Life is not all about money. Money helps, no doubt about it, but chasing a paycheck is a hollow existence that someday catches up with everybody. Well, most people anyway. In fact, some research shows that increasing extrinsic rewards (e.g., monetary compensation) will actually decrease the intrinsic reward one derives from work they truly like. It turns out, counter-intuitively, money can actually make you hate a job you used to like, or at least breed indifference to it.
Still, those of us that do the work required to take the GMAT, complete lengthy applications, go to graduate school and earn an MBA degree expect to be compensated for not only the significant sacrifice such laurels require, but also what that piece of parchment is supposed to stand for: a high degree of professionalism, competence, work ethic, leadership, intelligence, dedication, and aptitude for success. This is not about an irrational or immature sense of entitlement; this is about working hard to do what society says is valued and will be rewarded, then never seeing the fruits of that labor. At least not in the brimming cornucopia some anticipate.
Look, everyone deserves a living wage for the work they do as well as the confidence that that wage will augment as they put more effort into building their value as professional members of society. The reality of what the labor market can bear tells a more anemic tale—for most. In a recent Bloomberg BusinessWeek article titled MBA Pay: Peering Into the Future, author Louis Lavelle discusses the results of new research on MBA compensation.
Since 2008, the starting salary average for MBAs has remained stagnant at $90,000 per annum. For most Americans—including this one—an annual salary at that level is nothing anyone should complain about. But the point is taken that a four-year plateau is not inspiring. The article moves beyond immediate post-commencement reimbursement to some new research that asks the question, “What is the MBA’s value over the course of a degree holder’s career?” Rough economic times aside—is this thing really worth it (monetarily)?
The study produced by PayScale has its limitations and is in no way definitive or all together representative of what an MBA aspirant can expect. However, it does reveal generally impressive numbers for MBA degree holders over the span of 20 years of earnings. The study also makes one point very clear, however, about the earning potential of alums from Top 10 institutions and all the rest. In short, the better the school’s reputation, the more that degree is potentially worth to the holder
Is it surprising that a Harvard or Wharton MBA will likely result in more earned income than one from the University of Buffalo or Georgia? Of course not. What is concerning, though, is that the gap between the starting and earned wages of degree holders from top institutions and their lesser-ranked competitors is widening. Simple supply/demand market economics may be all that’s needed to understand why this is happening.
In a previous blog post I wrote about what The Economist describes as a “business school shakeout.” It does not take reams of data to prove what we all know: MBAs are a dime a dozen and oversupply results in price dilution. A pedigree from a top tier program turns out to be an excellent buoy If you can get yourself into one and afford tuition, go for it. Otherwise, maintain the positive attitude and relentless drive that has gotten you this far and prove once and for all the old adage:
There are lies, damned lies, and statistics.
The post MBA Pay: You pay for the degree, but will it pay you back? appeared first on Business School Insider.
