Monday, January 7, 2013

A Smaller Paycheck Awaits MBAs

WSJ has the details:
Soaring tuition costs, a weak labor market and a glut of recent graduates[...] are upending the notion that professional degrees like M.B.A.s are a sure ticket to financial success.

The M.B.A.'s lot is partly reflected in starting pay. While available figures vary by schools and employers, recruiters' expected median salary for newly hired M.B.A.s was essentially flat between 2008 and 2011, not adjusting for inflation, according to a survey by the Graduate Management Admission Council.

For graduates with minimal experience—three years or less—median pay was $53,900 in 2012, down 4.6% from 2007-08, according to an analysis conducted for The Wall Street Journal by Pay fell at 62% of the 186 schools examined.

Even for more seasoned grads the trend is similar, says Katie Bardaro, lead economist for "In general, it seems that M.B.A. pay is either stagnant or falling," she says.[...]It is all a far cry from the late 1980s and early 1990s heyday for M.B.A.s, when some companies would hire 100 or more M.B.A.s. It wasn't uncommon to recruit first, and fill actual jobs later.
Government regulations have built a moat around current corporations, which makes it very difficult for new firms to grow aggressively and make major new hires. It's happening a bit around Silicon Valley, but that is about it.

It's also dangerous for established firms to do a lot of upscale hiring, given current labor regulations and the unknowns around Obamacare. For most, it is going to be lower scale jobs, unless you do as Harvard tells you to:


Become entrepreneurial



From The Harvard Business Review:
The future of you depends on your ability to be a brand, a change agent, and a link to useful information. Paying attention to your personality and managing your reputation (how others see you) will turn you into a successful brand; paying attention to your ideas and defying the status quo will help you become a change agent; and bridging the gap between social knowledge and collective interests will turn you into a hyperconnector.


  1. I'm planning on getting my MBA in Vienna this year, but I've been looking at the pros and cons lately

  2. Harvard preaches that success is about "bridging the gap between social knowledge and collective interests"?

    I thought it was about figuring out how to fulfill the selfish interests of paying customers better than your competitor. Silly me.

  3. Really happy to be an engineer, not an MBA.

  4. If we completely removed the state from education, I think we'd see what degrees are really necessary.

  5. Crap. I'm getting my MBA at Harvard right now. Luckily I'm not paying for it, at least directly. My dad is.

  6. Even in the late 80s and early 90s MBAs without subject matter expertise were considered something of a joke--at least by those who actually had to do the work.

    Not that it stopped a lot of them from being hired anyway.

    Another joke of the era was that they'd bring in croisants and coffee for the MBAs, lawyers, and financial guys but the techies should leave their design for the transdimensional hyperwidget with the secretary on their way out the door.

    But I'm not bitter. That's the important thing...