The economy still is not strong, and unemployment still is high. Wall Street also is laying off employees in the thousands. So, it is not a surprise that applications to many business schools are off and some even are debating whether an MBA degree is worth the effort.
However, the most recent numbers on the median starting wages for the MBA class of 2012 are very interesting. As in the past, some of the biggest salaries are from the graduates of the Big Boys – Harvard, Stanford and Wharton, whose MBA grads often earn $100,000 or more. Also, graduates from these schools often receive more non-salary compensation and perks. For example, at Harvard Business School, about three out of four graduates got a signing bonus of at least $20,000, and about 20% got some other form of guaranteed compensation. And Harvard MBAs who get really lucky get a big base pay, bonus and a guaranteed compensation package averaging a whopping $170,000 in the first year.
But what is surprising is how the recent data shows that getting your MBA degree is one of the best ways to really increase your earning potential. Where you really see the difference is in your first job after you get your MBA. You should realize a serious boost in your pay. This makes getting your MBA even more desirable than it was before.
Interestingly, some of the biggest returns on investment have not come from Harvard or Stanford. In these cases, many students left jobs that already paid them quite well. No, the best returns are at other good business schools but are not at the very top in terms of prestige.
This year, MBAs that are reporting the biggest increase in their pre-MBA salaries are Michigan State (267% increase), Notre Dame (148% increase), University of Minnesota (132% increase), University of North Carolina (122% increase) and Indiana University (119% increase).
These huge increases over pre-MBA salaries are really impressive, especially when you consider how uncertain the US economy still is. Surveys show that at seven of the top 30 MBA schools, graduates were able to double or triple their pay before they got their MBA. And at 23 of the 30, grads stated that they saw at least a 50% bump in their starting wages.
Also, reports have shown that 17 universities reported six figure median salaries for their MBA graduates. Some of these were $125,000 for Stanford, and seven schools that had starting salaries at $100,000 these were Cornell University, Yale University, USC, Emory University, University of Texas at Austin, University of North Carolina and New York University-Stern.
Recent surveys did indicate, however, that the slow economy is having an effect on year over year starting wages for MBA graduates. Businessweek has reported recently that the inflation adjusted growth rate for median salaries for many MBA school graduates is not great. At about ⅓ of the 30 schools they surveyed, the growth rate of median salaries was negative over the last three years. Year over year median wages have stayed stagnant at Stanford, Harvard, Columbia, and Yale, for example.
A few schools did manage to buck this trend. At University of Chicago, there was an increase in median salaries from $107,000 to $115,000 from 2011 to 2012, and at Duke University, from $101,000 to $110,000. And, 23 of 50 schools did report that MBA graduates had realized at least a 50% increase in their pay from before they had their MBA.
Overall, the increases over pre-MBA salaries is very impressive, when you consider that the economy still is not strong.