New evidence the MBA bubble is about to pop

December 20, 2013
December 20, 2013

About a year ago, I published a post titled, “There Are Officially Too Many MBA’s.” Hyperbolic, perhaps, but it’s undeniable that salaries for new MBAs have decreased since the recession, which suggests the market is glutted with business-school grads.

In a new poll reported in Businessweek44% of employers told the Council on Graduate Management Admission they wouldn’t pay more for new MBAs—and might even cut salaries for fresh business-school grads. Another 45% said they’ll just pay enough to keep pace with inflation. Only 65%of respondents were in the US, but it gives you a sense of tepid market for MBAs.

Expected Change in 2013 Base Salaries Compared With 2013

That’s not even worst recent news about MBA hiring.

In November, Michigan State’s Collegiate Employment Research Center projected that recruitment would tumble nearly 25% next near, based on a survey of hiring plans by some 6,500 employers. The center expects a whopping 58% decline in finance, a traditional bastion of MBA hiring. Meanwhile, the center expects hiring to improve for bachelor’s degree and PhD holders.

Is this the sound of a bubble popping or a tiny market correction? We don’t know. But after a decade where MBAs grads grew by an amazing 74%, it’s possible we’re seeing some air being let out of a bubble.

This post originally appeared at The Atlantic. More from our sister site:

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