The country allows lower pay for teenagers, and the labor deal McDonald's struck with its employees currently pays 16-year-olds roughly US$8 an hour, not altogether different from what they'd make in the states. To start, some Australians actually make less than the adult minimum wage. Mickey D's and tack it onto the price of a sandwich, you'd expect customers to be paying at least a dollar more. If you were to simply double the cost of labor at your average U.S. According to the The Economist, Aussies have paid anywhere from 6 cents to 70 cents extra for their Big Macs compared to Americans over the past two years, a 1 percent to 17 percent premium. That said, not every extra dollar of worker compensation seems to get passed onto the consumer. Note Western Europe way out in the upper-right hand corner, with its high McWages and high Big Mac prices. In the United States, industry analysts tend to peg the figure a bit lower-labor might make up anywhere from about a quarter of all expenses at your average franchise to about a third.* But generally speaking, in countries where pay is higher, so is the cost of two all-beef patties, as shown in the chart below by Princeton economist Orley Ashenfelter. Academic estimates have suggested that, worldwide, worker pay accounts for at least 45 percent of a Big Mac's cost. So how exactly do McDonald's and other chains manage to turn a profit abroad while paying an hourly wage their American workers can only fantasize about while picketing? Part of the answer, as you might expect, boils down to higher prices. France, with its roughly $12.00 hourly minimum, has more than 1,200 locations. The company actually earns more revenue out of Europe than than it does from the United States.
The land down under is, of course, not the only high-wage country in the world where McDonald's does lucrative business. On July 24, the country's Fair Work Commission approved a new labor agreement between the company and its employees guaranteeing them up to a 15 percent pay increase by 2017.Īnd here's the kicker: Many Australian McDonald's workers were already making more than the minimum to begin with. So there's a certain irony that in Australia, where the minimum wage for full-time adult workers already comes out to about $14.50 an hour, McDonald's staffers were busy scoring an actual raise. In doing so, they added another symbolic chapter to an eight-month-old campaign of one-day strikes that, so far, has yielded lots of news coverage, but not much in terms of tangible results. Malaysia, the Philippines, and Egypt also price their Happy Meal below two-and-a-half dollars.Last week, fast-food workers around the United States yet again walked off the job to protest their low pay and demand a wage hike to $15 an hour, about double what many of them earn today. Today, the happiest Happy Meal is in Pakistan, cheap and cheerful at $2.11. The Happy Meal began life as a one-off innovation at a Guatemalan McDonald’s in 1979, but was soon homogenized and offered to young gluttons around the world.
The World’s Cheapest Happy Meal is in Pakistan We’ve also used World Bank national income figures to show how these prices measure up relative to local wages. Following our world beer price index, Expensivity has now mapped the price of key McDonald’s meals and items around the world. The cost of McDonald’s varies across the 118 countries where Ronald lays his hat. And if the menu diversified – Masala Scrambled Egg in India Japan’s savoury, potato-based Purple McShake – the commitment to consistent quality prevailed.īut the prices are not so consistent. Soon, the golden arches spread around the world. When travelling salesman Ray Kroc discovered the brothers’ ‘Speedee Service System’ six years later, he decided to sell McDonald’s identical burgers in 1,000 locations around the US. And by focusing on a limited menu, the brothers ensured the hamburger and its sides tasted exactly the same every time. The McDonald’s affordable hunger-buster brought the customers in. That was the price of Dick and Maurice McDonald’s centerpiece hamburger when they opened a stand selling just nine menu items, back in 1948.