Who works harder around the world to buy a Big Mac?

Who works harder around the world to buy a Big Mac?

Some consumer goods are available all over the globe. The Swiss internationally active UBS has published its 16th comparison study on prices and earnings and decided to feature four in its section that calculates how much time an average worker in each city must work to earn enough to purchase each one. As staple consumer goods, the McDonald’s Big Mac and the Apple iPhone will be the same quality and nature whether bought in Doha or Rio de Janeiro

This makes their worldwide prices and affordability comparable. Workers in Hong Kong only have to work on average nine minutes to be able to buy a Big Mac, while workers in Nairobi have to work almost three hours.

The distribution of city rankings changes according to the reference goods being bought. Oslo, in the lower half of the table for buying bread, jumps to the top for rice. Workers there can afford it in one-eighteenth of the time that their counterparts in New Delhi require. For the iPhone, workers in cities such as Zurich and New York City require on average less than three days on the job to be able to grab one. In contrast, workers in Kiev must labour, on average, over 13 weeks to earn enough for the same phone. Workers in Buenos Aires cannot access official markets to purchase the iPhone 6 locally.

Prices of each product were an average from all survey participants and, where possible, were compared to the manufacturers’ official local retail price. The price of each product was then divided by the net hourly wage for our 15 professions and converted to either minutes or hours.

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Global exchange rates moved sufficiently of late to prompt talk of a “currency war”. States and currency zones are hoping for a weak currency to generate momentum in their economies, especially in the export sector. The measures of various central banks aimed at staving off deflation are also affecting exchange rates. These circumstances make it more difficult to compare purchasing power in different currency zones.

Against this backdrop, the 16th edition of our Prices and earnings study, in which we compare purchasing power in 71 cities across the globe. Our analysis of more than 68000 data points highlights the effects of political and economic events on prices and earnings, and reveals significant changes compared with the previous study three years ago.

The cities of Zurich and Geneva, for instance, have become markedly more expensive since the last study – mainly due to the Swiss National Bank‘s decision to abandon the EURCHF minimum exchange rate early this year.

Three years ago, the minimum exchange rate was set at CHF 1.20. Life in cities within the Eurozone and in Tokyo, on the other hand, has become less expensive as the euro and yen have depreciated against the US dollar. And with the currencies of certain emerging markets falling significantly, price drops have been even more pronounced in those parts of the world.

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