Blog
Working Hard for a Big Mac - A Measure of Real Wages Around the Globe
22nd August 2013
An intriguing take here on relative real wages in a range of developed and developing economies - using that staple resource to help teach PPP: the price of Big Macs!
The traditional Big Mac Index looks at the implied PPP exchange rates between countries and the actual exchange rates and uses this data to see if a currency is under or over-valued against the US dollar.
In this article, strategists at ConvergEx Group make a slight modification to the calculation to see how long a worker needs to toil at the prevailing minimum wage in order to be able to afford a Big Mac at the local McDonald's.
In the UK, it's just 20 odd minutes of work before we can start tucking in. But workers on the minimum wage in China need to work almost ten times as long.
Geoff Riley
Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.