Hollywood rumours and conspiracies have always been a thing, but some have been more imagined than others. Take for example, ‘the velvet mafia’. During the mid-20th century this term described a network of LGB conspirators who apparently controlled Hollywood. Dare to get in their way and your career was over, or so they said.
Yet recently, this term has become more divorced from its illuminati-esque origin and has been reclaimed by the LGBT+ community to mean something more positive. Nowadays, the term ‘queer mafia’ or ‘gay mafia’ refers to informal networks of LGBT+ people, of all ages, who help each other navigate socio-economic hurdles.
In essence, this means informing others about prestigious internships, giving them job recommendations, or introducing them to influential work colleagues. For working class and middle class LGBT+ people, this means accessing networks that would otherwise be shut-off to them, all thanks to an example of minority solidarity.
Research on how effective these networks are in reality, is elusive. However, there is some research on how ‘social capital’ intersects with being LGBT+. Putnam defines the term as “social relationships, expectations, obligations and norms” that bring about human activity.
According to Cronin and King, older LGB people often (though not always) have extensive social networks that they draw upon to combat institutional homophobia as and when they need to. Whilst a 2015 study by the University of Washington found that among LGBT+ folk, social networks were much more expansive than those of straight and cisgendered people, and that this was positively associated with higher income and identity disclosure.
It’s perhaps heartening to see that, in the face of adversity, the ‘queer mafia’ is willing to intervene. More socially and economically powerful members of the queer mafia use their personal social and economic prowess to boost that of less socially and economically powerful members. The process then repeats itself. Underlined by minority solidarity and simple friendship, a type of non-financial economic redistribution takes place on a completely voluntary basis.
In terms of ‘LGBT-economics’ the concept of the pay gap has been much more thoroughly researched. A 2015 study of Canadian sexuality earnings gaps found that straight men earn the most, followed by gay men, then lesbian women, then straight women. Little of this is very surprising, except for the fact that lesbian women earn more than straight women, the so-called ‘lesbian premium’.
What is more surprising is that a 2017 study by Carpenter and Eppink on the American market found that, as of that year, gay men actually earned more than straight men as a whole. Meanwhile, a study by Aksoy, Carpenter and Frank in 2018 found that in the middle of the 2010s, gay men and straight men in the UK had pretty much equal wages.
The implication here is that, all things being equal, LGB folk will earn more than straight people. Of course, this is by no means ‘natural’ and is actually a reflection of economic trends.
The first important trend here is the fact that LGB folk are more likely to have higher levels of ‘human capital’ (skills and education) than straight people. This is due to the fact that they are more likely to seek a higher education and participate in more extra-curricular activities during their time in higher education.
The second important trend here is that same-sex couples are more likely to have either fewer children or see childcare as a shared responsibility. According to an analysis by the Institute for Fiscal Studies, the pay gap between men and women grows significantly after childbirth, increasing from 11 per cent upon the birth of the first child, to 33 per cent 12 years after.
Here, the strong implication is that the biggest factor in the gender pay gap is unequal attitudes about childcare in heterosexual households. Free from these assumptions, those in same-sex couples do not see a negative effect on their income as a result of having children.
Research on the pay gap between transgender and cisgender people is much more sparse and much more negative. However, transgender people are more likely to be in university education and participate in extracurricular activities than cisgendered people, and so the LGB example implies that as trans-tolerance in wider society increases, a ‘trans-earnings premium’ may develop.
Another interesting phenomenon is the effect LGBT+ people have on the wider economy. Open For Business, a coalition of global companies focusing on LGBT+ inclusion, recently released a report on the correlation between LGBT+ tolerance and business success. The study found that economic, business and individual performance were much higher in cities that are more tolerant of LGBT+ people.
Here we encounter a chicken and egg issue. Does economic success breed tolerance or does tolerance breed economic success? The answer appears to be both.
We know that the more a country develops economically, the more likely that country is to adopt socially liberal policies as a socially conscious middle class develops. But economic history is full of examples of social tolerance leading to economic development.
In the 17th century, the Dutch Republic became the refuge of Europe due to its religious tolerance. The same was true of Berlin and Prussia under Fredrick the Great, London and the UK in the late 19th century, as well as the United States for much of its existence.
These societies were uniquely tolerant for their time and, as a result, benefitted from an increase in human capital (skills and education) from less-tolerant societies. Essentially, smart people from oppressed minorities were attracted to the tolerance of these places and migrated towards them, leading to increased productivity or innovation that benefitted their wider economies.
Due to the likelihood of LGBT+ people to have more human capital than non-LGBT+ people, it’s highly likely that the tolerance of cities such as New York, Amsterdam and Stockholm (all given AAA ratings by the report) attracts LGBT+ migration which improves the aggregate level of human capital for the entire city, eventually translating into economic capital.
Evidence and research on the effect of the ‘queer mafia’ is sparse and there are only so many conclusions we can make about this phenomenon, but research does strongly imply that an ‘LGBT+ premium’ is developing across the western world. Meanwhile, and most interestingly of all, LGBT+ inclusive cities definitely seem to benefit from a ‘tolerance premium’ improving pay-packets, profits and tax receipts, wherever it is strongest. In short, everybody wins.