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Thought it was going to be this one, which I enjoy using a lot and find useful for getting the big picture. https://inflationchart.com/cpi-in-bigmac https://in

Thought it was going to be this one, which I enjoy using a lot and find useful for getting the big picture. https://inflationchart.com/cpi-in-bigmac https://inflationchart.com/cpi-in-bigmac https://inflationchart.com/spx-in-bigmac https://inflationchart.com/spx-in-bigmac In the 70s you could work minimum wage for an hour and afford three Big Macs. Now you have to work almost an hour to afford one Big Mac.: https://inflationchart.com/minwage-in-bigmac https://inflationchart.com/minwage-in-bigmac

adventured 5y ago
What percentage of the labor force earned the minimum wage in the 1970s versus today? Today it's less than 1%. More realistically the new minimum wage in the US is ~$13-$15 per hour, which you can earn from Walmart, Target, Amazon, Walgreens, CVS, Best Buy and most of the rest. They can't get enough labor and will hire almost anyone that walks in the door. These days you can trivially earn $13-$15 / hour to start, working at popular convenience stores like Sheetz, Wawa and numerous others like them. Skills required? The ability to talk to people normally, show up to work and scan bar codes.
- legitster 5y ago
  It's worth pointing out that lots of countries don't even have minimum wage laws. It doesn't mean people there make $0 an hour.
  - odonnellryan 5y ago
    Those countries are either very strong union countries or countries that have lower standards of living.
    - didgeoridoo 5y ago
      Or have very high labor productivity and a constrained labor supply. Switzerland comes to mind.
      - odonnellryan 5y ago
        Switzerland has a minimum wage, no?
        didgeoridoo 5y ago
        Not federally. Five out of the 26 cantons do.
  - adventured 5y ago
    I'm not sure what your point is. You've invented a premise I didn't suggest, about the lack of minimum wage laws and $0 / hr. If someone is going to reference the US minimum wage, pretending that it matters for the Big Mac context, then it's quite relevant what percentage of the labor force is actually earning the minimum wage. Today that number is exceptionally low and it's trivial for most people in the bottom labor tier to earn far more than minimum wage. About the only places still commonly paying minimum wage, are small mom & pop businesses in the middle of nowhere (ie places entirely devoid of competition from the previously mentioned big businesses). Independent convenience stores run by Joe and Susie Shop Owner in Buckhannon West Virginia, jobs held by local teenagers that can't drive 60 minutes to the nearest Walmart (except of course even Buckhannon has a Walmart Supercenter; a town in the middle of nowhere with 5,000 people). The biggest entry-level US employers - which hoover up labor anywhere they can get it - are all paying far more than the minimum wage (along with other now standard benefits like health insurance, which is very expensive and not included in the pay figures).
    - swimfar 5y ago
      I think the person you are replying to agrees with you.
- rootusrootus 5y ago
  Our local fast food joints in Portland are also offering 14-15 an hour to start, now. See advertisements at the drive-thru window all the time.
- JohnJamesRambo 5y ago
  Did people in the 70s really make $3 an hour?
  - NDizzle 5y ago
    70s? I started working in the 90s at $4.25 an hour... 1993 I think?
  - fortran77 5y ago
    My first job when I was in high school in 1977 paid $2.65/ hour
serverholic 5y ago
Regarding that last chart, I changed it to "US Income" and got a different story. It looks like US Income has largely kept pace with the big mac.
- JohnJamesRambo 5y ago
  https://www.pewresearch.org/social-trends/2020/01/09/trends-in-income-and-wealth-inequality/screen-shot-2020-01-08-at-5-06-47-pm/ https://www.pewresearch.org/social-trends/2020/01/09/trends-... US income hasn’t increased equally though. The rich could already afford a Big Mac.
  - e4e78a06 5y ago
    If you think about what 1970s "middle income" jobs looked like, they were mostly factory jobs that paid well. Nowadays those jobs don't exist due to deindustrialization. So you can't really blame that income inequality on domestic US social policy when a big portion was due to US foreign policy.
legitster 5y ago
The minimum wage one is next to useless. States and cities set their own minimum wages. Unemployed people or people on fixed income have wages of 0. This chart doesn't really describe any meaningful set of the population or how they are doing.
- stonemetal12 5y ago
  About 20 states have their minimum wage at the federal minimum wage. So the federal minimum does have a major impact on the actual minimum. I agree about the other part though.
  - legitster 5y ago
    As another commenter pointed out, minimum wage affects less than 1% of the population. It's a bit bizarre to focus in on such a long tail. More importantly, Big Mac Index is based on the average US price. But Big Macs in, say, Arkansas can be almost 40% cheaper than one from California. So it's really not fair to compare the federal minimum wage to the national price.
    - stonemetal12 5y ago
      >minimum wage affects less than 1% of the population. It does now. If it were raised to 15-20 an hour how many would it effect? If there was zero effect then it would have already passed because it would have been easy points for a congressmen to say "Look what I did for the poor and hopeless I care".
  - seanmcdirmid 5y ago
