How gay marriage could deliver an economic boost

MAKING gay marriage legal could give Australia’s economy a boost — and that’s not counting the millions likely to be spent on weddings.

Gay marriage could boost economy

MAKING gay marriage legal could give Australia’s economy a boost — and that’s not counting the millions likely to spent on weddings.

Top UBS economist Paul Donovan says the implications of marriage equality go far beyond the walk down the aisle, for three reasons:

1. It would encourage labour mobility, which is linked with economic growth, by removing a disincentive to workers whose relationships are not recognised in a particular state.

“Denying same-sex marriage has direct adverse costs to LGBT people, in that they

are unable to enjoy the tax breaks, healthcare, or legal rights that accompany

marriage,” Mr Donovan said.

“However, the costs also create a problem with labour mobility.”

2. The ban on gay marriage creates an irrational prejudice based on sexuality.

“Any action that irrationally discriminates against a section of society is the

economic definition of prejudice,” Mr Donovan said.

“If rights are given to one group, but denied to another, then an economic distortion is created. It does not matter what the discriminating characteristic is — gender, religion, race, class, sexuality, etc. If one group in society is privileged relative to another, and there is no possibility of moving between those two groups, then the group denied the privilege will be

economically disadvantaged and the economy as a whole will become less efficient

(less productive).”

3. The strain of staying in the closet linked to mental strain and lower productivity.

Mr Donovan argued that “the more subtle issue of status” was potentially the biggest factor in the economic impact of marriage laws.

“If members of a group feel that they have to hide an aspect of their character, the stress of a covert existence will contribute to underperformance,” he said.

“Talented employees will not reach their full potential because they are irrationally perceived as inferior to other employees and overlooked in the promotion process ... At the same time, the mental wellbeing of members of the group that is subject to prejudice is also likely to be detrimental to their economic performance. There is strong evidence that creating an inferior class in a society will impact the economic performance of that group and of the wider economy.”

He said the “separate but equal” argument, which holds up civil unions as the answer, did not fly from an economic perspective.

Mr Donovan’s analysis came in response to last month’s US Supreme Court decision, which overruled laws in those state laws that did not recognise gay marriage.