"Lifetime" MBA Earnings Ranking

Question

This was released by BusinessWeek. https://www.businessweek.com/interactive ... etime.html

It looks pretty sketchy to me. For the most part it seems to correlate to the main rankings but I can't figure out why Ross is so low. Can someone comment on that?

Median Pay Med Pay Med Pay Med Pay Med Pay 20-Year
School Year 1 Year 5 Year 10 Year 15 Year 20 Earnings
1 HBS 133,000 149,000 182,000 225,000 232,000 3,867,903
2 Wharton 137,000 141,000 161,000 193,000 203,000 3,491,372
3 Columbia 119,000 134,000 165,000 184,000 194,000 3,349,669
4 Stanford 123,000 138,000 149,000 182,000 206,000 3,327,145
5 Tuck 124,000 127,000 142,000 178,000 181,000 3,146,031
6 Kellogg 117,000 117,000 141,000 176,000 190,000 3,085,680
7 MIT 121,000 126,000 137,000 165,000 177,000 3,031,132
8 Chicago 111,000 115,000 137,000 166,000 184,000 2,970,437
9 Haas 110,000 118,000 134,000 164,000 185,000 2,960,527
10 NYU 106,000 112,000 135,000 171,000 172,000 2,918,748
11 Darden 105,000 111,000 138,000 162,000 181,000 2,908,136
12 Duke 105,000 109,000 131,000 164,000 176,000 2,858,021
13 Cornell 102,000 102,000 138,000 167,000 170,000 2,844,421
14 UCLA 100,000 108,000 134,000 162,000 164,000 2,807,378
15 Yale 102,000 119,000 138,000 143,000 149,000 2,750,657
16 CM Tepp. 105,000 109,000 122,000 143,000 159,000 2,659,342
17 UNC 92,600 101,000 122,000 146,000 163,000 2,607,451
18 Emory 89,800 96,100 115,000 150,000 174,000 2,590,233
19 Georgtn. 89,100 94,400 118,000 151,000 164,000 2,570,392
20 Vanderb. 82,700 94,200 124,000 152,000 155,000 2,557,927
21 Texas 89,000 97,200 117,000 147,000 161,000 2,550,997
22 Michigan 107,000 107,000 117,000 135,000 141,000 2,537,508
23 Notre Dm 84,800 94,600 124,000 143,000 150,000 2,507,576
24 USC 88,000 95,400 114,000 139,000 149,000 2,449,177
25 Babson 83,300 90,000 119,000 138,000 151,000 2,432,864
26 Thunderb 74,900 89,200 114,000 136,000 144,000 2,347,535
27 Maryland 74,000 89,200 107,000 141,000 146,000 2,339,753
28 UCI 74,600 87,400 114,000 139,000 139,000 2,337,185
29 Rochester 74,700 86,600 118,000 133,000 138,000 2,320,726
30 Georgia 71,500 84,600 99,800 138,000 146,000 2,257,491
31 SMU 77,200 82,400 104,000 134,000 139,000 2,245,344
32 Boston 74,300 81,300 109,000 127,000 135,000 2,209,609
33 Purdue 73,300 85,500 114,000 120,000 131,000 2,205,865
34 Washingt 78,100 92,700 106,000 119,000 127,000 2,201,277
35 BYU 77,600 87,700 98,300 125,000 139,000 2,200,664

Do you think these numbers are legit?

refurb · Answer

Like all statistics, those numbers can be misinterpreted.

A lot of those differences can be attributed to where the graduates go. If a school is finance heavy, you'll obviously see a trend towards the higher numbers. Schools know for non-profit careers for its graduates will often trend lower.

There was an article that showed how the actual salaries breakdown in terms of a distribution. Very interesting to read.

RF

rpratt620 · Answer

Could you post a link to that article? That would be most helpful.

EBM · Answer

You'll also see differences based on where graduates tend to go in geographic terms. If you're working on Wall Street or San Francisco, you can expect higher salaries partially due to the higher cost of living. Look at the top 10 schools on that list--they tend to put a lot of grads into finance or tech jobs with firms that are concentrated in pricey locales. Look at the bottom of the list--while the bottom 10 are lower-tier schools, most are also located in places with more reasonable costs of living (UT, WA, IN, TX, GA). $150K a year goes a lot further in Salt Lake City or Atlanta than it does in NYC. Michigan and the midwest in general would fall into the category of cheaper places to live, and Ross tends to put a lot of grads into the midwest.

