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Big Mac index fuels minimum wage debate

Noel Hulsman
Photo by: Credit: Lisa Cohen

McDonald's Big Mac
Ah yes, the one that started it all - the iconic Big Mac. Chef Devin Alexander, author of various cookbooks, including The Biggest Loser cookbook series, shares with us her version of the famous burger from her cookbook, Fast Food Fix.

Click here to see the McDonald's Big Mac Recipe.

The world, we're reminded once again, isn't a fair place. Riffing off The Economist's Big Mac Index, New York-based ConvergEx Group just released an analysis of minimum wages around the world, using the iconic burger as their benchmark.

Turns out it takes workers in India almost six hours to afford to bite into a Big Mac, and that's only if they're making what's held as the minimum wage – approximately 28 cents an hour. As low as that is, many working in India are taking home far less, at least according to textile-worker group reports. But more on that later. In stark contrast, it takes roughly 30 minutes, on average, for an entry-level worker in Canada to earn enough to be McLovin' one of those sodium bombs.

This Big Mac as global indicator business all started in 1986 when The Economist magazine used the burger as a way to measure exchange rates, or more specifically, to determine which currencies were overvalued and which were pegged too low. It's long been a source of contention, for instance, that the Chinese government was aggressively undervaluing its currency as a way to goose exports and unfairly compete in world markets. The Economist's Big Mac Index has consistently supported this view, reporting in July that a Big Mac in Chengdu costs the equivalent of US$2.61 vs. US$4.56 in say, Cleveland. (Of course, you'll run across a lot more people in Ohio able to afford a Happy Meal than you ever will in Szechuan, but that's another story.

The ConvergEx research note sent to clients this week tweaks The Economist's approach, and uses the burger as a way to measure minimum wage rates, looking specifically at how U.S wages compare globally. They selected 22 countries -- drawn from every continent -- provided as much of an apples-to-apples comparison as possible.

The results are not altogether surprising. Workers in the West earn far more than their counterparts in Asia and Africa. And as with most things, the people of Sierra Leone and Afghanistan have it the worst. The hourly minimum wage in Sierra Leona is equivalent to 3 cents a hour (U.S. dollars), meaning it takes them the five-and-a-half-days to earn enough to buy a Big Mac. Not that there is a McDonald's anywhere near Sierra Leona, but you get the point. (For those who are interested, the closest would be in Marrakesh, 2,600km away). Afghans have it considerably better, but only by abysmal standards, as it takes the average worker there just over six hours to earn enough to buy a burger.

On the other end of the survey, are the countries from down under, where even a job at Burger King would be enough to finance three or four Big Macs an hour. Australia and New Zealand sit atop ConvergEx's list, followed by the French, the Brits, and then us, in fifth spot. By rights, we really should be in the fourth spot, at least in Ontario, where the minimum wage is C$10.25 and a Big Mac costs only $3.99.

Of course, this is where stats don't always mesh perfectly with reality. ConvergEx's findings presuppose that people actually earn the minimum, which may be a safe enough assumption in the developed world, but is a perilous bet in many emerging economies, as it frequently reported by human rights organizations. But all things being equal, the report is reminder how wealth is distributed in the world.