The issue here is that the “Big Macs per hour” metric is inherently flawed - it only measures the price of Big Macs, and not other strictly necessary commodities such as utilities, rent, and potentially fuel, which are by no means even remotely tied to the price of the Big Mac.
In the case of Denmark, all three of these are very expensive, particularly in the bigger cities. Indeed, despite receiving a government subsidy of roughly 1000 USD before taxes (which equates to 750 USD after taxes; subsidies aren’t tax-free), university students in Denmark who do not receive financial aid from their parents must either work a side job or take out a loan - housing costs are simply so out of control that 750 USD only barely manages to cover rent (a tiny room in student housing with shared bathing and kitchen, not an actual apartment, mind you - an actual apartment in a university town easily costs 1000+ USD a month, and 2000 is far from unheard of for multi-room apartments) and utilities, to not speak of food, fuel (prohibitively expensive; a liter in Denmark costs roughly the same as a gallon in the US, i.e 400% more expensive), or any sort of leisure.
In essence, while it is less stressful to be poor in Denmark because you don’t have to worry about personal bankruptcy if you get sick, etc, the purchasing power of the Danish minimum wage is not significantly higher than it is in the US because the cost of living is so tremendously high.
The whole point of the Big Mac index is that it is tied to all of those things. To sell a Big Mac, you not only have to grow the beef, wheat and vegetables, you have to ship them to your store by truck, cook them using gas, electricity, or other utilities, put them together using unskilled labor, and rent or buy the space for the restaurant to sell it in, and the cost of the finished sandwich will therefore reflect all of those market segments. If rent etc. is really high, then it’s going to be expensive to run a restaurant.
While I appreciate most of your thoughts on the Big Mac Index, Chronos, I do not think it necessarily accurately reflects the state of the rental market in its entirety. It certainly reflects the average cost of renting business property in any given country, but the cost of renting business property is not necessarily indicative of the price of renting housing - particularly not in a country such as Denmark where subsidies for private persons are ubiquitous, and the individual therefore has larger income than wages (and the associated wage-related costs for businesses) would suggest.
Nobody’s pretending freebies fall from the sky. It’s just simple arithmetic.
Part-time McDonald’s workers in U.S. do not get health insurance. Even full-time workers are missing several government benefits that all workers in Denmark get. Forbes (and you, apparently) are happy to subtract the taxes paid from worker income, but unwilling to add the benefits back in (or, equivalently, subtract the U.S. employee-paid expenses out).
Don’t you see? If you subtract the payroll tax that covers healthcare in Denmark, then in order to compare apples with apples you need to subtract healthcare expenses from the U.S. worker’s take-home pay. Similarly for childcare costs, et cetera.
TL;DR: There are economists and other scholars who spend the effort to produce apples-with-apples comparisons. Clicking instead on a Forbes article is a blunder unless one’s purpose is to find faulty propaganda to argue on a message-board or reinforce one’s own ignorant prejudices.
This is just from my memory, but last I read the starting McDonald’s worker earned something like the equivalent of 16.50 US dollars in Denmark. It’s even higher in Norway, at about 21 US dollars.
This is because Denmark has a much lower amount of poverty than in other countries such as the U.S. so there are fewer adults applying for jobs in fast food. Basic economics, when there’s a shortage of people willing to work, that drives the prevailing wages up. No minimum wage laws needed.
While the tax rate is Denmark certainly is higher than in the U.S. it’s not all that much higher, and fast food workers really do take home substantially more even after taxes are factored in.
While Danish workers in low-level jobs have it much better than those in America right now, it’s uncertain how long this is going to last because many of these European countries are seeing a large influx of immigration from other parts of the world, and with that comes poverty and a large pool of potential work applicants willing to work for less.
Is there any basis for the assumption that after tax they both make enough for the same number of Big Macs per hour?
This seems incorrect. The Forbes article does not, as you claim, subtract out taxes paid from worker income.
What the Forbes article does is claim that 110 Danish Krone is $16.35 by current exchange rates, and then say that applying the correct Purchasing Power Parity factor to account for correct prices divides this by 1.4 to get $11.70. Nothing about taxes.
To the contrary, it’s you who are trying to have it both ways, by counting the benefits of the taxes but not counting the taxes themselves.
Previous posters had already stated that the American worker’s wage is about twice the price of a Big Mac, that the Danish worker’s is about four times the price, and that Danes pay about 50% tax. I haven’t checked any of those figures yet, but I didn’t see anyone disputing them, either.
Wrong. Post the relevant excerpt from Forbes if you want me to walk you through their error. (As I say, it doesn’t load on my computer.) But you are missing the point.
When you give the American worker $X and the Danish worker $X equivalent in purchasing power, it is the Danish worker who is better off. (It’s more logical to work with take-home pay, but irrelevant to the argument.)
The reason the Danish worker is better off is that he gets free health-care. Most U.S. McDonald’s workers do not get employer-paid insurance. The Danish workers get other benefits of their welfare state as well.
I understand that many Americans are morally opposed to public-paid medical care, but it shows bizarrely flawed perspective to assign that care a value of zero, as you have done.
Denmark has progressive taxation so a burger flipper won’t pay 50% tax if that is his only job. Looking at this table somebody with 120k salary per year (something like 18k USD) would pay roughly 25% taxes.
I can’t “post the relevant excerpt” - I’m saying that the article doesn’t say what you claim it says, so the entire article is the “relevant excerpt”. That you are continuing to argue about the article says when you admit not having even read it is bizarre.
I’m not saying it’s valued at zero. I’m saying it’s paid for with taxes which are also not valued at zero. You keep pretending that the article uses taxes to make its point, but it does not. The article says that Danish workers get the equivalent of about $11.70 USD in purchasing power before taxes.