{"id":1383,"date":"2026-06-25T19:07:35","date_gmt":"2026-06-25T17:07:35","guid":{"rendered":"https:\/\/mbafamily.org\/?p=1383"},"modified":"2026-06-25T19:07:37","modified_gmt":"2026-06-25T17:07:37","slug":"are-mbas-helping-drive-the-modern-inequality-crisis","status":"publish","type":"post","link":"https:\/\/mbafamily.org\/index.php\/2026\/06\/25\/are-mbas-helping-drive-the-modern-inequality-crisis\/","title":{"rendered":"Are MBAs Helping Drive the Modern Inequality Crisis?"},"content":{"rendered":"\n

While I don\u2019t believe most of us think<\/em> our MBA educations have contributed to the lowering of wages for employees in Europe and America, we may be in for a shock.  The data around this question is actually quite clear\u2014and yes, as a group, business leaders and managers with business degrees are complicit in the inequality crisis.  <\/p>\n\n\n\n

Daron Acemoglu is an Institute Professor at MIT and a 2024 receipient of the Nobel Prize in Economics.  In 2022, together with Alex Xi He and Daniel le Maire, he wrote a paper titled, \u201cEclipse of Rent-Sharing: The Effects of Managers\u2019 Business Education on Wages and the Labor Share in the U.S. and Denmark\u201d.  This ground-breaking research demonstrated that, in both Denmark and the United States, when a company has a CEO that leaves or retires and is replaced by a manager with a business education , there is usually a relative decline in wages and labor\u2019s share of income. Within five years, the wages of workers at firms with business school managers are about 6 percent lower than comparable firms in the U.S. and 3 percent lower in Denmark.  At the same time, the business managers who had MBAs enjoyed pay raises, earning 5 to 8 percent more than their non-business-school peers.  The data shows money in these businesses flows up from workers to managers. <\/p>\n\n\n\n

The Ideology Change in Business Eduction<\/strong><\/p>\n\n\n\n

What is it in business education that can be driving this?  Professor Arindrajit Dube of the University of Massachusetts at Amherst writes in his book, The Wage Standard (released this year), that a fundamental change in business education occurred during the late 1970s.  It was during that time that business education started to become dominated by the ideology of shareholder primacy.  The year 1979 is particularly significant because it’s when leading corporate finance textbooks used by MBA programs \u2014 including Brealey and Myers (1980) and Copeland and Weston (1979) \u2014 began explicitly teaching that the goal of managers should be to maximize shareholder value. Dube argues that, uder this influence, some managers started viewing workers not as stakeholders in the corporation but as sources of costs to be reduced. <\/p>\n\n\n\n

The “Rent Transfer” Argument \u2014 Not Efficiency<\/strong><\/p>\n\n\n\n

The obvious counter-argument to these findings is that MBA-trained managers are simply better at running companies \u2014 that leaner wage bills reflect genuine efficiency gains. Dube\u2019s response to this is: the data suggest a shift to MBA leadership has no effect on productivity compared to comparable businesses. So it’s purely a rent transfer. Money is taken from one group and given to another. In this case, money goes toward owners of capital and high-income managers, and away from workers, especially blue-collar workers. <\/p>\n\n\n\n

Acemoglu explains it this way: profits are recently at an all-time high, and productivity growth has been decent, yet wages for workers with a high school degree grew about 2.5 percent per year in real terms between 1945 and the late 1970s \u2014 but have been declining in real terms every year since 1980. Prroductivity gains are real; they’re simply not being shared as much in companies with business-educated managers.<\/p>\n\n\n\n

The Lesson for the Current Transition in Poland<\/strong><\/p>\n\n\n\n

Given the current era of business transtitions in Poland, with owner\/founders who started out in the 1990s now looking to retire, it may be worth considering the implications of the work done by Acemoglu and Dube.  With the change in senior management from owner\/operators to business-educated managers, is Poland at risk of accelerated wage inequality and a reversal of the massive gains in equality that have occurred since the early 2000s? It is worth drawing the lessons now for those of us in business management roles in Poland. What values and priorities are we going to follow moving forward with the businesses and employees we manage in the future?  <\/p>\n","protected":false},"excerpt":{"rendered":"

While I don\u2019t believe most of us think our MBA educations have contributed to the lowering of wages for employees in Europe and America, we may be in for a shock.  The data around this question is actually quite clear\u2014and yes, as a group, business leaders and managers with business degrees are complicit in the inequality crisis.   Daron […]<\/p>\n","protected":false},"author":5,"featured_media":1384,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"off","_et_pb_old_content":"\n

