In Seattle, a $17.27 hourly minimum wage for large employers means we earn more. However, we also pay more for a Big Mac:
Still, in NYC where the minimum wage is $15, a Big Mac could be $4.95. It will also cost less in China.
Big Mac Prices
According to McDonald’s menus, a Big Mac would have cost us approximately 45 cents during the 1960s. Hopscotching among decades, we have the 1970s Big Mac at 65 cents and then $1.60 during the 1980s. I am guessing that the leap was because of the last great inflation during the early 1980s.
Through its twice-yearly Big Mac Index, The Economist lets us compare currencies through Big Mac prices. In its July report, The Economist tells us that the average Big Mac price was $5.15. Comparing below, you can see that we will pay much more for a Big Mac in Switzerland because the Swiss Franc is overvalued by 30.3 percent.
Top 10 Most Expensive Big Macs
Meanwhile, The Economist suggests that Turkey’s lira is 48 percent undervalued.
Bottom 10 Least Expensive Big Macs
Showing us the domestic price picture, the National Restaurant Association reported that, at 7.2 percent, the 12-month July to July jump in average limited-service menu prices (fast food) has declined from an 8 percent high:
Our Bottom Line: Purchasing Power Parity
When we compare economies, it can be helpful to recognize PPP (purchasing power parity) differences. Oversimplifying a bit, PPP is just a comparison of how much a basic currency unit can buy. We saw several days ago how the U.S. has the world’s biggest GDP. However, through a PPP lens, China’s is larger because of their lower prices. In other words, although GDP totals are less, they can represent more purchasing power.
With a Chinese Big Mac priced at $3.56, we can see the PPP differences. Giving us more burger for the buck, they have an undervalued currency.
My sources and more: I just realized it was time to go to the Big Mac Index for our twice-yearly look at Burger Economics. From there, the National Restaurant Association, Statista, and Axios provided more insight. I also checked Seattle’s minimum wage here. Please note that we’ve quoted past Big Mac prices from a previous econlife post.