Business administration is always a strong contender for honors as the most popular college major. This is no surprise since students think business is the way to making big bucks. But is business administration really as lucrative as students and their parents believe? Nope.
In a new survey by PayScale, Inc. of salaries by college degree, business administration didn’t even break into the list of the top 10 or 20 most lucrative college degrees. A variety of engineering majors claim eight of the top 10 salary spots with chemical engineering ($65,700) winning best for starting salaries. Out of 75 undergrad college majors, business administration ($42,900) came in 35th, behind such degrees as occupational therapy ($61,300), information technology ($49,400), and economics ($48,800).
a. Why do college graduates with different majors have drastically different starting salaries?
b. Draw a graph of the labor markets for economics majors and business administration majors to illustrate your explanation of the differences in the starting salaries of these two groups.