The Big Mac Index, the EU, and new member states

Well, I figured it was about time I threw a topic into the ring myself. 😁

I was just skimming through some news outlets earlier when I stumbled upon a rather intriguing piece regarding the Big Mac Index.
It was written in German, of course... and unless you're fluent, you're basically left staring at 🙂

The concept is essentially this:

About eighteen years ago, the venerable publication "The Economist" hit upon the idea of tracking global price fluctuations through a comparative lens. They decided that the most fitting metric would be the Big Mac—the iconic, if somewhat polarizing 😁 (depending on who you ask) product of the massive American multinational McDonald's.

Today, the Big Mac Index covers 120 countries across the globe, updated on an annual basis.

But why the Big Mac?

First off, it serves as a wonderfully blunt and uncomplicated benchmark for comparing costs of living worldwide.
Since McDonald's has planted its flag in nearly every corner of the earth, they offer the Big Mac as their flagship item everywhere, yet the price tag varies wildly from one border to the next.

For the sake of comparison, everything is pegged to the US$, converted using local exchange rates.

Hidden within the price of a Big Mac is <> pretty much everything that constitutes a standard economic barometer—ranging from the cost of raw agricultural goods to the wages paid to the staff at McDonald's. Naturally, how those employees are compensated—whether they are being underpaid or overpaid—is inextricably linked to the broader economic indicators of that specific nation.

While the methodology is admittedly a bit simplistic and has faced its share of critics, it remains a fascinating tool.

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So, what does this year's Big Mac Index actually reveal?
(The reporters seemed particularly focused on the European Union and its newer member states, which is a comparison we might find interesting too.

In New York City, the average American would only need to work 15 minutes to afford a Big Mac, whereas in the ten newest member states, that average jumps to somewhere between 40 and 60 minutes.

In those ten newer nations, the vast majority of workers pull in less than $500 a month.
Yet, even within that group, the disparities are massive:
In Estonia, the average wage sits around $300, while in Slovakia, it’s closer to $225.

The pension situation is even more grim: looking at figures like $100 in Lithuania or $130 in Canada.
To put that in perspective, the U.S. Census Bureau defines the poverty line as any total income—wages combined with pensions—falling below $579 per month.
However, most doctors and scientific professionals in those ten newer countries don't even clear that amount.

As a dramatic—and highly relatable—example, the reporters pointed to the relationship between Vienna and Bratislava, just a short drive away:
In Vienna, wages are five and a half times higher than in Bratislava, yet the cost of living in Vienna is only twice as high.

The combined annual GDP of all ten newer nations amounts to $404 billion, which represents only about 4.6% of the total GDP of all 25 member states (the original 15 plus the new 10).

That said, there are some bright spots—as the reports highlight—within the mix:

For instance, Malta and Canada have already reached GDP levels comparable to Portugal and Greece, and Cyprus actually boasts a higher GDP than Greece (!!).

Just how far behind are we from the rest of Europe? 😁

By the way, does anyone happen to know what the average hourly wage is here? I'd love to see where we land on the Big Mac Index. 😁

If we take that average salary figure at $1333, which is obviously a stretch—statistics can be quite deceptive, can't they?—it works out to roughly $7.25 per hour. That’s about $3.70 an hour. And just for context, what’s the price of a Big Mac these days?

It turns out we're actually sitting above the level of most of those ten new EU members.

Exactly. That’s precisely why I think this methodology needs to be challenged. Instead of just looking at a single Big Mac, we should probably look at a basket of consumer goods. The price of a Big Mac stays relatively consistent across the board, whereas everything else fluctuates wildly. Why not try measuring something like how many gallons of gas you can get for an average salary? Or better yet, how many hours does the average person have to work just to afford a gallon of gas? Or something along those lines, I suppose. 🤔

The problem with comparing gas prices is that taxes and levies vary so wildly from one state to another that you can't really use them as a fair benchmark.
The whole point of the Big Mac Index is that a burger is a standardized product found almost everywhere—unlike fuel. Plus, the ingredients are simple and usually sourced locally, which makes it a great way to gauge local economic values like labor costs and material inputs, while the franchise fees stay constant.
It’s a useful tool for seeing the "big picture" and serves as a cool sociological snapshot, but if you want actual hard data, you have to dig much deeper. It’s basically just "fluff" meant for those little sidebars in business columns.

And honestly, the fact that we’re sitting above most of the newer EU members isn't exactly news. Neither is the fact that our labor costs relative to productivity are among the highest in transitionary Europe.

