2014 Cambridge Conference Business & Economics
ISBN : 9780974211428
Sex Sells
How sexual orientation and gender identity
impacts business, economies, and politics around
the globe.
Jon Austin Gastrock
11/27/2013
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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
disapproval to 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
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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;
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2014 Cambridge Conference Business & Economics
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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 support to 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 company
provides 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 selfidentify 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
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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 corporations do not have the knowledge of which or how many of
their employees are gay or lesbian. One corporation in the Netherlands makes use of a tool to
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gather data on how LGBT employees experience discrimination at work. Many corporations rely
the LGBT networks to pass on the information they gather on 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 countries where discrimination against gays and lesbians is unlawful, like
the Netherlands, or in countries like the United States, where there are many legally sanctioned
forms of discrimination against gays and lesbians, lesbian women make a careful decision either
to hide their sexuality at work or to be open about it. When a woman chooses to hide her
sexuality from her colleagues, it has, as Claudia Woody (2007) of IBM puts it, a double cost—
the individual “cost of thinking twice,” of constantly being on the alert, and the cost to
productivity (hiding who you are from your colleagues reduces 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 showed various 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;
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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 studies have been conducted in other parts of the world, especially the United
States. A recent review of fifteen studies of sexual orientation discrimination in the United States
found that between 10-43% of LBGT community reported some type of sexual orientation
discrimination. The reported rates varied on the individuals surveyed and the studies’ definitions
of the word “discrimination.” Complaints received by equal opportunity agencies in the United
States, suggest that the rate of sexual orientation discrimination complaints per gay person are
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comparable to the rate of sex discrimination 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 as through wage analyses and controlled
experimentation. Studies from the United States have indicated that lesbian women have
reported sexual orientation discrimination at work. But, wage analyses that compared lesbians
and straight 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 wages of gay men and straight men. Gay men earned less doing the same
job as straight men. Information from interviews and 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
discriminate against 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 legislation prohibiting "homosexual propaganda," in February of 2013, became the
most discussed piece of legislation in many years. The legislative vote agreed with popular
beliefs; a 2010 poll by Levada center recorded that 38% of Russians thought homosexuality 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 the legalization of same-gender
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unions. The public’s views towards the LGBT community 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 support from 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 continually
suppressed 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
encourages intolerance 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
increasing outspokenness 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)
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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
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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
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