For an estimated two million Americans whose gender identity does not match the gender they were assigned at birth, reaching income equality and income stability can be a major struggle to living a dignified, comfortable, and fulfilling life. Trans misogyny and transphobia can make it harder for transgender individuals to be hired, remain employed, and get promoted—in short, to be paid as much as their equally qualified cisgender peers who aren’t subject to discrimination and harassment by coworkers, supervisors, and clients.

According to the SF LGBT Center in San Francisco, half of trans people say they’ve been unfairly fired or denied employment, and three in four say they’ve been harassed at work. The Supreme Court’s Bostock v. Clayton County decision in June 2020 prohibits employers from discriminating against transgender individuals, and President Biden’s January 2021 nondiscrimination executive order bolsters that decision.

But even though workplace discrimination may be illegal, it’s not going to magically disappear. It has interfered with people’s ability to do their best work, advance in their careers, and reach their earning potential, and it will continue to do so. A June 2020 survey by the Center for American Progress found that 53% of transgender individuals surveyed said discrimination moderately or significantly affected their ability to get hired, and 47% said it affected their ability to remain employed.

Key Takeaways

  • Transgender individuals face workplace discrimination that affects their ability to get hired, remain employed, and do their best work.
  • Contributing factors such as youth homelessness can make it harder for members of the trans community to get the education they need to be competitive in the workforce.
  • Trans people of color are at a particular disadvantage because they are members of more than one group that is discriminated against.

Housing Instability

Besides workplace harassment and discrimination, other aspects of being trans, queer, or gender-nonconforming can indirectly contribute to lower earnings. For example, teens or young adults who were thrown out of their conservative households because of their gender expression may not have completed high school or college.

Young adults ages 18 to 25 who identify as LGBT are, in fact, 2.2 times more likely to be homeless than their non-LGBT peers, often due to family rejection. Accessing homeless shelters and services can be risky due to further discrimination and harassment. And living in survival mode makes it difficult to plan for the future.

A study published in the journal Labor Market Inequality in 2020 found that, compared to otherwise similar cisgender men, transgender individuals are less likely to be college-educated or employed, and they have lower household incomes and higher poverty rates. By contrast, the SF LGBT Center says that trans people are twice as likely to have a college degree but three times as likely to be unemployed.

Unemployment and Poverty

Transgender people experience high rates of unemployment and poverty. The most recent U.S. Transgender Survey (USTS), conducted in 2014 and 2015, found that survey respondents were unemployed at a rate of 15% compared with 5% for the general population—and the USTS sample only includes people 18 and up, versus 16 and up in the U.S. Bureau of Labor Statistics (BLS) data for the general population.

American Indian, Black, Latinx, and multiracial transgender people were all unemployed at two to three times the rate of cisgender people of the same race. Because identity is intersectional and many trans, queer, and gender-nonconforming people are also people of color, they can have two factors working against them earning as much as white cisgender people.

The survey also found that, while 14% of the U.S. adult population was living in poverty, the segment of the adult transgender population living in poverty was 29%. Transgender respondents also reported substantially lower household incomes than the U.S. adult population. Since the transgender population is different than the U.S. adult population in terms of age and educational attainment, the survey results are weighted to allow for more accurate comparisons between the two groups.

Even with this weighting, the most common income range for transgender respondents was $10,000 to $24,999, and the most common income range for the U.S. adult population was $25,000 to $49,999. The biggest discrepancy is in the $1 to $9,999 income range, where 22% of transgender respondents reported their income compared with 15% of the U.S. adult population.

Transgender Wage Disparities

A small study published in 2008 and based on a survey conducted in 2004 and 2005 examined the differing experiences of male-to-female and female-to-male transgender individuals. The researchers estimated that female-to-male workers experienced a slight pay increase after transitioning, while male-to-female workers lost about one-third of their pay.

The study's authors, Kristen Schilt and Matthew Wiswall, proposed that "the experience of a person who works both as a man and as a woman can illuminate the subtle ways that gender inequality is socially produced in the workplace. While transgender people have the same human capital and pre–labor market gender socialization after their gender transitions, their workplace experiences often change radically."

The Pandemic’s Impact on LGBTQ+ People’s Incomes

The coronavirus pandemic has worsened the problems that trans, queer, and gender-nonconforming people face when it comes to earning an income. Writing for The New York Times, Scott James reported in June 2020 that the Trans Lifeline, a peer support and crisis hotline for the trans community, was receiving four to five times as many calls as usual about unemployment and workplace discrimination.

Before the pandemic hit the United States, members of the LGBTQ community were more likely than members of the non-LGBTQ population to be employed in industries that would be highly affected by the disease, including restaurants and food service, hospitals, education, and retail, according to a March 2020 report by the Human Rights Campaign Foundation.

During the pandemic, June 2020 survey results revealed that LGBTQ people were experiencing reductions in work hours, unemployment, and pay cuts at far higher rates than the general population.

Disparities were worst for LGBTQ people of color, transgender people, and especially transgender people of color. LGBTQ families have also been much more likely than non-LGBTQ families to have experienced at least one serious financial problem during the pandemic.

The Bottom Line

There simply isn't as much research on the incomes and socioeconomic statuses of transgender, queer, and gender-nonconforming individuals as on cisgender individuals. What's more, non-cisgender individuals aren't always out, so it can be more difficult to speak with them for surveys or studies and to generate random samples of the population to study.

People's gender presentations can differ dramatically as well, creating another variable that makes it challenging to reach scientifically valid conclusions about the causes of income differences among groups. What seems to be clear from existing research—besides the fact that more research would be helpful—is that reducing discrimination and harassment of trans people could go a long way toward improving their financial circumstances.