Blogger Linda Brewer comments on the relative earning capabilities of MBAs: “It seems to me it’s still all about connections. The rich elite get into the rich, elite schools because they are part of rich, elite society. Regardless of the education they receive, they get out of school with those same connections and are hired at top salaries. No way do I believe that a middle-class kid, no matter his abilities or education, can break in to their world.”
This was a reaction to a report in “BusinessWeek” asserting that graduates from prestigious schools like Harvard, Wharton or Stanford make over a million dollars more during a 20-year career than grads from less elite programmes. It mirrors a common sentiment, but does it also reflect the truth?
For the third year, Pay Scale, a company that collects salary data from individuals through online pay comparison tools, used its database of MBA graduates from the top U.S. business schools to calculate their median cash compensation – salaries and bonuses – around graduation and after they have an average of 5, 10, 15 and 20 years of pre- and post-MBA work experience. “BusinessWeek” then used the data to estimate median cash earnings over the entire 20-year span.
Indeed, MBA graduates from the before-mentioned big name schools do command the highest salaries. They make an average of 126,000 dollars after earning their business credential. But is the additional million over two decades really only a result of their school’s image? Executive compensation expert Ken Hugessen explains: “If you're at a top school, you must be pretty smart to get in. You're a stronger breed of cat from day one. That will follow you throughout your career.”
Over the course of 20 years grads from the 57 top programs earned an estimated 2.4 million dollars in base pay and bonuses, according to the data. At the high end are people with a full-time degree from Harvard Business School, where grads earned about 3.6 million dollars. On the low end is a full-time degree from the University at Buffalo, where grads earned about 1.7 million dollars. After Harvard, Wharton grads earned the most, with total cash pay of 3,340,334 dollars, followed by Stanford at 3,291,894 dollars.
But MBA grads from the also top-ranked Booth School at the University of Chicago, made only an estimated 2.9 million dollars, good for only ninth position overall. Julie Morton, associate dean of career services at Booth, says a lot of the difference has to do with the industry that students go into. More grads at other top schools take consulting jobs than at Booth, where finance jobs are more popular, and that, she says, explains a lot. School like Harvard are going to have a higher base because they send more people into consulting than into banks.
Overall, grads from the top B-schools experience an average salary increase of about 83 percent over the 20 years, a return that mirrors the national average over the same time period, according to PayScale.