    > About 20 states have their minimum wage at the federal minimum wage. Minimum wage in those states is increasingly meaningless as almost no one will work for that wage. The longer the minimum wage isn't updated, the more irrelevant it is. Seattle has a higher minimum wage now of $14.50, but it is also mostly meaningless at this point. Conservatives used to propose $20 minimum wages as slippery slope straw men, but these days that proposed wage wouldn't be considered a straw man at all.
nojito 5y ago
That entire website is a staple of bad economics. The charts you linked are beyond meaningless.
- JohnJamesRambo 5y ago
  Perhaps explaining why you think that would be more helpful to the readers.
amai 5y ago
US Income vs US Cost of Living tells a different story. The income rose 55% more than the cost of living: https://inflationchart.com/income-in-life https://inflationchart.com/income-in-life
- fouc 5y ago
  This chart seems to be misleading, especially when we know that purchasing power was higher back then. It was far easier to buy a house with the income back then too.
  - arcticbull 5y ago
    House prices are a zoning issue primarily. [1] In major metros, city councils prevented construction - as such supply could not meet demand and the price of housing in cities went up dramatically more than inflation. Outside major metros, minimum setback rules, minimum size rules, and myriad other policies conspired to make the average new house twice as large as they were before, while families on average shrunk. That said, adjusted for inflation, 1 square foot of new house costs exactly the same today as it did in the 1970s. This is what it looks like when you have federalized zoning and allow supply to meet demand. [2, 3] This is what it looks like when you do not. [4] I also reject the idea that it was easier to buy houses back in the day on average on a per square foot basis. In the 70s, we saw mortgage interest rates as high as 12% on a 30 year fixed. You can buy a significantly more expensive house on the same monthly payment when you're on a 30-year fixed 2% APR mortgage vs a 12% APR mortgage. It doesn't matter that purchasing power was higher back then per unit because today you get significantly more units. [1] https://fee.org/articles/new-homes-today-have-twice-the-square-feet-per-person-as-in-1973/ https://fee.org/articles/new-homes-today-have-twice-the-squa... [2] https://fred.stlouisfed.org/series/JPNCPIHOUQINMEI https://fred.stlouisfed.org/series/JPNCPIHOUQINMEI [3] https://marketurbanism.com/2019/03/19/why-is-japanese-zoning-more-liberal-than-us-zoning/ https://marketurbanism.com/2019/03/19/why-is-japanese-zoning... [4] https://fred.stlouisfed.org/series/CPIHOSNS https://fred.stlouisfed.org/series/CPIHOSNS
    - seanmcdirmid 5y ago
arcticbull 5y ago
From the right side: > "You're now losing -1% of your money to inflation per year or 1.0% per month" What on earth does that mean? Inflation of 6% annualized is 0.4% per month. Big Macs against the S&P 500 is some sort of chart crime. Yeah, companies became more valuable because we're good at making companies. That's got very little to do with ... anything. [edit] Especially since the S&P 500 isn't some sort of platonic ideal - it's a moving target! They replace companies over time! Further, wage growth not matching production efficiencies or even decelerating is not a monetary policy issue (or anything to do with inflation) but a social policy issue. Specifically, minimum wage not tracking inflation, and in my opinion, a broad-based rejection of unions. It's kind of hard to take these sites seriously when they fail at both math and economics. And more than that when they steal my back button.
- beachwood23 5y ago
  > Further, wage growth not matching production efficiencies or even decelerating is not a monetary policy issue (or anything to do with inflation) but a social policy issue. Specifically, minimum wage not tracking inflation, and in my opinion, a broad-based rejection of unions. It can be both a monetary policy issue and a social policy issue. Entities that are close to the money-creation spigot that is the Fed have a decreasing cost of money and debt. Anyone / thing further from the cheap supply of money have seen less benefit. The people working for minimum wage are very far from the cheap supply of money. Social policy, as you point out, has not kept up with monetary policy. But the problem is initiated from monetary policy.
  - arcticbull 5y ago
    The "money creation spigot" is lending. Anywho who borrows money is at the spigot - that's how fractional reserve lending works, and that's where money comes from. This means anyone with a mortgage, anyone with a credit card, anyone with a post-paid phone plan. Indexing minimum wage to inflation substantially solves the problem. Can you quantify the spread you claim exists here? I feel like just pointing to the "cantillon effect" and blaming it for everything without actually quantifying the magnitude of the issue you think exists is harmful to the discourse. The charter of the central bank is to maintain low predictable inflation and maximize employment. That's the function of monetary policy.
antihero 5y ago
Oh this is cool, I wonder if there's something like this for the UK as house prices here are obscene.
airstrike 5y ago
Not only are those charts Bad™, the website also hijacks the back button
- throwaway894345 5y ago
  Never understood why browsers allow that.
hbn 5y ago
I think about this metric frequently: https://www.marketwatch.com/story/the-stock-markets-rally-to-start-2020-means-it-will-take-the-average-worker-a-record-114-hours-to-buy-one-unit-of-the-sp-500-2020-01-02 https://www.marketwatch.com/story/the-stock-markets-rally-to... Working hours to buy a stock on the S&P 500.

