Aesthetic capital vs human capital acquisition: what’s quicker, cheaper and more beneficial in a time of crisis?

This month I completed what the Australians call a ‘FIFO’ – a fly in, fly out visit to London. I was there to participate in a review of the ESRC-funded research centre SKOPE, based at Oxford University. The visit coincided with the funeral in London of former British Prime Minister Margaret Thatcher. Reading through the UK press obituaries, I think that a fair summary of Thatcher political life was that while she loved Britain, she loathed the British. It’s interesting that if, as many of the right-wing commentators claimed, she changed Britain for the better, her offspring now live in the US and South Africa and also flew in for the occasion.

What was also noticeable in the press commentaries was that whilst loathing the British, she actively courted them. Indeed she changed her hair, fixed her teeth, revamped her wardrobe and modified her voice to make herself more appealing to the electorate. Of course, as I’ve noted before, that politicians – male and female – have makeovers is not new and continues today. It’s reported that current Conservative UK Chancellor of the Exchequer George Osborne has had elocution lessons to make him sound less posh. Obviously attending Oxford and Cambridge isn’t enough these days to guarantee success for politicians.

At the same time that I was reading the obituaries, the review of SKOPE focused on the centre’s research on skills policy. As with other OECD countries, the UK has massively expanded its higher education sector and the labour market is now flooded with graduates. At the same time, with government unable or unwilling to fully fund this expansion, students having to pay to study has become the norm in the UK and student debt rising. Tuition fees alone now in England cost £27,000 or $43,200AUS (the Australian and US dollar have near parity) for a three year bachelor’s degree – and with no guaranteed outcome of course.

The justification is ‘learn to earn’ i.e. that a graduate wage premium exists. Following Becker’s human capital theory, university education is positioned as an investment: pay now but, in the future, you’ll earn much more than you would if you hadn’t studied. However the discussion quickly turned to how this wage premium is declining as the supply of gradates exceeds demand. While on average graduates still earn around £2000/$3200AUS each year over a lifetime more than non-graduates, the gap is narrowing, evening evaporating for some – typically arts –  graduates. Part of the reason is that the supply of graduates is outstripping demand and many end up working in jobs not traditionally regarded as graduate jobs. Little wonder that many graduates also report being under-employed in their jobs and, as a result, are becoming dissatisfied, new research by Belgin Okay-Sommerville and Dora Scholarios reveals.

Back in Sydney I asked my master’s students about their human capital investment. Aware that the labour market was flooded with bachelor’s graduates they were back at university to upgrade their qualifications. Their aim is to boost their employability; hoping that having a master’s degree will make them stand out in the crowded and tightening labour market. No doubt as more students sign up to do master’s degrees, those looking for a competitive edge will turn to doctorates. I suspect however that they won’t want to do PhDs with 3+ years of solitary study on low income. Instead to avoid becoming PHDs – ‘poor, hopeless and depressed’ – they’ll demand (and be offered) ‘professional’ doctorates that will be quicker and less stringent; a new form of continuous professional development rather than training for a career in research.

Alternatively they might opt for another quick fix – boost their aesthetic capital; that is, their corporeal capacity to appeal favourably to others. A growing body of research from the US and UK indicates that workers perceived to be better looking receive better pay and job prospects.  Calculations vary but some data, for example from Rhode and Jeffes, suggests that better looking workers have a greater chance of being hired and less chance of being fired; that they are perceived to be more competent at their jobs, are more likely to be promoted and so also earn more.  This beauty premium exists for men and women. And although more pronounced in service industries, it exists across all industries as research by Hammermesh and Biddle, and Harper reveal. Moreover some companies, a prominent Sydney CBD retail store being one, have formalised the rating of applicants’ appearance during hiring interviews and build employee appearance into performance appraisals.

If workers are rational, as economists would suggest, instead of developing their human capital, they might find it quicker, cheaper and more beneficial to develop their aesthetic capital. The outcomes are also usually more predictable. What used to be called cosmetic surgery and now re-labelled aesthetic surgery offers various nips and tucks but a facelift costs around £5500/$8800AUS, liposuction £2600/$4160AUS and simple facial lines and wrinkle smoothing £325/$520AUS. Simplifying and paraphrasing their work, Phil Brown and Anthony Hesketh argue in The Mismanagement of Talent that human capital gets you an interview but social and cultural capital get you the job. It might be that we need to add aesthetic capital to that list.

After all, if makeovers are okay for politicians such as Margaret Thatcher, shouldn’t their electorates have the same opportunities? This issue is one to watch in an era of tight labour markets in which individuals’ striving to again competitive advantage is crucial. Whilst governments are addicted to human capital approaches to making labour markets more effective, don’t be surprised if there are calls soon from politicians for school, college and university careers advisers to start telling young people that there are other routes to boosting their employability. It will be a neat way for governments to place responsibility onto those individuals for levering their own employability rather than for those governments sorting out the economic problems.