DOMA Dismissed: Which Industries Stand to Benefit From Same-Sex Marriage?
The LGBT community has serious buying power -- nearly $800 billion worth in this country alone. And that spending power may now be unleashed with the Supreme Court's pair of landmark decisions.
It was a great day for supporters of same-sex marriage. Not only did the Supreme Court rule that DOMA was unconstitutional, but it also ruled that it has "no standing" on California's Proposition 8 case, which in effect means that the California court ruling that Prop 8 is unconstitutional will stand, and that same-sex couples can marry in the state.
The implications of the rulings are profound. For one, same-sex couples are now eligible to claim more than 1,000 federal benefits and programs previously available only to opposite-sex married couples. For bi-national LGBT couples, the changes mean that foreign-born spouses can apply for family-based immigration visas to reside in the US.
Today's decisions will also have a big impact on commercial interests; the LGBT community has serious buying power, after all -- some nearly $800 billion worth, in fact, in this country alone. With marriage being made available to a larger swath of the population than ever before, many industries and companies stand to benefit from the likely increase in merry-making. Here are some of them, as first discussed in our story published in April. --Sterling Wong
Some of the most obvious and immediate beneficiaries of the same-sex walk down the aisle are the myriad enterprises that play a part -- both directly and indirectly -- in the wedding industry. Within the first year of enacting the Marriage Equality Act in June 2011, New York City's economy got a $259 million boost -- well on its way to surpassing the $400 million the State's Senate Independent Democratic Conference had projected over the first three years combined.
Through spending in area hotels, restaurants, catering halls, bridal boutiques, beauty salons and suppliers, caterers, etc. and the resulting tax revenue, gay and lesbian marriage made enough money to pay the city's parks and recreation budget for the year (or to buy each resident three Big Gulps). 2013 is expected to raise $300,000 just in marriage licenses and ceremony fees.
Let's not forget large, public companies like hotel chains, rental car agencies, jewelers, and big box wedding registry retailers that wouldn't have otherwise been patronized.
Minivan and SUV Manufacturers
Love. Marriage. Baby carriage. Minivan.
In researching the purchasing decisions of people in their child-rearing years (ages 28-45), TrueCar.com found that the family roadster is still the auto of choice. "Generation X buyers... chose cars that were comfortable and convenient for their lifestyle," said analyst Kristen Andersson. "They chose larger, more luxurious cars to take their families on vacations or kids to play soccer with ample room to store equipment and luggage."
Of the top ten models purchased by this demographic, only two -- the BMW M3 Sedan and Chevrolet (NYSE:GM) Aveo -- didn't fall into the minivan or SUV category. The Volkswagen (PINK:VLKAY) Routan, Nissan Quest and Armada, Honda (NYSE:HMC) Odyssey, Toyota (NYSE:TM) Land Cruiser and Sienna, Volvo XC90, and Infiniti QX56, respectively, comprised the rest of the list.
In addition to higher profit margins for automakers, bigger cars generally mean less fuel efficiency and costlier insurance premiums -- a boon to both the Exxons and Geicos of the economy.
Speaking of insurance, Progressive (NYSE:PGR) et al.'s same-sex marriage payday isn't limited to its auto arm. The life and term insurance business largely relies on partnering up -- unless the majority of policyholders are eccentrics who are leaving everything to the local research institute on captive parrot breeding.
Real Estate and Home Improvement
Another fairly predictable corollary to settling down is, literally, settling down. According to 2012 data from the National Association of Realtors, 65% of homeowners are married couples. Down the aisle to over the threshold has been a societal procession for generations and there's no evidence to suggest those in same-sex relationships would deviate from that custom.
Moreover, gay and lesbian homeowners invest more in maintaining and improving their properties. In 2009, during the height of the economic downturn, a national consumer survey found the demographic spent twice as much as its straight neighbors on renovations, reporting higher rates of purchase at Home Depot (NYSE:HD) Lowe's (NYSE:LOW), Sears (NASDAQ:SHLD), Best Buy (NYSE:BBY), and Costco (NASDAQ:COST).
"Gay men and lesbians have a reputation of being major home improvement shoppers and this survey reaffirms that," said Matt Tumminello, president of marketing firm Target 10. "Renovating and refurbishing homes is in many ways a part of gay culture. Even in bad economic times, they are not stopping."
On the local level, we saw how same-sex marriages put a few more bucks in New York City's coffers. In 2004, the Congressional Budget Office studied the economic impact on the federal budget and found that while Adam and Steve aren't going to wipe out the deficit, they will make a $1 billion dent every year over the next decade.
This figure absorbs the cost of the government no longer being permitted to deny health insurance coverage, the right to file joint federal tax returns, Social Security survivor benefits, estate tax waivers, and a number of perks to which partners with opposite reproductive organs are automatically entitled.
Assuming same-sex partners haven't unlocked the secret to lifelong commitment, these couples are likely to follow their straight counterparts' lead to Splitsville roughly 50% of the time. While it's true that, statistically speaking, gay and lesbian marriages currently enjoy twice the success rate as traditional ones, the credit is owed less to the demographic as a whole and more to a generation of already long-established relationships finally reaping their civil rights.
"[T]he partners getting married tend to be those who have already been together for some time," says attorney, mediator, and author Frederick Hertz. "They already have weathered the stormy middle years of coupledom, and they are consciously committed to being a family... Think about it -- the couples with shakier relationships are not likely to travel across state lines to get married -- and there certainly aren't any 'shotgun' marriages in the gay community!"
It's a cynical outlook, for sure. But when this groundbreaking nation-wide wave of equality has passed, the spousal stick-to-itiveness won't be far behind, thus paving a fresh path for another caravan of station wagon chasers.
Same-sex marriage is good for business -- all business -- or at least 278 of them representing nearly every sector of the economy. In the interest of fairness as well as their own bottom lines, the biggest corporations in the world, including Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG), Microsoft (NASDAQ:MSFT), Citigroup (NYSE:C), Johnson & Johnson (NYSE:JNJ), Goldman Sachs (NYSE:GS), Nike (NYSE:NKE), Starbucks (NASDAQ:SBUX), Viacom (NASDAQ:VIA), and Disney (NYSE:DIS), joined forces last February to sign a friend-of-the-court filing against the Defense of Marriage Act (DOMA).
The brief read:
Now that the pleas from the business community and many Americans to overturn DOMA have been answered, perhaps those on the opposing side will learn to find comfort in a "If you can't beat 'em, profit off 'em!" approach.
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