adventured 5y ago

What percentage of the labor force earned the minimum wage in the 1970s versus today? Today it's less than 1%. More realistically the new minimum wage in the US is ~$13-$15 per hour, which you can earn from Walmart, Target, Amazon, Walgreens, CVS, Best Buy and most of the rest. They can't get enough labor and will hire almost anyone that walks in the door. These days you can trivially earn $13-$15 / hour to start, working at popular convenience stores like Sheetz, Wawa and numerous others like them. Skills required? The ability to talk to people normally, show up to work and scan bar codes.

legitster 5y ago
It's worth pointing out that lots of countries don't even have minimum wage laws. It doesn't mean people there make $0 an hour.
- odonnellryan 5y ago
  Those countries are either very strong union countries or countries that have lower standards of living.
  - didgeoridoo 5y ago
    Or have very high labor productivity and a constrained labor supply. Switzerland comes to mind.
    - odonnellryan 5y ago
      Switzerland has a minimum wage, no?
      - didgeoridoo 5y ago
        Not federally. Five out of the 26 cantons do.
- adventured 5y ago
  I'm not sure what your point is. You've invented a premise I didn't suggest, about the lack of minimum wage laws and $0 / hr. If someone is going to reference the US minimum wage, pretending that it matters for the Big Mac context, then it's quite relevant what percentage of the labor force is actually earning the minimum wage. Today that number is exceptionally low and it's trivial for most people in the bottom labor tier to earn far more than minimum wage. About the only places still commonly paying minimum wage, are small mom & pop businesses in the middle of nowhere (ie places entirely devoid of competition from the previously mentioned big businesses). Independent convenience stores run by Joe and Susie Shop Owner in Buckhannon West Virginia, jobs held by local teenagers that can't drive 60 minutes to the nearest Walmart (except of course even Buckhannon has a Walmart Supercenter; a town in the middle of nowhere with 5,000 people). The biggest entry-level US employers - which hoover up labor anywhere they can get it - are all paying far more than the minimum wage (along with other now standard benefits like health insurance, which is very expensive and not included in the pay figures).
  - swimfar 5y ago
    I think the person you are replying to agrees with you.
rootusrootus 5y ago
Our local fast food joints in Portland are also offering 14-15 an hour to start, now. See advertisements at the drive-thru window all the time.
JohnJamesRambo 5y ago
Did people in the 70s really make $3 an hour?
- NDizzle 5y ago
  70s? I started working in the 90s at $4.25 an hour... 1993 I think?
- fortran77 5y ago
  My first job when I was in high school in 1977 paid $2.65/ hour