While I don\u2019t believe most of us think<\/em> our MBA educations have contributed to the lowering of wages for employees in Europe and America, we may be in for a shock.  The data around this question is actually quite clear\u2014and yes, as a group, business leaders and managers with business degrees are complicit in the inequality crisis.  <\/p>\n\n\n\n

Daron Acemoglu is an Institute Professor at MIT and a 2024 receipient of the Nobel Prize in Economics.  In 2022, together with Alex Xi He and Daniel le Maire, he wrote a paper titled, \u201cEclipse of Rent-Sharing: The Effects of Managers\u2019 Business Education on Wages and the Labor Share in the U.S. and Denmark\u201d.  This ground-breaking research demonstrated that, in both Denmark and the United States, when a company has a CEO that leaves or retires and is replaced by a manager with a business education , there is usually a relative decline in wages and labor\u2019s share of income. Within five years, the wages of workers at firms with business school managers are about 6 percent lower than comparable firms in the U.S. and 3 percent lower in Denmark.  At the same time, the business managers who had MBAs enjoyed pay raises, earning 5 to 8 percent more than their non-business-school peers.  The data shows money in these businesses flows up from workers to managers. <\/p>\n\n\n\n

The Ideology Change in Business Eduction<\/strong><\/p>\n\n\n\n

What is it in business education that can be driving this?  Professor Arindrajit Dube of the University of Massachusetts at Amherst writes in his book, The Wage Standard (released this year), that a fundamental change in business education occurred during the late 1970s.  It was during that time that business education started to become dominated by the ideology of shareholder primacy.  The year 1979 is particularly significant because it's when leading corporate finance textbooks used by MBA programs \u2014 including Brealey and Myers (1980) and Copeland and Weston (1979) \u2014 began explicitly teaching that the goal of managers should be to maximize shareholder value. Dube argues that, uder this influence, some managers started viewing workers not as stakeholders in the corporation but as sources of costs to be reduced. <\/p>\n\n\n\n

The \"Rent Transfer\" Argument \u2014 Not Efficiency<\/strong><\/p>\n\n\n\n

The obvious counter-argument to these findings is that MBA-trained managers are simply better at running companies \u2014 that leaner wage bills reflect genuine efficiency gains. Dube\u2019s response to this is: the data suggest a shift to MBA leadership has no effect on productivity compared to comparable businesses. So it's purely a rent transfer. Money is taken from one group and given to another. In this case, money goes toward owners of capital and high-income managers, and away from workers, especially blue-collar workers. <\/p>\n\n\n\n

Acemoglu explains it this way: profits are recently at an all-time high, and productivity growth has been decent, yet wages for workers with a high school degree grew about 2.5 percent per year in real terms between 1945 and the late 1970s \u2014 but have been declining in real terms every year since 1980. Prroductivity gains are real; they're simply not being shared as much in companies with business-educated managers.<\/p>\n\n\n\n

The Lesson for the Current Transition in Poland<\/strong><\/p>\n\n\n\n

Given the current era of business transtitions in Poland, with owner\/founders who started out in the 1990s now looking to retire, it may be worth considering the implications of the work done by Acemoglu and Dube.  With the change in senior management from owner\/operators to business-educated managers, is Poland at risk of accelerated wage inequality and a reversal of the massive gains in equality that have occurred since the early 2000s? It is worth drawing the lessons now for those of us in business management roles in Poland. What values and priorities are we going to follow moving forward with the businesses and employees we manage in the future?  <\/p>\n","_et_gb_content_width":"1080","footnotes":""},"categories":[18],"tags":[],"class_list":["post-1383","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles"],"_links":{"self":[{"href":"https:\/\/mbafamily.org\/index.php\/wp-json\/wp\/v2\/posts\/1383","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mbafamily.org\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mbafamily.org\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mbafamily.org\/index.php\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/mbafamily.org\/index.php\/wp-json\/wp\/v2\/comments?post=1383"}],"version-history":[{"count":5,"href":"https:\/\/mbafamily.org\/index.php\/wp-json\/wp\/v2\/posts\/1383\/revisions"}],"predecessor-version":[{"id":1391,"href":"https:\/\/mbafamily.org\/index.php\/wp-json\/wp\/v2\/posts\/1383\/revisions\/1391"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mbafamily.org\/index.php\/wp-json\/wp\/v2\/media\/1384"}],"wp:attachment":[{"href":"https:\/\/mbafamily.org\/index.php\/wp-json\/wp\/v2\/media?parent=1383"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mbafamily.org\/index.php\/wp-json\/wp\/v2\/categories?post=1383"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mbafamily.org\/index.php\/wp-json\/wp\/v2\/tags?post=1383"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}