Is an MBA Bubble Popping?

By Jordan Weissmann

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 Businessweek, 44 percent of employers told the Council on Graduate Management Admission they wouldn't pay more for new MBAsand might even cut salaries for fresh business-school grads. Another 45 percent said they'll just pay enough to keep pace with inflation. Only 65 percent of respondents were in the U.S., 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 percent next near, based on a survey of hiring plans by some 6,500 employers. The center expects a whopping 58-percent decline in finance, a traditional bastion of MBA hiring. Meanwhile, the center expects hiring to improve for bachelor's degree and Ph.D. 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 percent, it's possible we're seeing some air being let out of a bubble.

This article available online at:

http://www.theatlantic.com/business/archive/2013/12/is-an-mba-bubble-popping/282541/