Friday, January 11, 2013

Is there still a payoff to the MBA?

Monday's WSJ ran a front page article about how MBAs are having such a tough time in the job market.  Two facts are undeniable: (1) student debt levels are rising and (2) MBA salaries are flat.  This certainly implies that the return on investment has declined.  What it does NOT imply is that the return on investment is zero. 

The article makes the common journalistic fallacy of not asking the key question: compared to what?  For those contemplating the MBA, the key comparison is the income path with an MBA versus the income path without one.  Even if MBA salaries are about the same as they were five years ago, they continue to be considerably higher than salaries of college graduates without a graduate degree. 

Still, the MBA is not an instant ticket to success for everyone.  The article points out that while companies value the skills associated with the degree, they value work experience even more. 

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