The Gender Big Mac Index

Big Mac

The Big Mac Index was invented by the magazine The Economist in 1986, as a lighthearted way to measure whether global currencies are at their “correct” level.  According to the Bureau of Labor Statistics (BLS), women in the USA earn 78 cents on the dollar.  Put another way, that constitutes 22% less pay than their male counterparts for doing the SAME work.  So let’s apply this to the Big Mac Index, by calling it the Gender Big Mac Index.

Gender Big Mac Index

In the USA, a Big Mac costs about $4.79.  Let’s combine this statistic with the BLS statistic of how much women in the USA make, regardless of profession; even in fields where women dominate.

Scenario 1:  A man walks into McDonald’s pays $4.79, and gets to eat the entire burger.  In Marketing Economics, this is called: a fair exchange.

Scenario 2: A woman walks into a McDonald’s, sees the price is listed at $4.79, but it will cost her $5.84.  In Marketing Economics, this is called: the two subjects are operating in entirely different economies.

Gender Big Mac Index Intensified

Here is where things get tricky…in the above Scenario 2, the woman pays more for her Big Mac because she earns less.  The Big Mac is listed at the same price for both genders, but the woman has less to spend, so the product is actually more costly for her, given the imposed structure.

Gender Big Mac Index Intensified is where we actually have different prices posted for people based on gender, and we combine this occurrence with the BLS statistic on less earning potential.

See photo example below of my local hair salon.  Women pay $10-$19 (33%-38%) more for receiving a haircut.  This social practice is so common and omnipresent, that no one questions it.

Hair

If McDonald’s were to follow this cultural norm, then this means that the American woman’s $5.84 Big Mac will now cost her $7.42 to $7.66 ($4.79 base price + $1.05 differential pay increase + $1.58 to $1.82 gender-based price discrepancies).  Meanwhile, the American man is still paying just $4.79 for a Big Mac.  This means American women are expected to live in a society where they pay 60% more, simply for having different chromosomes.

Organizational Implications

You may already see the big picture here and how this all connects.  Imagine the employee who has worked his entire career at your organization.  Along the way, he and his wife gave birth to four girls.  Of the four girls, one is a single mom, another is lesbian, a third died prematurely, and the last one is a single “starving artist.”  NOTE: They are all women who are not relying on a man who can tend to the 60% price inflation.  Now it’s time for your employee to retire.  If he does not have to financially support five women, then let’s hope he has put enough away for his retirement to take care of himself, because the Gender Big Mac Index Intensified has demonstrated that it would be too costly for his daughters to cover his expenses, since goods/services already cost them more than half the price it costs John Doe.

Talent will go to those organizations which…

  • Practice true meritocracy;
  • Address unconscious and conscious bias;
  • Prize work/life balance;
  • Actively listen to employee needs.

Robble, robble.

Rossina Gil, MSOD, MAIS, completed the Executive Management Development Training Program at McDonald’s Corporation Hamburger University.  She is a Global Leadership and Organization Development Practitioner, and the founder of Corporate Looking Glass, LLC – a diverse consultancy of OD experts and strategic thinking partners.   We increase retention.  Visit CorporateLookingGlass.com.

© Rossina Gil, 2015

Sources:

BLS.gov

Economist.com

Money.cnn.com/2015/04/13/news/economy/equal-pay-day-2015

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About Rossina

Thought Partner & Corporate Primatologist

Posted on June 22, 2015, in Uncategorized and tagged , , , , . Bookmark the permalink. Leave a comment.

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