serverholic 5y ago

Regarding that last chart, I changed it to "US Income" and got a different story. It looks like US Income has largely kept pace with the big mac.

JohnJamesRambo 5y ago
https://www.pewresearch.org/social-trends/2020/01/09/trends-in-income-and-wealth-inequality/screen-shot-2020-01-08-at-5-06-47-pm/ https://www.pewresearch.org/social-trends/2020/01/09/trends-... US income hasn’t increased equally though. The rich could already afford a Big Mac.
- e4e78a06 5y ago
  If you think about what 1970s "middle income" jobs looked like, they were mostly factory jobs that paid well. Nowadays those jobs don't exist due to deindustrialization. So you can't really blame that income inequality on domestic US social policy when a big portion was due to US foreign policy.

legitster 5y ago

The minimum wage one is next to useless. States and cities set their own minimum wages. Unemployed people or people on fixed income have wages of 0. This chart doesn't really describe any meaningful set of the population or how they are doing.

stonemetal12 5y ago
About 20 states have their minimum wage at the federal minimum wage. So the federal minimum does have a major impact on the actual minimum. I agree about the other part though.
- legitster 5y ago
  As another commenter pointed out, minimum wage affects less than 1% of the population. It's a bit bizarre to focus in on such a long tail. More importantly, Big Mac Index is based on the average US price. But Big Macs in, say, Arkansas can be almost 40% cheaper than one from California. So it's really not fair to compare the federal minimum wage to the national price.
  - stonemetal12 5y ago
    >minimum wage affects less than 1% of the population. It does now. If it were raised to 15-20 an hour how many would it effect? If there was zero effect then it would have already passed because it would have been easy points for a congressmen to say "Look what I did for the poor and hopeless I care".
- seanmcdirmid 5y ago
  > About 20 states have their minimum wage at the federal minimum wage. Minimum wage in those states is increasingly meaningless as almost no one will work for that wage. The longer the minimum wage isn't updated, the more irrelevant it is. Seattle has a higher minimum wage now of $14.50, but it is also mostly meaningless at this point. Conservatives used to propose $20 minimum wages as slippery slope straw men, but these days that proposed wage wouldn't be considered a straw man at all.

nojito 5y ago

That entire website is a staple of bad economics. The charts you linked are beyond meaningless.

JohnJamesRambo 5y ago
Perhaps explaining why you think that would be more helpful to the readers.

