How does the cost of living impact salary differences between MBAs in the UK, US, and Europe?

Question

Nitin Chauhan · Accepted Answer

Understanding the differences in MBA salaries requires consideration of the country's cost of living between the UK, US, and Europe. Salaries can be highly stratospheric in certain places, but the local cost of living can greatly diminish the purchasing power of such money.
Let us take the United States as an example. The states' highest-paying cities for MBAs are New York and San Francisco, who often quote above $100,000 a year. However, the living cost, particularly accommodation, is steep for these cities. Alone, rent in New York can pretty much eat up quite a sizeable chunk of a salary. The average monthly rent for a small apartment ranges from $2,000 to $4,000. So, although the salary might be hefty, living costs can soon take up much of the income of an MBA graduate.
In the UK, especially in London, pay for MBAs is relatively competitive in the range between &pound;60,000 and &pound;80,000. London is a pricey city, almost in line with New York; the rent, combined with transportation costs, significantly eats into an otherwise impressive salary. Monthly rent in central London will be around &pound;1,500 to &pound;3,000, leaving living costs eating into disposable income. However, other UK cities, such as Manchester or Edinburgh, can provide a much lower cost of living and enable an MBA holder to stretch the salary further.
However, excellent salary for MBA graduates are also to be found in countries like Germany and France, of around &euro;60,000 to &euro;90,000. While costs of living in Paris and Munich are higher, still manageable in comparison to major cities in the US. In Paris, one could rent an apartment at &euro;1,000 to &euro;2,000 a month, far cheaper than New York or London.
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