outlines the impact of LGBT

inclusion/exclusion on specific business outcomes including employee recruitment and

retention and on individual, team, and firm performance. The effects of

organizational-level policies (e.g. corporate same-sex partner benefits) and structural-

level policies (e.g. anti-discrimination laws) are addressed. Part IV outlines

recommendations for the following: (1) future research, with a particular emphasis on

further China-specific studies, which would better inform policymaking and theoretical

understanding of how the regulatory and normative legitimacy of diversity and inclusion

practices affects business performance; (2) improving employer LGBT-inclusion policies,

which draw upon the Tackling Discrimination against Lesbian, Gay, Bi, Trans, & Intersex

4 Charlie Ensor, Homophobia Costs Countries $100 Billion a Year, Economist Argues, Humanosphere,

(Feb. 6, 2017), available at http://www.humanosphere.org/human-rights/2017/02/homophobia-has-an-

economic-cost-for-countries-economist-argues/ (last visited Nov. 26, 2019).

5 M. V. Lee Badgett, The Economic Cost of Stigma and the Exclusion of LGBT People: A Case Study of

India, World Bank Group, (Oct. 3, 2014), available at http://documents.worldbank.org/curated/en/

527261468035379692/The-economic-cost-of-stigma-and-the-exclusion-of-LGBT-people-a-case-study-of-Ind

ia (last visited Nov. 26, 2019).

6 M. V. Lee Badgett, Andrew Park & Andrew Flores, Links between Economic Development and New

Measures of LGBT Inclusion, (Mar. 1, 2018), available at https://williamsinstitute.law.ucla.edu/

wp-content/uploads/GDP-and-LGBT-Inclusion-April-2018.pdf (last visited Nov. 26, 2019).

7 Malcolm Surer, Do LGBT-Friendly Businesses Herald Greater Rights in China?, Caixin, (Jul. 28, 2017),

available at https://www.caixinglobal.com/2017-07-28/do-lgbt-friendly-businesses-herald-greater-rights-in-

china-101123524.html (last visited Nov. 26, 2019).

8 Frank Newport, In U.S., Estimate of LGBT Populati on Rises to 4.5%, Gallup, (May 22, 2018), available

at https://news.gallup.com/poll/234863/estimate-lgbt-population-rises.aspx (last visited Nov. 24, 2019).