Burger Time

One of my earliest jobs as a teenager was working the window of a local McDonalds during the summer.  It was a pretty good gig with free lunch included.  The pay was decent and upward mobility allowed one to move up to cook.  I missed that opportunity, choosing an education instead.  That was back in the mid-sixties when the company had already sold over one billion burgers.  Their annual report now shows they sell well over twice that many every year or roughly 75 hamburgers each second.

You will find McDonalds locations almost everywhere.  The Daily Telegraph reports England’s queen owns one near Buckingham Palace.  They are in at least 119 different countries and still growing fast.  The company plans to open one a day in China alone for the next three years according to Reuters.  Since their strict control of quality and the production process gives rise to remarkable consistency, this global ubiquity allows us to make some interesting comparisons.

Comparing the relative value of currencies can tell you little about the cost of goods when traveling abroad.  Purchasing power parity is a concept which allows us to compare how much a similar item costs in dollar terms throughout the world.  Since the Big Mac is essentially identical wherever one goes, it makes an ideal candidate for this technique and a Big Mac index is provided periodically by The Economist.  Their latest report says such a delicacy runs $4.20 on average here in the states.  At $2.44, it’s a steal in China.  Latvia will set you back three bucks on the nose.  Hold on to your wallet in Brazil where you’ll pay $5.68, and in Switzerland, tack on just over another bill.

Since production is tightly regulated, the time needed to make a Big Mac hardly varies from one venue to the next.  This allows us to look at wages in a different light as well. According to a recent Wall Street Journal report, the average McDonalds employee must work about 25 minutes to buy a Big Mac in the U.S.  In Canada it takes a couple of minutes less.  The Chinese employee will labor almost 80 minutes and in India don’t count on eating until you’ve slaved over their hot stove for more than three hours!

By itself, McDonalds is the 90th largest economy in the world, serving roughly 1% of the global population every day according to Societe Generale.  Given this size and scope, we are able to glean a good bit of useful economic data from the company’s reports, allowing us to better understand how countries and people around the world are really doing relative to one another.  It’s really something you can sink your teeth into don’t you think?