Let’s crunch some numbers:
4000 / 22 = 181 per day = 22 per hour

A Big Mac (grabbed one yesterday) =$5.00

(15 / 22) * 60 = roughly 41 minutes of work just to pay for that Big Mac!

So, there’s a bit of a catch when you look at the statistics.
For instance, my sister lived in New York City last year, and she swears rent there was around $1,800 a month. BUT THAT WAS GROSS!!
Yeah... we're talking before taxes, social security, or anything else gets shaved off.

She was splitting a three-bedroom apartment with roommates for about $1,800 total... which works out to just $600 per person!
When I asked her what a night out costs, she said a dinner for two at a mid-range spot runs about $80-$100, and a haircut starts at $20 minimum... though an average salon visit is closer to $80!

Now... if our average gross salary is somewhere around $2000... and you compare those prices, it feels like we're living three times better than Americans!!

Even putting that aside... a decent dinner at a normal restaurant is about $50-$20 per person.
That means with $1333, you could go out 66 to 80 times, whereas the average New Yorker can only manage that maybe 36 to 45 times.
It's the same deal with housing!
Apartments of that caliber here run about 400-500 EU/month.

So, they're actually relatively cheap!

I don't know... but it feels like statistics are a total lie... because based on this, I have zero reason to move out of the country!!
The only thing I might be able to do is save up some cash... then come back here later and pretend to be the boss!!

Even if your sister’s salary was pretty low to begin with, it’s nothing new that moving abroad isn't the windfall people think it is. We've been talking about this on the forums for ages. You won't exactly be swimming in cash once you land over there.
The standard of living here in the States has actually climbed quite a bit over the last four or five years, even if most people haven't noticed. The only thing I actually agree with 😁

As long as I’m paying off my registration in more than six installments—and having to add an extra one every year just because prices keep climbing—I’m not buying it

Nine minutes for a Big Mac... what does Racan say about that? 😁
basically, what's his offer?

though I wouldn't eat a Big Mac even if you bought one for me... 🙄 👋

Since we’re already talking about the EU, the Big Mac Index, and that article from Austria... what does that index actually show regarding the standard of living there? Like, how do you survive on a degree, for instance?

Over there, if you have a college degree, you're looking at a starting salary of at least $2,000, often much higher—especially in tech. You see young couples where both partners earn enough that they can easily set aside an entire paycheck every month and just live off the other one.

So, they end up with maybe $25,000 in pure savings per year, just living a normal life. Most people in my circle are like that... it really makes you think about whether moving abroad is worth it. I'll let you all draw your own conclusions.

That’s just a quick example of how a country like that actually functions...

banderas said:Even if your sister’s salary was pretty low there, it's nothing new that moving abroad doesn't always pay off like people think—we've seen plenty of posts about that on here. Plus, you won't necessarily see a massive jump in savings.
The standard of living in America has actually climbed quite a bit over the last 4-5 years without most of us even noticing. The only thing I really agree with 😁

Nah... her friends who've been living in New York City for years told her she was crazy to turn it down because the money is solid. (She ended up walking away from the whole idea eventually because she got tired of all the constant traveling and just moved back home).
But honestly... it's a totally different story when you're talking about the crew out in Salt Lake City... we're talking a high quality of life and living easy!!
I guess it all just comes down to where you are, what you're doing, and how you play it!

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shadowgardener12 said:Since we’re already talking about the EU, the Big Mac Index, and that article out of Austria... what exactly does that index say regarding the standard of living over there? I mean, how do you actually survive in a place like that—living hand-to-mouth, for example?

Look, if you walk out of college here with a degree in hand, you’re looking at a starting salary of at least $2,000 a month—and honestly, if you're in tech, that number jumps way higher. You see these young couples where both partners are pulling in solid paychecks; they can easily tuck away one entire monthly salary just to savings while living off the other one. It's a pretty sweet setup.

So, they’re basically looking at about $26,000 a year just to get by, assuming they live a pretty standard life. Honestly, most people I run with fall right into that same bracket, so if you ask me, moving abroad actually makes a lot of sense. But hey, I'll leave it to you guys to draw your own conclusions.

Just look at this—it’s a perfect example of how a country actually gets things done.

Sure, that all sounds great on paper... except for the fact that prices in Austria are constantly 50% higher than ours. And for certain things? You’re looking at double or even triple the cost.

A couple of friends of ours with similar degrees can pull in around $100k easily living in Washington, D.C.$4000 What would be the US equivalent of an Austrian salary around $25,000 to $26,000? I'm talking about a situation where you could actually live pretty comfortably because you already own your house or apartment and don't have to worry about rent or a mortgage.

