How a teacher or retail assistant manager makes more money than a Harvard MBA

Takeaway: A graduate with a Harvard MBA may make more money overall compared to other graduates—but when you look at how much each gets paid on an hourly basis, it’s easily possible for someone else to make more than a Harvard MBA. Harvard Business School graduates can make two or three times as much as everyone else—but they often also work double or triple the hours.

Estimated Reading Time: 2 minutes, 9s.

The average graduate of Harvard Business School makes about $120,000 a year. Neil Pasricha would know—he graduated from the school with an MBA, is now an executive at Wal-Mart, and perhaps most notably, is the acclaimed author of The Book of Awesome. He also has a new book out, which I think you’ll love named The Happiness Equation.

One of my favorite nuggets from this book is how he explores the relationship between time, money, and happiness.

In his book, Neil writes about how so many of his fellow graduates took a different path than him. He says they would often be “working on consulting gigs in a Chicago hotel room or slaving away on an investment banking deal” to earn big bucks. The average Harvard graduate with an MBA makes $120,000 a year, and they usually put in enough hours every week to justify that amount.

But that’s the thing, Neil argues—that they put in the hours. In The Happiness Equation, Neil features a chart that illustrates this point. While a Harvard graduate makes a truckload of money every year, that doesn’t come without sacrifices—especially time. In fact, given how many hours she or he may work, a Harvard MBA may not make any more money than a retail manager or a teacher (especially when lots of traveling is involved):

Edit: I’ve received several email from folks who argue that this idea misses the mark when it comes to teachers—that most teachers work much more hours than 40 a week. After looking at the data, I agree. This idea doesn’t hold up for everyone—maybe it does in some cases in Canada, where the educational system is so different; I asked my friends who are teachers in Canada (five of them), and the average of their numbers is 45 hours a week. But the idea likely doesn’t apply in most cases in the U.S. (Still waiting to hear from a Retail Assistant Manager!) That said, I’d still argue that the idea of measuring your salary by the hour is a vital one.

Harvard MBA-RZ

This idea works into what I consider to be the purpose of productivity. In my view, investing in productivity is crucial because by completing everything we have to do in less time, we carve out more time for what’s most meaningful to us. This way, we can work a big job that we bring a lot of focus to—and still have some time, attention, and energy left over when we come home for our loved ones. (We might even have a few hours to watch a little Netflix, too.)

While people have been shown to work fewer hours than they think they do—the average person who claims to work more than 75 hours a week actually works less than 55—the point still stands.

Working is a way of exchanging your time for money. But it doesn’t make sense to just consider how much you’ll make over the span of one year—especially when every single job calls for a different level of commitment.

When you consider your job, or evaluate new ones, it’s important to keep that in mind. As Neil puts it, like it or not, “every single job is paid by the hour.”

  • Laura Q Johnson

    I have never known a great teacher to work less than 60 hours per week. Even if you consider their summer break (generally 2 months, not three), they would work roughly 2520 hours per year. An average office worker would work 2080. Students might get three months off, but teachers have to tear down the classroom after students leave for the year, and set back up before the next crop comes in.

    • Hi Laura — I totally agree with you. I’ve added an addendum smack dab in the middle of the post about this point.

  • Jane Smith McCain

    Not sure you hit it right on the Teacher’s work hours per week. When you add planning, grading papers, money spent on classroom supplies (out-of-pocket), tutoring after school, meetings after school…the number of work hours per week goes up dramatically! I know. I was a teacher for over 25 years. And many teachers spend their Summer Break doing things for the school… planning, cleaning, Summer School Teaching, DayCare, etc. Wish I could have done all that had to be done in 40 hours per week! Ha! :)

    • Hi Jane — After digging into the numbers, I agree with you 100%. I’ve added an edit to the post to make that point :-)

  • Conna Meader

    I have a feeling that you will hear a lot about this, but the comparisons to teachers is completely inaccurate. First of all, teacher’s don’t get vacation, they only get paid for their “contract days”, about 190 days or about 38 weeks a year. Secondly, no teacher worth their salt only works 40 hours a week, nor only 190 days/38 weeks. I work an average of 65 hours (high, for sure) during the school year. At this rate, if I actually got paid 45k, I would make 16.50/hour. But let’s just say that teachers average (in the true sense of the word average) 50 hours per week at 42 weeks per year : they would be making $21/hour. Because they too *put in the hours*. Disappointing at the very least to see these inaccuracies perpetuated by a Harvard MBA grad, though not surprising, because the issue is way more complicated than all this but in the interest of productivity, I won’t go into all of that now.

    • Hi Conna — I totally agree with you, especially after chatting with a few friends who are teachers (which I truthfully should have done before posting!) Thanks so much for the feedback. I’ve added an addendum right in the middle of the post about how this idea likely doesn’t apply to teachers.

  • Welp, looks like I wasn’t the only one to pipe up about the teachers! You can ignore that email I sent you… :D

  • nikmac

    Speaking from Australia, and I have heard anecdotally that it’s the same in the US and UK, if you think that teachers actually vacation for those whole 12 weeks you clearly don’t know any teachers very well. This is separate to the hours/week issue. I’m a lawyer and my husband is a teacher and while I have not quantified it, I would never for one second believe that he works any less than I do over the course of a year. He certainly works more than 40 hours in any given week during term.

  • Neil Pasricha

    Appreciate this, Chris! Love all the comments. Great dialogue.

    The numbers are meant to be estimates, of course, but I do stand by them. My dad (a retired public school teacher of 25+ years) and my wife (a public school teacher for 5+ years) wouldn’t have let me write something way off from what they see and do! In fact, the numbers originally came from conversations with their peers and coworkers. (In the book, I have additional context surrounding this table.) Seeing Chris’s note above — that his quick sample was 45 hours — shows it’s not far off.

    Now, having said that, I have had many teachers in my life who go way above and beyond — like some of the commenters — and seen plenty of Harvard MBAs who don’t take consulting / banking / private equity jobs with crazy hours. The point isn’t that the numbers will line up perfectly. Some teachers work 85 hours. Some Harvard MBAs work 40.

    The point is to create a framework showing how to overvalue your own time by measuring and comparing a better variable than annual salary — dollar per hour + resulting time available outside of work. I’m saying those are the two dials more important to know and own rather than the salary figure we more often compare….

  • Jim

    When working at an investment bank, colleagues would throw around similar calculations. Funny how everyone thinks the other guy works X-hours per week – week in/week out. Unless there is a clock and threats to prevent overtime, it just never happens. Anyways, the other metric we were interested in was $ per *discretionary* hour (outside of work). Being at work saves money in some sense. If you have a lot of free time, but little money it kind of forces you into cheap $/hr entertainment like netflix or video games, which has its own life impact.

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