Here are some numbers for you. Big Mac price Country Hourly wage paid $2.50 Philippines 75 cents $4.29 USA (CA) $9 dollars $5.10 Australia(Mt. Isa) $19.27 7-11 store Coke price $0.40 Philippines $1.59 USA $3.08 Australia So...which is the better place to live?
The so called "big mac" index used by economists is to compare the relative value of a country's currency and it's purchasing power. This tells you that the actual purchasing power of the Aussie Dollar is substantially greater then the US dollar. We already know this. You thank our Fed for that. Has nothing to do with minimum wage.
No, that is the difference in "price". What the big mac index seeks to do is find the true difference between "two currencies" by measuring their purchasing power, not price differential. Again, has nothing to do with minimum wage.
Peil didn't say it was a cause and effect. He just asked if it worked there why can't it work here. A smart question.
Mav, I'm sure you meant to say AUD has lower purchasing power than USD. Because $AUD4.29 buys you only about 80% of a Big Mac Down Under, mate.
In the United States there is a supposed lack of jobs for everyone, which makes it tougher for the jobless to get back to work. However, it might also be that what careers there are do not pay much, as fully one-quarter of private sector workers are approximated to make less than 10 dollars per hour.