Hey there,
I am back again with yet another perspective on the post MBA Salaries debate in schools.
To those of you who need a reference to the figures I am going in with, please refer to the website of the respective schools.
For the simplification here I am taking two schools into consideration- Rice University and MSU. Two different states, nearly the same post-MBA gain (Refer Forbes). One has a localised Houston Network, other has great network in Chicago and Detroit.
Let's get started.
Let's say a person gets a job in a consulting firm with a average salary given on the websites as 140k each approx.
Now, we all know that there are state tax for income and other tax crap that you need to see before filing for taxes and stuff.
Quite frankly, in India, my income is too low for me to be eligible to pay taxes but there is a tool that you can use to calculate the income after tax you can refer
here for Texas and
here for Illinois.
Just put in your offered income, 140k in this case and then press enter.
Surprisingly, you will see- Texas income is 10k more than Illinois.
That is yearly of course. If you assume a similar increase in income over the years, you might make more here.
Another interesting factor is the cost of living. Quite frankly I have never seen that the cost of living in all regions are same but in Houston, Dallas, Austin (real estate is changing there so I don't know for how long), San Antonio, etc have decent living costs for a similar kind of Real Estate in Chicago. Also, needless to say that the living style and the sun makes it a catch and a more efficient place than the snowy areas.
I am not favouring Tx entirely. It is just an example here. You can do more drills with different states.
So overall, much as I have seen, there is a $300-500 difference in the monthly living costs.
Imagine the average for a year, $3600 yearly gain.
Real estate cost rise at a very small pace and hence you can imagine a stable gain.
That brings you to- $13.6k annual gain.
So if you are in fact looking and comparing the Salaries of a similar range. Leeway of 15-20k should be adopted and you should take that into consideration when calculating the opportunity costs.
I did the similar analysis for the Salaries in Canada. Surprisingly, the after tax income of all the schools come down to the same kind of range with a marginal gap in pay.
Overall US pay is higher and savings in US far exceed Canada if you choose the right location for you job.
This analysis can be helpful when you are considering offers between two or more Universities
bb NikhilDo you think this post is unique or have there been posts like these?