Average salary is worth considering, but it's not something to base your whole decision on. You're probably better off picking a school that's good at producing people who do what you want to do, in a region or regions where you'd like to do it.

Average salary is worth considering, but it's not something to base your whole decision on. You're probably better off picking a school that's good at producing people who do what you want to do, in a region or regions where you'd like to do it.

AlexMBAApply · Answer

Another thing to keep in mind:

The wealthier you are, the less important "earnings" really is.

True wealth comes from the accumulation of assets, and that comes through your ability to make smart investment decisions *and/or* your building your own business.

In other words, the more assets you accumulate over time, the less you will be focused on salary (or earnings).

The lifetime earnings perspective is useful if you're planning on being an employee for life. That may have been more prevalent 10-20 years ago, but will become less so going forward.

Remember that in the old days, the biggest benefit of "working for a company" was job security and benefits - especially at large companies. And both of that (job security and benefits) are eroding or largely gone. As such, there's really not much value in "working for a company" beyond getting some exposure and experience.

In other words, the risks in relative terms of starting your own business (or joining a startup) are becoming less because "joining a company" in a way isn't a lot safer or secure.

And when it comes to entrepreneurship and startups, it's less about "earnings" as it is about accumulating assets, *and* the independence to steer your own ship or to have more control over how to navigate that ship.

For many of you, I can assure you that there's a strong chance you won't be working for someone else for your entire working life - and that there will be significant chunks of your working life where you will either have your own business, or will be close to it (i.e. working at a startup).

Again, these lifetime earnings metrics may have been useful if we were living in the world of the 1950s-1980s where careers were more linear and stable (and the differences in cost of living between different regions wasn't quite as extreme as they are today), but it won't really do you much good going forward since for most of you, it's highly likely that:

(1) You will make 180-degree changes in your career (not just within "business" but even outside of business) every 10-15 years or so, and

(2) There will be a significant chunk of time (5-15 years?) where you will likely be self-employed, have your own business, or working at a small business as a near-owner.

As such, when there's such big non-linear changes in your career choices, you can't simply extrapolate earnings/numbers from a prior career to subsequent ones, since they are independent events (i.e. what you used to make as an investment banker has NOTHING to do with how much you'll make working as a real estate developer, or a mgmt consultant who becomes a school teacher for a few years and then goes back to working in mgmt at a nonprofit before running for office, or whatever).

Tradeoff · Answer

Great stuff, Alex.

dibblebun · Answer

who cares how much graduates make? there are some schools that attract a lot of people who very much want to go into non-profit. their $$ are lower but they are doing exactly what they wanted to do. other schools have lots of finance folks, doesn't mean it's a better school, just means that's where the focus is. there have got to better measures of "good" school.

southernstunna · Answer

This. I would say that an overwhelming majority of the variance in these numbers stems from this fact above only. NYC pays significantly more than most other cities (Houston, Atlanta), and it costs TWICE that to live there.

riverripper · Answer

Not really...New York pay isn't that out of line from other cities for many jobs when you compare position to position. A corporate companies isnt going to pay someone 2X just because location, costs are too important and if it was that glaring of a difference they would switch. Its more a function of what jobs are in NYC vs Atlanta. Not a whole lot of investment jobs in Atlanta when compared to NYC. NYC has corporate positions that will pay higher than the vast majority of jobs at a company. Corporate jobs are almost always white collar and require higher education and greater responsibility.

Look at employment reports for various schools and look at the regional pay data and it will show there is not a huge difference in pay for functions from one region to another. In fact a lot of jobs, such as consulting have the same salary for all locations. So that 130k salary is going to be the same for all offices whether they are NYC/Boston/San Fran, or Dallas/Atlanta, etc.

zacdaniels · Answer

I've always wondered based on these MBA earnings rankings, do most top-tier JDs make more $$$ than H/S/W grads?

see: https://www.infirmation.com/shared/searc ... _abbrev=NY

Note that the overwhelming majority of law school graduates from top 25 law schools make the above law firm salaries upon graduation (see, e.g.: https://www.lawschooltransparency.com/cl ... ?school=bu)

So a Boston University JD is likely to make more earnings than the average Harvard MBA? Sounds dubious...what am I missing?

hoogets25 · Answer

many interesting reasons to discredit these rankings. any reason we should pay attention to them?

3underscore · Answer

Base is significantly higher in early years, bonus potential much less. Evens up as you go up the levels.

"Lifetime" MBA Earnings Ranking

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