Americans Pay a 'Pound Penalty' in the Workforce If They Are Obese

Newswise — Being obese could cost a person tens, maybe hundreds of thousands of dollars in wages, according to findings in a recently published study.

In America there is a "pound penalty" for obese people in the workforce, a penalty that is greater for females, according to Drs. William F. Ford and Charles L. Baum, economics and finance professors at Middle Tennessee State University. Ford and Baum are co-authors of the study, "The Obesity Wage Penalty," published in the September 2004 (Volume 13-9) of Health Economics.

The study determined that both men and women experienced a persistent obesity wage penalty over the first two decades of their careers, said Ford, who also holds the Weatherford Chair of Finance at the university in Murfreesboro.

"There are several variables, including education, race, gender, and so on, that have a direct effect on a person's earnings," Ford said. "Our research suggests that obese individuals persistently earn lower wages than non-obese peers in each of these groups.

"We also found that obese females apparently pay the largest 'pound penalty' when combined with any of the other factors."

In their paper, Ford and Baum note that an increasing number of Americans are overweight and obese, with currently about one in three being obese. As a result, Americans are now more likely to be obese than to smoke cigarettes or use illegal drugs, they said.

The professors offer additional observations. Since Americans typically gain weight as they age, it is possible that the obesity wage penalty may be masking employer discrimination against older workers. Discrimination against minority groups and women may also account for part of the obesity wage penalty, since for example, African Americans are more likely to be obese. Other socioeconomic variables affecting wages are work experience, education achievement, and family background and environment.

"Any attempt to identify the underlying causes of obesity earnings penalties must include controls for such standard socioeconomic variables," they state in the study.

Ford and Baum have been studying the societal costs of obesity for several years and have noted that obesity wage penalties exceed those of cigarette smoking and alcoholism.

Since there seems to be a correlation between obesity and lost wages in America, one might wonder if the findings also would be the same in other countries, especially in those cultures where there's not as much emphasis on being slim and trim. In addition, might the wage penalty gradually adjust downward in a situation where an obese person lost a lot of weight while on the job? Ford says those scenarios deserve separate studies of their own.

"This paper doesn't prove any of that," he said. "A psychologist looks at your mental health. A doctor looks at your physical health. This is the way an economist looks at obesity," he added.

Data from the National Longitudinal Survey of Youth (NLSY) were used to examine the effect of obesity on wages by gender. Health Economics, one of the most respected publications for economists following health trends, is published bimonthly by John Wiley & Sons Ltd. at the Center for Health Economics at the University of York in York, England.