Report: Gay Marriage Would Benefit National Economy
EDGE National News Editor
by Peter Cassels
October 19, 2006

If every state legalized gay marriage, there would be a positive impact on the economy, generating $2 billion for the wedding industry alone, according to a study issued this month.

The impact on the marriage business is one of the conclusions of the study issued by the UCLA Law School’s Williams Institute on Sexual Orientation Law and Public Policy.

The study also contends that U.S. businesses would have more productive and healthier employees that would more than offset the costs of additional benefits. The economy also would gain from reduced government costs.

Titled "The Effect of Marriage Equality and Domestic Partnership on Business and the Economy," the study is authored by Drs. Lee Badgett and Gary Gates of the institute, which conducts research and education for judges, legislators, lawyers, other policy makers and the public. The institute is named for philanthropist Charles Williams, a former senior executive at Sperry Corporation.

To arrive at the $2 billion figure for increased wedding business, Badgett and Gates first estimated the number of same-sex couples who might marry if it were legal by using 2000 U.S. Census data on such couples living together. They then multiplied the number of couples by the average dollars spent on weddings.

According to the census figures, there are more than 594,000 same-sex couples in the U.S. Based on Vermont’s history of civil unions, the researchers predict that half of a state’s gay and lesbian partners would marry--a total of almost 300,000 couples.

The average wedding in the U.S. in 2006 costs $27,490, but the researchers assumed that the average same-sex couple would spend only 25 percent of that estimate, or $6,873, because of several factors: some couples may have already had commitment ceremonies; same-sex couples may receive less financial support from their families to cover costs, and only spending that comes from couples’ savings would truly be new spending for a state’s businesses, rather than funds diverted from other uses.

Badgett and Gates also used the census data to provide state-by-state estimates of spending on same-sex weddings. Fore example, more than $74 million would be spent in Massachusetts if half the domestic partners there marry. In New York, it would be more than $175 million.

Gathering data from numerous studies and research findings, as well as their own, the researchers also report that gay, lesbian, and bisexual workers receiving domestic-partner benefits are more open in the workplace and enjoy better mental health than those who don’t receive them. Additionally, the study concludes that partner benefits increase job satisfaction and job retention, reducing recruitment and training costs for companies. Even though businesses will have some one-time administrative costs, ongoing costs to employee benefit plans will be low, since few employees will have new spouses or partners to cover, according to the research.

The authors note that the current differing status of the recognition of same-sex couples among states (only Massachusetts has granted full marriage status, but several others have legalized civil unions or instituted domestic-partner registration) is confusing and costly for businesses. The situation can make it difficult for businesses to know how to treat employees and their partners across jurisdictions. Employers in states with no recognition of gay couples also risk losing employees to jobs in states with more favorable policies, the research contends.

Asked in an interview with EDGE about how state governments would benefit from gay marriages, Badgett said they would vary. "Big gains come because states will get more sales-tax revenue because of weddings," she explained. "The second effect comes from state spending on public assistance programs. Right now [gay] people who are in relationships are treated as individuals. If you are married and apply for public assistance, they look at both parties’ income. When same-sex couples can marry there will be a reduced need for public assistance and some won’t be eligible any more."

It’s difficult to predict the impact of gay marriages on state income taxes, Badgett maintained. Currently, domestic partners, even if they are married, cannot file joint federal tax returns and many states piggyback on the federal tax return to determine income-tax liability. The so-called "marriage penalty" happens at the federal level, the research said. "If you file as two single individuals you would pay less in taxes than if you got married and filed as a couple. People who have similar incomes pay more in taxes, [but] a lot of people get a marriage bonus. When one person earns a lot more than the other person, those individuals pay less in taxes if they are married."

According to the Massachusetts Department of Revenue, same-sex spouses file as married persons, jointly or separately, for state income tax purposes. California Gov. Arnold Schwarzenegger recently signed a bill allowing registered domestic partners to file jointly. "We found for about half of couples in California, their taxes will go down," Badgett told EDGE. "For about 10 or 11 percent, their taxes go up a bit."

One of the report’s conclusions is that marriage equality would make it easier for multi-state and multinational businesses to transfer employees between states and other countries and create consistent benefit and salary policies. Canada, the Netherlands, Spain and Belgium have legalized same-sex marriages.

Asked to elaborate about the disparity in current laws recognizing same-sex couples that causes problems and confusion for employers and workers about such transfers, Badgett used Massachusetts as an example: "Certainly an employee who is married to a partner in Massachusetts and is asked to move to any other state has to decide which is more important, the relationship or the job. A lot of Massachusetts couples think about that.

"People are aware that they live on an island in a sense. I’ve heard that companies have been thinking about this on an international level as well. It’s an issue that will become bigger over time as partnership recognition develops.

Although the gay marriage study includes data cited from other research, Badgett reported that it’s "the first to show the big picture, how all of these different pictures fit together and add to the conclusion that giving equal marriage and domestic-partner benefits make good sense for the economy." The study has generated considerable interest in the mainstream news media, particularly among business writers, she added.

Visit www.law.ucla.edu/williamsinstitute to read the complete report.



A recipient of the National Lesbian and Gay Journalists Association’s Excellence in Journalism award, Peter Cassels is a member of the Online News Association. His e-mail address is pcassels@edgepublications.com.