When a politician is criticised for being ‘out of touch’, it is often said that they don’t know the cost of a loaf of bread or a carton of milk. The BBC describes this as ‘a classical political ambush that has been popular on both sides of the Atlantic for decades’, with cynical voters suspicious that political leaders live in a world divorced from the ordinary lives of the majority. But why are these two items such important yardsticks? And how would they stack up in a global comparison? What about something a little more fun… like the Big Mac?
It’s 30 years since The Economist invented the Big Mac Index, a ‘lighthearted guide to whether currencies are at their “correct” level. It is based on the theory of purchasing-power parity (PPP), the notion that in the long run exchange rates should move towards the rate that would equalise the prices of an identical basket of goods and services (in this case, a burger) in any two countries’.
As I travel around, I always like to check out the local McDonald’s – not only for regional specialties like the Teriyaki Burger (Japan), Camembert Fries (New Caledonia), Double 8 Burger (Singapore during Chinese New Year) or Taro Pies (Hawaii), but to see the different ways in which McDonald’s is conceived of in different places. Although I don’t eat there often, I will frequently at least walk past and check the prices of various menu items.
While at home, in Australia, McDonald’s is generally seen as cheap, low quality food, as demonstrated in the term ‘junk food’ often used to describe it, in other countries, grasping a bag of McDonald’s fries or a McDonald’s branded Coke is a fashionable display of western ‘cool’ and wealth. McDonald’s franchises exist in different locations, with different clientele, and different levels of service depending on the degree to which their products are luxury items in their parts of the world.
In the first part of our trip, in Fiji, we visited the McDonald’s in Lautoka, after finding the entire town’s hotels booked out for an event, and being rained on. McDonald’s provided a warm, dry area for us to get something to eat and look for accommodation in the next town. There, the restaurant was filled with mainly expats, tourists, and wealthy locals.
A McDonald’s burger cost several times the price of a much larger burger with fresh ingredients sold in a local shop. The American chain, much as it was when the first McDonald’s opened in my hometown, was clearly a status symbol.
Stereotypes of McDonald’s having a low-income clientele are certainly not true in Fiji. There, a Big Mac alone costs $8.55 FJD ($4.16 USD), in a country where the per capita GDP (PPP) is $9,314. Of course, many people earn much less than this. In Australia, prices can vary, but are around $5.75 AUD ($4.30 USD), but the per capita GDP is considerably higher (more than 5 times higher in fact) than Fiji’s at $47,318. In keeping with it’s status as a luxury experience, dining at McDonald’s in Fiji is a spotless affair, in an immaculately maintained restaurant with uniformed security and staff to clear your trays.
It is interesting, too, to see the relative status of McDonald’s in various countries – how it ranks in price and perceived status compared to the likes of Burger King (Hungry Jack’s), KFC, and others. How it differs to local chains, and how it adapts to local flavours and customs. Which types of burgers are more expensive in a specific location – beef, chicken, or fish?
Over the most recent portion of our travels, in Europe, I’ve seen Burger King and McDonald’s ‘flip’ positions in terms of expense and status (as judged subjectively by me on the basis of prime locations and upscale design) depending on which country we have visited. In the UK, it seemed that McDonald’s was the more expensive, with Burger King offering much cheaper meal deals (similar to the situation in Australia), while here in Hungary, from what I can tell glancing at menus (I haven’t eaten at either) Burger King’s prices are higher here.
Budget traveler beware!
For the budget-conscious traveler who assumes that McDonald’s will be the cheapest option, this can be an eye-opening experience. It pays to be aware of the fact that in some places McDonald’s is not the cheapest chain, and that in some places, fast food more generally, and often multinational chains specifically, are not the most cost effective way to eat. (Not to mention the fact that it is much more interesting to try local cuisine!)
So what is the price of a loaf of bread?
In my opinion, the question ‘How much is a loaf of bread?’ is almost as pointless as asking ‘How long is a piece of string?’ if you’re hoping for a single, pre-determined, exact answer that you can mark as ‘right’ or ‘wrong’. Obviously, given the enormous choice available in the world, the loaf of bread you choose can differ wildly in price. You might buy the 85c budget loaf, or the $7.95 artisenal loaf, of anything in between. Your choice will be influenced by your tastes, your means, your family, your location, your health requirements, and a number of other factors.
If I answer ’85c’ and you answer ‘$2.80’, neither of us are wrong – but we have perhaps revealed something about ourselves and our spending habits. But this isn’t usually why politicians are asked the question. As the coverage of Rudy Guiliani’s response almost a decade ago shows, the intention is usually to demonstrate how out of touch the politician in question is.
As Times columnist and former Conservative MP Matthew Paris explains, ‘People mainly only remember things like this if they are struggling with money – and politicians are not…I don’t think it’s unreasonable for people to expect politicians to understand the pressures ordinary families face, especially when the cost of living is squeezed and everybody’s ability to afford basic provisions cannot be taken for granted’.
Professor of British government Anthony King calls milk is a ‘shorthand’ for ‘expressing succinctly that a politician may be out of touch’, and says ‘I don’t know the price of milk, but all that tells me is my income is large enough not to worry about it, whereas I do know the price of petrol’.
Bread and milk, staple foods in the UK and US, are ‘our standard liquid and solid foods’ says Professor John Curtice. That’s why they are so widely asked about. But as Vanessa Barford, writing for the BBC points out, like bread, milk comes in various quantities and guises – whole, skimmed, semi-skimmed, soya, coconut, rice, goat, camel… ‘it’s easy to see how politicians could argue milk is no longer a fair indicator’.
So while the Big Mac Index, which The Economist itself admits was intended in a ‘lighthearted’ fashion to illustrate a principle, rather than a serious economic indicator, might not be perfect in comparing between nations, owing to the very different role McDonald’s plays in different places (not to mention the different availability or desirability of beef in various countries), the price of a Big Mac (or a bottle of Coke) might be a fairer question to ask politicians we suspect of being out of touch. After all: some figures suggest 56% of young adults in the US drink soda on a daily basis compared to only 48% consuming milk. Knowing the cost of a Big Mac or a Coke is perhaps not only an important economic barometer, but a measure of a nation’s health too.
How much is a Big Mac in your part of the world? And what kind of image does it have?
Today’s featured image is of a Big Mac I had here in Europe – with a coupon!
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