Wednesday, May 2, 2012

Big Maconomics: How McDonald's Explains the World

Derek Thompson over at the Atlantic posted an interesting piece on how the price of Big Macs combined with hourly wages of McDonald's employees can give quite a bit of insight into real-wage growth for middle class laborers across countries and time. Also a great quote on really just how massive the increase in productivity has been over the past few centuries:
For thousands of years, families devoted the majority of their lives to food. Their waking hours were spent growing and harvesting crops, and most of their income from growing and harvesting went right back into eating. Deep into the late pre-industrial era, unskilled laborers worked grueling hours in fields to earn an income that could often barely feed their family. As Gregory Clark explained in his book A Farewell to Alms, up until the 1700s, the English diet consisted, monotonously, of mostly bread and beer, won only after hours that would make a modern i-banker blush. Food output per person was so meager that "British farm laborers by 1863 had just reached the median consumption of [primitive] forager and subsistence societies."

Today, food is faster. The Big Mac takes very little work for any one person. It is a product of as much automated manufacturing as human labor. Even U.S. food-prep workers, by some measures the poorest-paid major occupation in America, earn enough to buy more than two Big Macs -- that's 1,000+ calories -- in just an hour of their work.

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