amai 5y ago

US Income vs US Cost of Living tells a different story. The income rose 55% more than the cost of living: https://inflationchart.com/income-in-life https://inflationchart.com/income-in-life

fouc 5y ago
This chart seems to be misleading, especially when we know that purchasing power was higher back then. It was far easier to buy a house with the income back then too.
- arcticbull 5y ago
  House prices are a zoning issue primarily. [1] In major metros, city councils prevented construction - as such supply could not meet demand and the price of housing in cities went up dramatically more than inflation. Outside major metros, minimum setback rules, minimum size rules, and myriad other policies conspired to make the average new house twice as large as they were before, while families on average shrunk. That said, adjusted for inflation, 1 square foot of new house costs exactly the same today as it did in the 1970s. This is what it looks like when you have federalized zoning and allow supply to meet demand. [2, 3] This is what it looks like when you do not. [4] I also reject the idea that it was easier to buy houses back in the day on average on a per square foot basis. In the 70s, we saw mortgage interest rates as high as 12% on a 30 year fixed. You can buy a significantly more expensive house on the same monthly payment when you're on a 30-year fixed 2% APR mortgage vs a 12% APR mortgage. It doesn't matter that purchasing power was higher back then per unit because today you get significantly more units. [1] https://fee.org/articles/new-homes-today-have-twice-the-square-feet-per-person-as-in-1973/ https://fee.org/articles/new-homes-today-have-twice-the-squa... [2] https://fred.stlouisfed.org/series/JPNCPIHOUQINMEI https://fred.stlouisfed.org/series/JPNCPIHOUQINMEI [3] https://marketurbanism.com/2019/03/19/why-is-japanese-zoning-more-liberal-than-us-zoning/ https://marketurbanism.com/2019/03/19/why-is-japanese-zoning... [4] https://fred.stlouisfed.org/series/CPIHOSNS https://fred.stlouisfed.org/series/CPIHOSNS
  - seanmcdirmid 5y ago

arcticbull 5y ago

From the right side: > "You're now losing -1% of your money to inflation per year or 1.0% per month" What on earth does that mean? Inflation of 6% annualized is 0.4% per month. Big Macs against the S&P 500 is some sort of chart crime. Yeah, companies became more valuable because we're good at making companies. That's got very little to do with ... anything. [edit] Especially since the S&P 500 isn't some sort of platonic ideal - it's a moving target! They replace companies over time! Further, wage growth not matching production efficiencies or even decelerating is not a monetary policy issue (or anything to do with inflation) but a social policy issue. Specifically, minimum wage not tracking inflation, and in my opinion, a broad-based rejection of unions. It's kind of hard to take these sites seriously when they fail at both math and economics. And more than that when they steal my back button.

beachwood23 5y ago
> Further, wage growth not matching production efficiencies or even decelerating is not a monetary policy issue (or anything to do with inflation) but a social policy issue. Specifically, minimum wage not tracking inflation, and in my opinion, a broad-based rejection of unions. It can be both a monetary policy issue and a social policy issue. Entities that are close to the money-creation spigot that is the Fed have a decreasing cost of money and debt. Anyone / thing further from the cheap supply of money have seen less benefit. The people working for minimum wage are very far from the cheap supply of money. Social policy, as you point out, has not kept up with monetary policy. But the problem is initiated from monetary policy.
- arcticbull 5y ago
  The "money creation spigot" is lending. Anywho who borrows money is at the spigot - that's how fractional reserve lending works, and that's where money comes from. This means anyone with a mortgage, anyone with a credit card, anyone with a post-paid phone plan. Indexing minimum wage to inflation substantially solves the problem. Can you quantify the spread you claim exists here? I feel like just pointing to the "cantillon effect" and blaming it for everything without actually quantifying the magnitude of the issue you think exists is harmful to the discourse. The charter of the central bank is to maintain low predictable inflation and maximize employment. That's the function of monetary policy.

antihero 5y ago

Oh this is cool, I wonder if there's something like this for the UK as house prices here are obscene.

airstrike 5y ago

Not only are those charts Bad™, the website also hijacks the back button

throwaway894345 5y ago
Never understood why browsers allow that.

hbn 5y ago

I think about this metric frequently: https://www.marketwatch.com/story/the-stock-markets-rally-to-start-2020-means-it-will-take-the-average-worker-a-record-114-hours-to-buy-one-unit-of-the-sp-500-2020-01-02 https://www.marketwatch.com/story/the-stock-markets-rally-to... Working hours to buy a stock on the S&P 500.