According to the just-released annual GMAC Global Management Education Graduate Survey, job prospects for MBAs are on the decline. The proportion of MBA grads with a job offer right out of school declined to 57 percent in 2009, down from 64 percent from 2008.Think about that: It takes 2-3 years of time, lost income, plus a fortune in tuition to get an MBA--usually filled with theory and real-world-irrelevant cases--and little more than half the new graduates have a job?
And if the trend continues, the employment picture for MBAs will be even worse. Before signing up, caveat emptor!
sorry, but these numbers are ridiculously used: tell me one field where they wouldn't decline in the current climate (except maybe schools training experts in chapter 11).
ReplyDeleteIt also proves there's not much subject matter expertise, if the author doesn't discriminate between schools and types of courses. I admit I don't know much about US schools, but the good European type exec MBAs are far from what is described here. Most are extremely relevant for real world business - and even poor schools teach you to put numbers into context before making conclusions or even decisions.
Hi Marty,
ReplyDeleteProvocative piece, but suggesting an MBA is not worth getting based on this one data point is not appropriate. At a minimum - what percentage of undergrads will find a job versus the MBA figure you cited, what are the expected starting salaries, and how do the lifetime incomes of those with an MBA compare to those with only a four year degree? These data would present a truer picture of the desirability of obtaining an MBA.
Thanks, Don B @donbart (and yes, an MBA graduate)
There are 2 main reasons why people choose to get their MBA, not to say these are the only ones: 1) they need an escape from the "working" world; 2) they are not sure what exactly they want to do with their life and use the 2 years to better understand it. These 2 reasons are priceless.
ReplyDeleteDepressing news indeed, but a PhD in the humanities rates far worse.
ReplyDeleteSven, of course, all fields, except health care, education, and government are declining, but the MBA has widely been seen as a worthy investment of 2 years of lost income and often $100,000. Yet almost half of the new MBA holders aren't getting ANY job offers. That's worth mentioning, I believe.
ReplyDeleteFair questions, Dave. I don't have the answers. Of course, it is extraordinarily difficult to draw valid inferences even if I did have those answers. Why? Because the kind of person who has the drive (and money) to get an MBA (or who is a hot enough employee to motivate his employer to pay for her or his MBA) would make more money even if s/he hadn't gone for the MBA. I do think it's telling that almost half of new MBAs don't have jobs. American universities know that the MBA is a cash cow (no expensive equipment required to teach MBAs and corps. often pay so tuition can be ratcheted up) so the universities market the heck out of MBA programs, and in many cases admit nearly any warm body willing to pay the tab so the market is glutted with MBAs.
ReplyDeleteIf the MBA is so useless, why do so many people get one because their company won't promote them without it? And why do companies pay for people to get MBAs?
ReplyDeleteThe short answer is the employers and the larger society is uncomfortable for psychological and legal reasons making hiring/promotion decisions based on subjective criteria, so they divert responsibility to a third-party: the university, which when it bestows a degree, says, "You're competent," even though they don't have to live with the consequences of that certification. And employer after employer will admit that often MBAs come in and make matters worse, thinking that models they learned in their MBA program will apply to the on-the-ground situation, which it too often doesn't.
ReplyDeleteRegarding your last comment:
ReplyDeleteSpot on Marty! Complimenting blog post here: http://www.overcomingbias.com/2009/06/why-signals-are-shallow.html
Hi Marty,
ReplyDeleteI read the website you had up about six years ago, and I liked it.
Hadn't read anything by you since. Just found your blog today. I had
no idea that you're involved in the men's movement and are alerting
people that college is largely a scam. I'm quite impressed.
I wouldn't trust the numbers published about MBAs with jobs at
graduation. The employment numbers for law schools are a flat out
fraud and I doubt it's any different for MBAs. I'm sure the number of
people with jobs at graduation is far less. I went to a top twenty law
school and supposedly over 90% of people had jobs at graduation and
the average pay was over 90k. Total lie. I'm not sure if it's just the
law schools or also US World and News but the stats are not reliable.
Some law schools hire their grads part time to make it look like more
of their grads are employed.
Another problem with MBAs is they're actually worse than business
undergrad degrees. My undergrad was in business. I've compared the
curriculums and the MBA has the same classes except with higher
numbers in front of the course name, but fewer classes overall. There
are also basically no prereqs to get an MBA either. Like you were
saying MBAs are cash cows for universities because there are no
prereqs and they can let anyone in. It's the same with law schools
only worse. In the last 25 years the number of lawyers to regular
people has over doubled and they're still churning out more and more
lawyers. Maybe someday we can all sit around suing each other and get
rich that way.
Marty,
ReplyDeleteI received a B.A. in communication studies and have struggled to find a decent paying job. Currently I make $12 an hour, and have bounced in the $24-32k a year range since graduating 4 years ago.
The MBA is worth it for me, but only because I am doing a concentration in accounting, which is an extremely in-demand major. I am doing it at a state school, AACSB accredited, and should not have a difficult time finding a job that pays $45-50k once I graduate. My MBA program will cost only $27k and I will finish in less than 2 years.
If you can't get into Harvard or some other school in the top 3, just make sure you get your MBA in an in-demand area such as accounting. That's my advice.