Plight of MBAs
Doug French over at the Mises Institute has an interesting article called, "The Plight of the MBA Generation." Essentially, French details the plight of unemployed MBAs over 45 years old. And I've heard plenty of stories from this age group. It's definitely a tough segment of the job market. However, French points out that many of these positions were the result of an endless boom. These folks didn't necessarily make the wrong decision; they were simply following the incentives at the time. But now times have changed, and they have been left behind.
In my opinion, today's labor market demands more skills. Back in the day, one could still get a decent job with a philosophy degree and a good head on their shoulders. Now that doesn't work so well anymore. And the MBA suffers from this same problem. It's hard to identify what skills an MBA student actually possesses. Sure, MBAs are graduate degrees, but they're jacks of all trades. They're usually not particularly good at math or statistics. They've only grazed the surface of accounting. And their skills at valuation and forecasting are quite limited. A strong understanding of the business world isn't really a skill.
During my recent unemployment, I quickly picked up on this new paradigm as well with my Bachelor's in economics. No one really cares whether one can describe the effects of the minimum wage and monetary policy. A strong understanding of economics is good, but it's not really an in-demand skill. It simply does not balance the books or create Excel spreadsheets. Oddly enough, my writing skills, which led to my current employment, weren't learned formally in a college classroom.
So, when I went back to school, I thought about getting an MBA but passed on it. In my job search, I didn't see many openings for the degree. What I did see were openings for tangible skills in the business world... statistics, accounting, financial models, etc. Hence, I decided to acquire a M.S. in finance instead. Understanding the numbers and performing accounting grunt work will always have a market.
So are MBAs worthless? Yes and no. The degree doesn't teach many hard skills, but it does serve as an important signal to employers.
MBAs are often acquired while working full-time, unlike many other graduate degrees. And that's an admirable trait. Employers want the kind of employee who will work 40 hours a week and spend 20 more studying. That shows a strong level of commitment. Sure, they might not have many useful skills yet, but their commitment shows promise for the future. One only needs an average intelligence to get an MBA. However, one needs an above-average level of effort to complete it with a full-time job.
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