The McWages of Nations

Orley Ashenfelter looks at the going rate for flipping burgers around the world:

Ashenfelter devises inventive real-world tests to illuminate labor economics, by Eric Quiñones, Princeton Weekly Bulletin: To address the current debate about whether China’s and India’s growing economies will soon rival that of the United States, Princeton economist Orley Ashenfelter poses a simple question: What is the going rate for flipping burgers?

Ashenfelter is conducting a study of McDonald’s employees’ wages in many countries to illustrate the relative strength of their economies, and early results indicate that developing nations still have a long climb. While the average hourly “McWage” is around $6 in the United States and other western nations, the same job in China, India and other developing countries pays less than 50 cents.

“A Big Mac is the same everywhere. The job is the same,” Ashenfelter said. “What makes a country wealthy is the wage rate that the market can guarantee for someone who wants to work. To most people in the developed world, a $6 job would seem to not be much of an accomplishment — in fact, it is a huge accomplishment that most of the world cannot yet even aspire to.” ...

Comments

[s mehta]

So perhaps the ultimate standardised measure of economic comparison is the time it takes for a McDonald worker to buy a Big Mac? Same job, same product, after all.

A McDonalds worker in the US earns $5/hour and a Big Mac costs $3.15, or 0.63 hours of labor. A worker in China earns $0.5/hour while a burger costs $1.30, costing 2.6 hours of labor, implying an equilibriating rate of Rmb 4.13/Dollar.

[save_the_rustbelt]

In our area the McWage has been over $7 for along time.

Good thing, keeps those former manufacturing workers alive.

[dryfly]

In our area the McWage has been over $7 for along time.

Good thing, keeps those former manufacturing workers alive.

What does... the $7/hr or the occassional free Big Mac?