Burgernomics: America Still Tops Big Mac Index
Americans can buy more McDonald’s Big Macs per hour than workers in any other country, according to The Economist’s annual (semi-serious) index of purchasing power parity. The news comes just as the WageIndicator Foundation announces that U.S. workers earn the highest hourly wages in the world. That’s all well worth celebrating in a month when we patriotically commemorate the nation’s birthday.
The Economist introduced the Big Mac Index 27 years ago as a half-joking illustration of the purchasing power parity between currencies. The magazine has published the index annually ever since, providing us all with a test of how market exchange rates affect the value of goods in different nations.
Somewhere along the way it expanded the concept to include the amount of time the average worker would have to work to make enough dough to buy a Big Mac.
You could say the burger-based measurement makes the exchange-rate theory easier to digest.
“As Americans celebrate the
The average price of a Big Mac in the U.S. in early 2013 was $4.37, according to the index. In China, it was $2.57. That shows that the yuan was undervalued by 41 percent.
U.S. workers held a gross hourly wage of $24.50, the index continues. That means they could theoretically buy 4.1 Big Macs an hour (which we don’t advise, but to each their own!). That beats the United Kingdom’s 3.5 Big Macs an hour with their median gross hourly pay at $19.60.
To view results for other countries, visit The Economist’s explainer page here.
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