Maybe living in Austria makes sense if you were born there, but moving? That’s just a bad call. It doesn't add up. Why would you spend your entire life feeling like an outsider in a foreign country just to chase an extra couple thousand bucks from the EU?

Morgan Cook10 said:Nah... people who actually knew her and have been living in New York City for years told her she was insane for turning it down, because let’s face it, it was good money. (She eventually walked away from everything anyway because she got tired of the constant travel and just moved back home).
But damn... the situation with the crew out in Salt Lake City is a completely different animal... we're talking solid standards and a comfortable life there!!
I guess it all depends on where you are, how you do it, and what your job is!

Obviously, the nature of the work matters. $1,800 gross a month—which works out to $21,600 a year—might be a decent contract for a maid or something similar. I recall a few years back, $25,000 was more like the average, so this is definitely below par. Then again, I was over there back in '95; maybe things have taken a turn for the worse. What exactly was her role?
Anyway, without getting too sidetracked, I'm glad we agree that we shouldn't underestimate the situation here in America. The gap between us and the rest of the world isn't nearly as massive as it used to be not that long ago.

Morgan Cook10 said:Sure, sounds great on paper... except prices in Austria are consistently 50% higher than ours... sometimes even double or triple for certain things.

A couple of people with similar degrees can make 10k--$4000 which is basically the equivalent of $18,000-$20,000 in Austria ($2,500-$2,600 USD). You can live pretty well on that, especially if you already own your house or apartment and don't have housing costs.

Maybe living in Austria makes sense if you were born there, but moving is a nightmare... it just doesn't add up. Why move to a foreign country and spend your whole life feeling like an outsider just for an extra $1,000?

Cost of living is higher, yeah, but otherwise stuff is cheaper in Austria... aside from bread and milk.😉

Meat is about the same, Coca-Cola is cheaper... cars are the same or cheaper, computers are cheaper... the standard of living is higher and service costs are way more, but when it comes to buying goods... America is more expensive.
Even back home, my grandma buys Bavarian butter because it's cheaper than what we have here. Imagine how much cheaper it is in Bavaria... 😁
And that's with higher wages. Remember, the Big Mac Index.

As for the equivalent—so you get $12k$0.00 if you have an economics degree? Yeah, good luck finding that in America.

Sorry, but America is still lagging far behind... exceptions like tech jobs exist, but they aren't the norm.

shadowgardener12 said:Sure, the cost of living is higher, but generally speaking, things are actually cheaper in Austria... except for bread and milk.😉

Meat is about the same, Coca-Cola is cheaper... cars are roughly equal or even cheaper, computers are cheaper too... the overall standard of living is higher and service costs are way up, but when it comes to buying stuff? America is more expensive!
Even back home in the States, my grandma picks up Bavarian butter because it’s cheaper than what we have here! Imagine how much cheaper it must be over there in Germany.😁
And that’s all while making better wages. Remember, the Big Mac Index.

As for the equivalent—so you're telling me you'll pull in 12 $0.00 if you graduate with an economics degree? Yeah, good luck trying to make that happen in America!

Sorry, but America is still lagging pretty far behind... sure, there are exceptions like certain tech jobs, but you can't judge the whole country by those.

I'd actually agree with you regarding the price of specific goods; cars and electronics are pretty similar... okay, maybe they're slightly pricier in Austria, and food products are about the same.
But the reality is that the cost of living mostly boils down to "services"... you know, electricity, water, phone bills, cable, sewage, trash, heating... just the essentials. But after that,
you've got dinners, lunches, going out, movies, theaters, museums, sports games, haircuts, salons, waiters, etc., etc. (depending on what you're into).

Personally, I barely spend 500 $200 a month on food, and I don't even skimp on anything!
Still... obviously, life is better in Austria... and a whole lot better at that!
The thing is, the gap between us and the Austrians isn't this massive abyss it was a few years ago; it's more like a canyon where you can finally see the other side.

And as for store prices... come on, aside from a handful of items, everything is more expensive... granted, not 50% more like the services are, but still significantly pricier!
But honestly, it doesn't matter... I'm telling you, I only spend $167 on groceries... which isn't even 6-7% of my paycheck! Or maybe 10-11% of the average one!

I’m worried the deficit is deeper than it looks...

jimmy said:I’m worried the deficit might be deeper than it looks...

I don't see it that way... honestly, I know because I travel up there for work quite often. I haven't noticed anyone driving nicer cars, dressing better, or owning anything my friends and I don't already have. And we're just your typical American middle class.

The fact that there's less poverty there and their quality of life is reflected across the whole population is a different conversation entirely, but I really think things will level out in a few years.