I sure do still love a Big Mac. About twice a year, on the long drive to wherever, hubby and I might drive through a Mickey D.'s and it's inevitable that I order the Big Mac, and he orders two double cheeseburgers. It's always a bit messy to eat while driving, the lettuce falling out, the patties sliding around and the special sauce dripping though my fingers as I take big bites. Even without my eyes closed (I'm driving!) it always takes me back to childhood. I know I'll never forget my first visit to the Golden Arches in 1977 shortly after my arrival. Ah, that taste that hasn't changed much, that feeling of comfort and youth and....it is smaller though, I know, it's not just that my hands are bigger now. Anyway, let's get to the point. This is not a Big Mac index about foreign currency exchange values. I want to show you what they don't teach you in high school any more, real plain and simple.
The first column shows the year, the second the Federal minimum wage in that year, the third the price of a Big Mac in that year, and the last one tells how many Big Macs you could purchase with one hour of those minimum wages. (info commonly found on internet, I'm not going to footnote google) Let's look now:
Year Wage/hr. Price Big Macs
1977................................$2.30..............................$0.95...................................2.42
1982..................................3.35.................................1.30...................................2.57
1994..................................4.25.................................2.30...................................1.84
2004.................................5.15..................................2.90...................................1.77
2014..................................7.25.................................4.80...................................1.51
when................................15.00................................9.75....................................1.53
So it's clear that along with a steady increase in wages, there is a steady increase in the price of the Big Mac. So at 15 dollars an hour, the price of the Mac would be round 10 dollars indeed, and you would not be getting any more burger for your hour than you do today. In fact, you can see that in 1982 your one hour of labor bought you 2 1/2 burgers! But today that same hour of labor buys you only 1 1/2 burgers, a whole burger less. Now only one person gets a whole burger for that same hour, and not both of you. Gonna have to work another half hour to get the same amount of food. But why did the price of the burger go up so much too? Because only the cost of making the burger went up, not the number of burgers being made or sold. The number of burgers stays determined by supply and demand-how many can they sell. When the minimum wage is hiked, it has nothing to do with the employer making more money or moving more product, it has to do with an artificial hike in his production line he has no control over. So the cost is passed down to you, the consumer, if he is to comply and still stay in business. BECAUSE HE ISN'T MAKING ANY MORE MONEY IN HIS BUSINESS THAN BEFORE, ONLY THE PEOPLE HE HAS TO PAY ARE GETTING MORE.
Please explain this to anyone you know who is demanding an artificially inflated economy. I used Big Macs here to illustrate, but this principle applies to all goods and services. How do we stop this madness? Well, we demand something for something, all the time, for a change. Labor for money, an increase in burger output from the employees, and an increase in sales. That's how you do it NOT artificially. You give a raise when it's warranted by production and profit. Just an idea!
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