A person holding a pride flag in front of the Supreme Court building on June 15. Photo: Chip Somodevilla/Getty Images
This week's Supreme Court ruling that American companies cannot fire workers for their sexual orientation "is good news for the U.S. economy," Paul Donovan, chief economist at UBS Global Wealth Management, writes in a note to clients. In fact, he says, "The impact is potentially quite big."
The big picture: The decision provides employment security to an additional 5% of American workers and gives the U.S. an international comparative advantage.
- "Around 60% of the countries in the world still allow your boss to fire you if they do not like who you date," Donovan says.
- That could mean the U.S. attracts and retains a higher number of the international workforce than it would have previously.
Further, "If prejudice could cost someone their job, they needed cash as insurance. If that risk is reduced, LGBTQ+ investors can consider more diverse investment options. Taking money out of idle cash balances to invest should be positive for the economy."
Finally, the ruling should increase labor mobility as LGBTQ+ workers no longer have to fear moving to states (which were previously about half of the U.S.) where employers had legal permission to fire an employee for their sexual orientation.
- This should increase productivity and employment, Donovan argues.
- "Mobility will be important with the structural changes of the fourth industrial revolution."