Comments due by October 30, 2015
As far as investments go, business school is an unimpeachable bet for young professionals who can muster $100,000. MBAs, who are typically in their early 30s and have already spent a few years in the workforce, saw their salaries triple within eight years of graduation. They also report consistently high levels of job satisfaction and career growth, according to a survey of thousands of alumni conducted by Bloomberg Businessweek as part of the magazine’s annual ranking of business schools. But that general contentment hides a troubling divide: Within a few years of graduation, women with MBAs earn lower salaries, manage fewer people, and are less pleased with their progress than men with the same degree.
Each year, we rank business schools by polling students on topics such as academics, career services, and campus climate. We also ask employers about skills they seek in MBA hires and which schools best prepare their graduates. This year, for the first time, we surveyed alumni who graduated six to eight years ago, asking them how well their degrees had delivered on the promise of a fulfilling, well-paid job. The 12,773 responses we collected offer a wealth of salary information and other data on MBAs working in a variety of industries.
The inclusion of the alumni responses helped propel Harvard Business School to the top of the 2015 rankings. HBS alums reported the largest gains in compensation and many attributed their success to their alma mater. Last year’s No. 1, Duke Fuqua School of Business, slipped to eighth overall, partly because of a comparatively lackluster job placement rate of 86.1 percent, which is below the 87.9 percent rate overall.
Women and men start their post-MBA careers earning almost the same money—$98,000 for women and $105,000 for men—according to our survey of those who graduated from 2007 through 2009. But the gap then widens sharply. By 2014 men hauled in a median of $175,000 and women, $140,000. That means employers pay women 80 percent of what men with the same degree take home.
The inequities are especially stark among graduates of some of the most elite programs. At Columbia Business School, ranked No. 6, women who graduated from 2007-2009 earned a median of $170,000 in 2014, or 2.7 times their pre-MBA salary, while their male peers pulled in $270,000, four times what they made before they got their degrees.
Much of the pay gap is the result of the heftier yearend bonuses that men win. When we examined base salaries of alumni and excluded all other forms of compensation, the disparity between men and women shrank significantly. Among Columbia alumni, men made $30,000 more than women in median base salary. Regina Resnick, associate dean of career management at Columbia, calls the disparity “disturbing” but says the divergence “probably reflects what’s going on in the job market.” Says Resnick: “I frankly don’t think there is something unusually different that’s going on with our women.”
One explanation for the gender gap may be that women are less likely to be bosses. Women in our survey say they’re responsible for a median of three employees; men manage five. Twenty seven percent of women say they had no direct or indirect reports, vs. 20 percent of men.
Could it be that women are choosing less financially rewarding fields? It’s true that male MBA grads tend to gravitate toward professions that pay more. Among the alums in our survey, 43 percent of men work in the five most lucrative industries, such as real estate and consulting, vs. 32 percent of women. But even when women went into high-paying fields, they were underpaid relative to men. In finance, women earned a median of $53,200 less than men. The gap persisted regardless of the job they held—women in marketing at a bank earned $7,000 less than men. Women investment bankers earned $115,000 less than men.
Our alumni survey, which drew responses from MBAs at more than 2,500 companies, reveals that the gap is largely consistent across businesses. Among those writing women smaller paychecks are some of the country’s top MBA employers. Google paid the 21 female alums we surveyed a median of $36,000 less than the 68 male alums. A Google spokesperson calls the sample “narrow” and says the company “constantly analyzes performance, compensation, and promotion to ensure that there is no gender pay gap.”
The 14 women we polled at Bank of America made a median of $61,000 less than the 81 men at the company. Ferris Morrison, a spokeswoman for Bank of America, says: “Men and women MBA hires for our entry level programs start at the same compensation within a given line of business, and over time various factors such as job performance, career choices, and location will affect compensation.” At McKinsey, the group of women who responded to our survey was smaller—only nine. They earned $100,000 less than the 47 men at the consulting juggernaut. McKinsey spokeswoman Rachel Grant says the sample of its employees is too small, adding: “Variance in pay could be a consequence of differences in tenure, role, geographic location or performance.”
A company that bucks the trend is Deloitte, which is known for going to extra lengths to keep mothers in the workforce. For the 33 female MBAs at Deloitte who responded to our survey, the typical salary was $169,000—$4,000 more than the 65 men at the firm.
We didn’t ask the alumni we surveyed whether they had children, so we can’t infer what impact parenthood has on earning power. It’s worth noting that 6 percent of women in our sample were unemployed, compared with just 1.4 percent of men.
