According to a study by the Federal Reserve, of all people, there is an average pay premium of 5% for particularly good-looking people, and an average pay penalty of 9% for particularly bad-looking and obese people.
That’s a total spread of 14% between the best and worst looking workers.
Why is the Fed interested in spending taxpayer money on this?
Is it concerned that this phenomenon is the result of bias and does not reflect improved productivity (e.g., rewarding good-looking salespeople whose looks help them sell more)? And that if based on bias this economic distortion is harmful to the nation’s economic growth?
Perhaps.
The article on this study is CNN/Money: “Surprise! Pretty people earn more; Fed Reserve study shows beautiful people make about 5% more than their average counterparts”
After variables like education and experience are factored out, Fed researchers said the “beauty premium” exists across all occupations, and that jobs requiring more interpersonal contact have higher percentages of above-average-looking employees.For example, the study found there was a higher beauty premium among private sector
lawyers than their government-supported counterparts since private attorneys need to attract and keep clients.
(Silly me! Whatever was I thinking all those years ago back in law school when I assumed that being a good lawyer was all about being smart, thorough, persuasive, and diligent?)
OK. Even if this phenomenon reflects conscious or unconscious discrimination, such discrimination is not illegal. Does this mean employers should not care?
My answer? No, smart employers should care, for several reasons.
First, to avoid claims that practices such as pay and promotion are discriminatory on prohibited grounds, particularly the resurgent disparate impact claims, employers need to be prepared to validate their practices as fully rational “best practices” supported by business necessity.
Practices that result in a 14% pay spread solely based on personal attractiveness would seem to be difficult to validate in this manner.
Put somewhat differently, isn’t likely that practices that are irrational enough to allow lawful appearance discrimination also are likely to allow unlawful appearance discrimination (e.g. race, national origin, religious clothing)?
Second, perhaps the Fed is onto something if its concern is about productivity. Is it wise use of corporate resources to overpay some people because of their superior attractiveness, while underpaying others because of their below-average attractiveness?
Would the company get more “bang for the buck”
with a more rational and fair pay and promotion policy?
Food for thought.
An example of the difference in perspective between attorneys concerned only with the immediate lawfulness of personnel decisions and practices, and HR and business people who also focus on how to truly make the best use of human resources.
My pledge to you, my reader, is to provide both perspectives to the best of my ability.
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