MBAs Cost More and Are Less Profitable as ROI Falls (bloomberg.com) 18
Getting an MBA in the US has gotten a little more expensive and a little less profitable, according to a Bloomberg analysis of salary and tuition data. From the report: This year's update of Bloomberg's Business School ROI Calculator, based on surveys of more than 9,500 students and alumni, projects a typical return on investment of 12.3% a year for the decade after graduation. That's down from 13.3% last year. The S&P 500 index, by comparison, returned 14.6% over the decade ending Aug. 31.
The main reason for the decline: This year's respondents reported 6.2% better pre-MBA salaries than last year's, while projected postdegree earnings increased only 1.7%. In other words, the MBA pay edge -- the compensation boost graduates get for the degree -- shrank. In the broader US workforce, the average high-skilled worker's earnings rose 4.7% in the year ended July 31, Federal Reserve data show.
Other factors didn't help: The increase in pre-MBA salaries meant students were forgoing more income during their studies. Tuition and other expenses increased 2.4%, some of that financed with bigger loans at higher rates. In all, the typical total investment to get an MBA in the US rose 6.8%, to almost $300,000.
The main reason for the decline: This year's respondents reported 6.2% better pre-MBA salaries than last year's, while projected postdegree earnings increased only 1.7%. In other words, the MBA pay edge -- the compensation boost graduates get for the degree -- shrank. In the broader US workforce, the average high-skilled worker's earnings rose 4.7% in the year ended July 31, Federal Reserve data show.
Other factors didn't help: The increase in pre-MBA salaries meant students were forgoing more income during their studies. Tuition and other expenses increased 2.4%, some of that financed with bigger loans at higher rates. In all, the typical total investment to get an MBA in the US rose 6.8%, to almost $300,000.
because its cheaper to get anAI (Score:2)
Average values? (Score:2, Insightful)
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Getting an MBA at a big name school is about contacts & connections. Networking and all that.
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I don't have an MBS, but I did get a M.S. degree in supply chain management.
Learned absolutely nothing useful, but I did get a credential that I am absolutely convinced paved the way for future success and a lucrative job, which, really, is all I was looking for.
The degree was super cheap too, about $15K.
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I meant to add, my MS in Supply Chain Management is from a very no name school.
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Summary (Score:2, Insightful)
Wage-slave salaries stay flat while rich get richer, and protecting the rich's tax cuts is a Holy Endeavor.
Please hire editors that can edit (Score:3)
Ok, vent aside... Yeah, the MBA is becoming less of a differentiator. The economy is not great for workers, and MBA schools always want the folks with the most potential, thus probably those that made the most in the first place. Everything is cyclical though, I'm not betting on the MBA industry dying for good.
MBAs... (Score:5, Insightful)
And MBAs with a business degree have no use whatsoever, other than to raise ROI this quarter, and drive the company under next (but they don't care, they've jumped to another company).
Come the Revolution...
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Just like software developers with a fresh master's degree are as green as a teenager, MBA's don't actually know how to run a business. They only know the theory, and how to write papers. Just as only a few educated developers excel at writing software, only a few MBA's actually excel at running a business.
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No, they don't know how to run a business. They're Friedmanites, and all they know is ROI, never mind the company continuing to exist.
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Less Profitable for whom? (Score:3)
But is there any evidence that they were EVER profitable to the people employing the holders of them ?
Did seagull management ever actually work ?
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But is there any evidence that they were EVER profitable to the people employing the holders of them?
My MBA class consisted of the following backgrounds:
- Computer science
- Industrial engineer
- Medical doctor
- Ex-military
- Human Resources
- Procurement
- etc.
It was a Professional MBA degree, tailored towards working professionals. One of the industrial engineers used knowledge gained during the degree program to improve routing for a major package delivery company (the brown one). With my CS background - I've used it countless times in my career to explain in business terms (not technical terms) w
MBA schools have learned to optimize for costs (Score:2)
MBA schools have learned to optimize for costs. The ROI of an education is without a doubt calculated by the administrators. If they can charge just a bit more, the ROI for the students goes down, but for the University it goes up. The logical end is that the costs of an education will become close to its benefits. And MBA schools will likely be ruthless about that optimization.
Can I get my honorary MBA now? :)
(And yes, I know the answer to that question: no, it is of no benefit to the University)
Scarcity. (Score:2)
Shock, horror.
When everyone has one, the value of having one plummets.
supply (Score:2)
Supply and demand.