How Many Big Macs Is a New Yorker’s Time Worth?
At a McDonald’s in Manhattan, a minimum wage worker can afford around two Big Macs for every hour they work. By the start of 2019, that same hour could buy three of the iconic hamburgers.
This, of course, is the hope of new minimum wage increases across the state: to give low-wage workers more bang for their hourly buck. By virtue of Big Macs alone, New York’s minimum wage workers may soon have a purchasing power that rivals workers of similarly wealthy nations. Australian workers currently earn the equivalent of 3.26 Big Macs per hour worked; meanwhile, the Irish can claim 2.48.
Most workers in the U.S., however, lag far behind their foreign counterparts.
David Howell, a professor of economics at The New School, thinks Big Macs can be useful in comparing the buying power of U.S. workers with that of peers abroad. Howell amalgamated data from six affluent nations that have a federal minimum wage to show the value of a low-wage worker’s time. The results were unequivocal: U.S. employees have to dig deeper to afford the fast food staple.
“I think we can learn from abroad — from what other countries do better,” says Howell, who admits the simplification doesn’t tell the whole story. Traditional measures of purchasing power are complicated, taking into account wide-ranging price indices. By limiting the comparison to one set of workers and one product, Howell was able to communicate the problem in short order.
“It’s a pretty efficient graph,” he says. “It suggests American workers get paid less in real terms.”
According to Howell’s calculations, which appear in a paper from the Washington Center for Equitable Growth, U.S. minimum wage workers can only afford 1.51 Big Macs with an hour’s pay. Why so few? One factor is that the domestic wage floor is relatively low compared to other rich nations. The other is that the price of a Big Mac is actually higher in the U.S. than in the other six countries that Howell examined. This may come as a surprise, since it is often assumed that consumer goods, especially food, are cheaper in the highly competitive U.S. market.
Both domestically and abroad, starting hourly wages at McDonald’s Corporation tend to align closely with the local minimum wage. It’s no wonder, then, that much of the momentum around the “Fight for $15” — a movement to raise the national minimum wage to $15 per hour — stemmed from demonstrations by fast food workers in the summer of 2015.
Democrats officially adopted a $15 federal minimum wage as part of the party platform in July, and both New York and California have implemented plans to set the floor at $15.
Increasing pay is a powerful tool to improve purchasing power, but a minimum wage alone can’t guarantee workers a higher quality of life. New York City Mayor Bill deBlasio echoed this sentiment on Sept. 15 when promoting legislation that would curb unfair scheduling practices in the fast food industry. DeBlasio cited the $15 minimum wage, affordable housing and pre-K education as the city’s primary avenues to give the working class a boost.
As part of that initiative, minimum wage employees at big businesses in New York City will see their pay increase 43 percent over the next three years.