Human Collateral: Jobless-MBA Blues

Obtaining an MBA degree is a time-honored route into investment banking, whose popularity surges during downturns when opportunity costs of attending school full-time are low. But if you don't time things just right, you run the risk of disappointment, as Stanford Kaseke is learning to his chagrin.

Kaseke about to graduate with an MBA, has dreams of being a New York investment bank analyst, $20,000 in student loan debt, and no job prospects.

"Things are tough out there," says Kaseke, whose degree from Southern Nazarene University in Oklahoma follows three years as a bank teller and a bachelor's in finance from Oklahoma State University. "I'd hoped a (graduate) business degree would set me apart from someone without a degree, but I'm competing with experienced guys who are either under- or unemployed. Coming fresh from college is an uphill task."

Many 2009 MBA Grads Came Up Empty-Handed

Kaseke's story is far from unique. A recent survey by the Graduate Management Admission Council found just 75 percent of 2009 MBA graduates had jobs upon graduation. Employment rates at even top business schools were down in 2009, with 8.8 percent of Harvard Business School graduates without jobs there months after graduation, up from 3 percent in 2007; University of Chicago's Booth School of Business's recent grads faced unemployment rates of 13.5 percent, up from 2.4 percent; and 29 percent of University of North Carolina's Kenan-Flagler Business School graduates were unemployed three months after graduating, up from just 7 percent two years prior.

Scott (not his real name) feels he is actually worse off now that he earned an MBA from University of Ottawa in March, 2009. Four months later he was laid off from his job as a marketing manager at a technology firm - in part because he was more assertive in making changes, armed with his new degree, he says. "Having an MBA worked against me because I was trying to make the most of my degree," he says. "Because I was trying to shake things up I was one of the first to be let go when they did layoffs." (Caveat: Whether true or not, that explanation is likely to backfire if used in a job interview.)

Six months later he landed an equivalent job - at $10,000 less than his previous salary.

"I expected that given my experience and education I would get a higher level position, but that didn't happen and none of my colleagues from the program have seen a real benefit," Scott says. "The economy is part of it, but I don't think the program holds the value and weight it used to -- so many people are getting MBAs that they're not the exception."

Experience Trumps Education

Like Kaseke, Corinna (not her real name) found that experience can trump education. She enrolled in a London MBA program directly after undergrad in an effort to ride out what she accurately predicted would be an impending economic downturn.

"When the recession hit in the United States, I heard about how bad things were, but it didn't really register - I thought people were blowing it out of proportion," Corinna says. Upon graduation she lined up a "backup" job in London, but became desperate once no U.S. position materialized. Then the backup fell through, too. She has $25,000 in student debt from her graduate degree.

While Corinna had worked at an international law firm before earning an undergraduate degree, she had hoped an MBA would open doors to business development and planning work. Instead she grabbed the only position she could find: a marketing spot at a regional law firm making $50,000. That was $5,000 below the minimum she had set for herself even if she had to take a non-profit position.

"I wish I had worked for five years then gone to grad school," she says. "Real world experience makes you more marketable."

As for the future, Kaseke is optimistic: "The economy seems to be improving, and every day the news says employers are starting to hire." That said, if he can't find a job soon he plans to start classes in September to obtain a Chartered Financial Analyst certification.

Corinna is keeping an eye out for a better job in line with her goals, and says that it may take a decade for her to realize her investment in the MBA. "It is not worth it to go seriously into debt to get a business degree unless you're a top manager at a consulting firm or in finance where you're getting the big bucks," she says.