Research has shown that female MBAs are more likely than men to take time off to raise kids. A 2014 HBS study found that 28 percent of recent female alumni took off more than six months to care for children; only 2 percent of men did. That decision didn’t affect their likelihood of being top managers, the study found, but experts say it could stall salary growth. “When you return, you don’t get paid at the same level as your peers,” says Alison Davis-Blake, the dean of Michigan Ross School of Business. “It’s not gender-based. It would happen to anyone who stopped out, but women stop out a lot more.”
Our alumni survey reveals that almost a decade into their professional lives, male MBAs were happier with their work. Seventy percent of male respondents said they were “very satisfied” in their current job, vs. 64 percent of women. Pay and fulfillment were closely correlated for both genders, so those reporting the highest levels of satisfaction were also the top earners.
If women MBAs feel undervalued at work, they don’t blame their alma maters. Women and men were both likely to say their MBA boosted their earning potential and offered them a valuable alumni network. One reason alums universally praise their MBA programs is that their degree offers incredible value very quickly. Our data shows that six to eight years after graduation, the typical alum makes $169,000. The typical doctor made more—$187,000 in 2012, according to the Bureau of Labor Statistics—but was in school longer and was more likely to take out larger loans.
Business school graduates with student debt owed a median of about $65,000 upon graduation, our survey shows. Borrowers at medical school, by contrast, graduate with $170,000 in debt. By those measures, an MBA may be the professional degree with the quickest return on investment in the U.S. The payoff just appears to be greater if you’re a man.
16 comments:
I am pursuing a master’s degree in business administration so this article was enlightening. Those with a master’s degree in business administration are usually satisfied with their job, job growth, and salary, however, if you are a female with an MBA degree, you do not get these benefits. After graduating, men and women receive similar salaries, but eventually, it comes to a point where men make twenty percent more than their female counterparts. This article states that this is the case because men gravitate toward higher paying jobs and they are the ones that receive the yearend bonuses. I hope I get to work for a company like Deloitte, where women make more than their male coworkers.
Being a female business major and reading these facts, it's somewhat upsetting but at the same time intriguing. Although these numbers and facts prove that women are looked down upon in the business world, actually within the past 10 years women have made incredible strides towards the top of the business chain. More and more women are becoming successful despite the fact that they have lower salaries and wages compared to men in their field. Even though stated in the article, it says men gravitate towards higher paying jobs, I believe otherwise. Anyone in business is all about money, making money, achieving money, just more money. So really anyone in the field of business is looking for the higher paying jobs to accumulate more income than others.
-Eva Hart
This article brings up some very interesting points as well as some controversial ones. I found it interesting that earning an MBA has a relatively quick turn-around in terms of average starting salary being as high as it is. I also found it interesting that the job placement for MBA graduates was very high as well; both points making business school more intriguing. On the other hand the numbers this article brings up about pay stratification between men and women is somewhat alarming. I believe that as time goes on more and more women are entering the business world with MBA's, the differences in salaries will diminish as more women will become bosses. But, this issue of pay differences between men and women can't be tied directly to business as it is a re-occurring theme in many fields nationwide.
-Ari Hymowitz
This blog post intrigued me for many reasons but it really made me think about how much society in changing and although women used to be looked down upon HEAVILY in the business world, there is without a doubt a huge turnaround in the success of women today. Alot of top CEO's still tend to be men but who's to say that in the next 5 to 10 years, that doesn't turn around completely as it has been. Women are gaining equal and even higher degrees than in business than men and it puts us on the market to be just as equally successful workers. Women are just as driven to be successful and wealthy and we are gaining the equal opportunities every day to do just that.
I am looking to get my MBA but still am indecisive on whether I should work first and then pursue it. Without a doubt women progressed each and every year in the corporate world. Although the curve may be skewed in terms of median incomes and so forth, nothing should be taken away from women. It seems that according to the surveys and statistics men have the advantage when it comes to Post-MBA incomes. Obviously some of these are small samples and every firm runs their companies differently than others. Like it was mentioned in the blog, maybe some women chose less paying jobs or less time consuming, strenuous positions in the companies. It is odd though that women with the same degree and experience as men are making significantly less money.
Being a male and reading this article really sends a message of how men have an advantage over women in salary pay. In my opinion there should be no argument as to if women should be paid as much as men after they receive their MBA. YES is the answer because everyone works hard for their degree the same way and take the same classes, so why is it that women get paid less in the end. Is is because of your sex? This article really brings up many questions as to why this is happening and something should be done about it. We are all skin and bones and have the same feelings and wants as each other, what makes them different that salaries should be significantly lower than that of a male.
