People across the world wish to pursue a master’s in business administration, known as an MBA. An MBA from an American school is often highly sought after, and when we look at the MBA salary in USA, it’s clear why. One of the driving factors is the fact that an MBA degree salary affords graduates higher earnings than those without the degree. Plus, it opens up more career opportunities.
In this article, we will look at the average MBA salary and why an MBA salary is so highly sought after. We will also reveal what factors affect the salary one gets after the MBA degree.
What is a post-MBA Degree Salary?
According to a recent survey from MBA.com, employers in America plan to provide their new MBA hires with a median starting salary of $115,000. For professionals in the field already, that figure hovers around $95,000 and is even higher than those with a bachelor’s degree, who can expect to earn an average of $65,000.
The MBA salary in the USA is understandably higher than the salary of those with an undergraduate degree alone.
What Factors Affect the post-MBA Salary?
There’s no doubt that an MBA will positively impact one’s earning potential, but the question often arises as to how much it will do so.
There are various factors that affect one’s MBA salary. Let’s take a look at the typical variables that you can expect to determine one’s MBA salary:
The industry in which one chooses to work will have a direct impact on their earning potential.
There are different areas of business that offer higher salaries. For example, here are some industries with the highest average starting salaries (based on data from a US News & World Report):
- Consulting: $152,470
- Financial Services: $129,889
- Technology: $124,289
Check out this guide that shares more about MBA graduates’ career opportunities and expected salary levels based on job title.
The institution from which you earn your MBA may impact earnings, depending on your position. Students who graduate from Ivy League schools are more likely to earn more.
For example, the post-MBA highest salary offering university is Stanford Graduate School of Business. Out of this program, the average 3 months post-grad salary is about $152,503. That’s not saying that is the most an MBA degree holder can earn because the number is technically limitless depending on one’s career prospects. It’s just to show how much potential there is for an MBA degree holder to make shortly after obtaining the master’s degree.
The cost of living depends on where you are located. For example, you can expect that the standard of living in a big urban city like Los Angeles will be more than a rural area in the outskirts of Georgia. As such, salaries coincide with the average cost of living, which means that if you choose to get a job in a relatively more expensive living location, then your salary will be higher, too.
As we already mentioned, graduates with an MBA will earn a higher average salary than those who are direct-from-industry. However, the salary potential of a graduate degree holder coupled with more professional experience will be ever grander than one who is just starting out in their career. Generally speaking, the more experience you possess, the more you can expect to earn.
Does Having an MBA Increase Your Earnings?
The resounding answer from what you’ve already read and all the data out there is: yes!
TransparentCareer analyzed MBA graduates’ salaries from 2009 to 2018 and found that having an MBA increases salary earnings by an average of $36,742. The survey took into account 11,444 salary data points, with 44.9% pre-MBA salaries and 55.1% post-MBA salaries. On the whole, the extra $36,742 average increase represented an almost 50% increase in compensation.
Since salaries vary by industry, the average increase with an MBA does, too. To illustrate, the survey reported that the top industries in which an MBA has the biggest effect on salary are:
- Consulting: $46,414 increase (+53.85%)
- Food, Beverage, and Tobacco: $41,249 increase (+65.40%)
- Investment Management: $38,844 increase (+47.07%)
To view the full list, click here.
Earning Your MBA Online
With the rising cost of education, many people will question whether earning an MBA is worth it. We compiled what you should consider when making the decision to earn your MBA.
As you can see, an MBA can increase your earning potential greatly. But, at the same time, you don’t want to go broke to get the degree. The good news is that you can earn your MBA from an accredited, online institution like the University of the People.
All of our degree programs are tuition-free. There are some fees associated with assessments and a one-time application fee. That being said, you will be able to earn your MBA for a fraction of the cost that you’d have to pay at a traditional on-campus institution. The University of the People’s MBA program costs an estimated $3,660. Should you have a financial need to cover these costs, you can take advantage of financial aid and/or scholarships and grants.
Want to know what it’s like to study for an MBA at the University of the People? We’ve spilled the details here.
The Bottom Line
Having an MBA degree comes along with earning an MBA degree salary, which is a major upside. By knowing more about what you can expect to earn with an MBA degree, you can decide whether or not to pursue the degree based on your career goals.
Having more education and higher degrees will always prove to be beneficial. It’s no wonder why an MBA is consistently ranked as one of the most popular master’s degrees to get.