Businessweek teamed up with PayScale.com to get to the bottom of the popular urban myth belief that “MBAs earn the big bucks”. Businessweek’s interest was peaked by the growth in b-school apps, and the fact that most MBA programs lure prospective students with impressive salary stats, i.e. “average salary of Private U. grads: $100,000”. Most, if not all, colleges and grad schools list median and average salaries for grads, which can be misleading. Businessweek and Payscale tried to get to the real truth about MBA pay.
The results were interesting, not surprising, and…a little sad. In our secret places, I think we all know that those “averages” are pretty little distractions from the naked truth that most of us are piling on mountains of debt for molehills of earnings. The Businessweek-Payscale survey found:
- MBA grads entered a variety of high- and low- paying career fields, including nonprofit administration and teaching.
- MBA grads from top schools earned nearly TWICE AS MUCH as the average MBA grad (67.4% of MBAs from top schools earned more than $100,000, 21% earned more than $150,000).
- The MBA pay advantage dropped sharply after the Top 10 schools. Bad news for grads of lower-tier programs.
- Only 17.6% of MBA grads will earn a salary of more than $100,000. The vast majority of MBA grads from all schools will earn $75,000 or less.
- Only 4% of all MBA grads will exceed $150,000 in earnings.
- Pay varied widely among grads from the same school too. At Harvard Business School, the top 10% of earners earned 7X as much as the bottom 10%.
Does this mean you should scrap your b-school plans? No. Hopefully, your MBA dreams were filled with more than visions of zeros and commas. If so, go learn, go grow, go change careers. But, don’t forget to plan for the debt that comes with the dream. Wouldn’t want your MBA dream to turn into a nightmare.