As a male business major looking to get my MBA i found this article very interesting and up to date on the business world and how it effects the men and women who work within it. In modern times women have moved up very high in the business world now receiving higher positions they wouldn't have been able to receive in the past. All people with the MBA should be paid the same amount due to the amount of work put in to attaining the degree. Your pay and rank shouldn't be determined by sex, race or ethnicity. Sadly this isn't always the way and men most of the time come out on top and women get short changed and sometimes have to take the lesser paying job and jobs lower on the food chain.
-Michael McGuire
This article makes a lot of interesting points of how men and women with the same degree still receive different levels of income. I do think that it is extremely important to get your MBA and it was shocking to me that women and men start off the same but as the years progress make different salaries. It is crazy that even at a company like Google men and women still made different amounts. This survey definitely has some flaws with the amount of men and women surveyed, as well as who has families. In the end it was still pleasing to know that both genders agreed receiving their MBA boosted ther earning power.
-Morgan Ward
As i read i found that this article made valid points on the salaries of men and woman in the same jobs. Even though they start a the same point men end up making more money eventually which becomes shocking under the belief i had that times were different than they used to be. Both genders agreed the higher the education you get the more money you will be able to lean, but its sad that men still have that slight advantage.
As a female business major, it is extremely unfair that men with their MBA get paid more than women with their MBA. After graduation, men and women typically start off making the same salaries, but after a couple of years men make more progress with their salary and women make about 80% of what those men with the same qualifications as them are making. The gap is consistent among all business companies , but as an accounting major I will definitely look more into Deloitte because unlike most companies, they pay their women more than they pay their men employees. I think as the years go on, men and women's pay will start to become more equal because now there are more women pursuing MBAs and working their way up the line.
Sabrina Ruggiero
Although we are taught to preach equality, it is sad to still see that females and males are not looked at as equals in the workforce. This article was interesting and made it very clear that males have the upper-hand when it comes to raises in their salaries. I believe if you have the same qualifications as your co-worker you should be making the same salary, gender should not effect this. I do not agree with the comment that woman aren't looked as to be possible boss candidates. If you achieve such a high degree such as a MBA your salary should not be dependent on your sex.
-Vincent Vasheo
Being a current business student who hopes to pursue his MBA I found this article extremely interesting. The studies the article references proves that those who obtain a MBA have a higher job satisfaction. Much of this is due to a higher salary. The article also brings up the point of a gender pay gap between those with a MBA. Women are still earning less than the men in the same field even though they have the same degree. Women in today's society have come a long way, but sadly they are still being treated unequal. Hopefully the future will bring more equality between men and women.
- Hernan Gallego
I found this article very interesting. Men and Women are earning unequal salaries when they have the same qualifications (college degree and job). The studies that show that some women take off for 6 months to take care of their children and majority of men don't and that men seem to make it to higher positions in their jobs and are happier with their employment. I feel that women have come a long way in the work force and they shouldn't be paid differently than men. But the fact that men may be more ambitious and may devote a little more of their time to the job could be the reason as to why they make more than women in the same position.
-Diamond Melhado
I found this article very interesting. Students with an MBA supposedly have a higher job satisfaction according the article. I felt this was most likely due to the higher salary associated with earning and MBA. I found t interesting that Even With the same qualifications men are earning higher salaries than women. It puts the salary inequality based off gender in perspective
Well if this article doesn't show that there is a pay gap based on gender difference then I don't know what is. It is clear that men earn higher wages across multiple career fields at any rank in the success scale. Women who graduate with the same degree are earning less and are even less happy with their job satisfaction. I find a lot of companies are using scapegoats such as management and performance based reasoning to legitimize the pay gaps. It was said that pay gaps can be blamed on women taking more time off from work then men for family and personal reasons however a study shows that it has no effect on overall job performance or promotional/managerial opportunities. The pay gaps relay a key fact that there is inefficiency in the market and therefore should be regulated to move closer to equilibrium. Once this happens and the pay gaps shrink or disappear there will be more fairness and perhaps a boost in work productivity and satisfaction for women in the work force.
This article talks about which schools better prepared there graduates and the massive MBA gender gap of how much males and females get paid. The gap widens within the more years and its mostly because the bonuses that men get. One explanation for the gender gap may be that women are less likely to be bosses or even that women chooses less financially rewarding fields. Also because of the big difference in gender salary, which men get paid more than woman, it seems that men are able to pay off there debt faster. But i think gender shouldn't matter for what degree you obtain.
-Marchelle Correa
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