|
I was sitting on a grass island in front of a chevron gas station, on the corner of one major street and another, eating a one dollar McDonald's McChicken sandwich I bought down the road while I waited for the bus. I was eating this sandwich, admittedly thoroughly enjoying myself, thinking how for a dollar it was really quite a lot of food and very tasty. I ruffled through the to-go bag, pushing aside the napkins and unwrapping the paper like a kid on christmas, finally biting into the wheat bun, dry congealed mayonnaise, with shreds of what looked like lettuce on top of a hot, mystery meat chicken patty. Three hundred and sixty calories worth of well processed food served warm in a bag for only a dollar. It seemed almost too good to be true.
As I eat this neatly wrapped, deep fried, nutrition less mess of a food item I got to thinking about everything that actually goes into a McChicken sandwich. I saw, obviously, a chicken that need to be raised from egg to slaughter. I saw the eggs and wheat in the bread, the shreds of lettuce that had to be grown on a farm, the shitty mayonnaise with it vegetable fats and egg-whites. I saw paper and plastic and inks. What looked like pepper and other spices in the breading of the chicken. I imagined the hundreds of chemicals used in every step of the way to treat each of these individually products, each of which were probably shipped hundreds of miles away from each other, finally culminating in a McDonalds kitchen so they could be cooked by a middle aged latina woman and served to goofy looking twenty somethin year old coming in from the bus stop. All this labor, these resources, the mechanization and transportation that took to produce this one McChicken sandwich, and I got it all for only one dollar. Seems almost too good to be true.
I then got to thinking about the monetary costs of my McChicken sandwich. McDonald's charged me a dollar for it, but it obviously cost them a lot less to make it. I would estimate that McDonald's pays about 33 cents to make my McChicken sandwich, probably a little less. In the same way that McDonald's makes profit off of me buying the sandwich, the poultry company and bread manufacturers and whoever else all made small profits off of McDonald's buying their food items to make my McChicken sandwich. This means that the cost of raw materials for my sandwich is probably less than that, maybe somewhere around 20 cents. Now obviously McChicken sandwiches don't make themselves, so if you account for labor, shipping, various production and upkeep costs, administration costs, and whatever else expenses it takes for the many companies involved in producing my sandwich each have to pay, I think its fair to say that the real cost of a McChicken sandwich and everything it comes with is probably around 50 cents. Fifty cents for all of that. Kind of boggles the mind right? Seems almost too good to be true.
When I imagined all the work, the labor, the resources that go into making a sandwich like this I began to think about my job and the work I do and the resources I create. Being a college student, I have a shitty job with piss poor pay. Nevertheless my eight dollar an hour wage suggests that the work I do and the service I provide is worth at least sixteen McChicken sandwiches every hour. This means doing the work I do my productivity, the value of the fruits of my labor, is that same as what it takes to make at least sixteen McChicken sandwiches. If this wasn't true I would either be payed less or a McChicken sandwich would cost more. Thinking about my job and how phenomenally lazy and underachieving I am in it, I just couldn't imagine how what I do at my job could be the equivalent in labor and resources for what it takes facilitate making sixteen McChicken sandwiches. Whats more, I make comparatively nothing if you consider even the average American. The GDP per capita of the United States is $48,442, which means the average american make about $23 an hour at their jobs, which means necessarily they do enough work to make more than 46 McChicken sandwiches an hour. Average Americans pushing papers, filling out forms and typing on the computer have the hourly productivity of 46 McChicken sandwiches. Does that make sense? Does that seem fair? Something about that just doesn't seem right. Seems almost too good to be true.
As I lay on the grass thinking about these ideas, I felt just the smallest of chills go through me. Concepts like "the matrix" came to mind, and the plot for several science fiction novels based on these ideas went through my head. I am hardly an economist, or an expert on industrialization or globalization or anything like, so what the hell do I know. It probably all makes sense if you know enough I guess. Perhaps the miracle of the one dollar McChicken sandwich is a testament to industrialization, technology, McDonald's business model, fair trade or whatever. Or maybe its speaks to the exploitation of poor countries for the benefit of the rich or a sign of "end times" or whatever. I don't really now what it means, other than that its interesting if you stop and think about. The only thing I was sure of when i crumpled the bag and through it in the trashcan, is that I would probably have indigestion later and that I planned to buy another one next week.
 
|
The "wonder" you behold is not really the product of great industrialisation or technology. The reason why fast food is so cheap is because of government subsidies. If you remove the subsidies for corn (which is what the majority of livestock are fed), you'll find the price of the sandwich will increase. There is no "real" reason why healthy food is more expensive than fast food.
|
Put bbq sauce on the patty.
Becomes a nugget sandwich.
In Canada its 1.39$
You lucky/greasy bastards!!
America FUCK YEAH!!!
|
Pretty amusing blog entry 
I know the U.S. government subsidies allow McDonalds to produce cheap food. Not too sure exactly on the nitty gritty, but that plays a role too. I'm glad you're able to quantify the value of your labor.
|
I guess the cheapness of fast food would be a nice example of how capitalism works, yeah.
People specialize to maximize everybody's comparative advantage, so that the ultimate cost of goods and services is lowered because of the competition of the free market. And the existence of currency as a means of exchange means that people can purchase specific goods without having to barter things for other things they don't want, simple economics really 
|
On October 05 2012 14:22 Aerisky wrote:I guess the cheapness of fast food would be a nice example of how capitalism works, yeah. People specialize to maximize everybody's comparative advantage, so that the ultimate cost of goods and services is lowered because of the competition of the free market. And the existence of currency as a means of exchange means that people can purchase specific goods without having to barter things for other things they don't want, simple economics really
Actually, I would argue that it isn't necessarily to *everybody's* advantage. For example, one reason why industrial animal farming can produce meat so much more cheaply than traditional livestock farming is that the costs are hidden externalities. So a factory farm is large scale, and that makes it easier for farmers to manage animals. However, because they can raise so many more animals than before, they also have a lot more waste than before (talking literally about shit), that they can't actually get rid of safely. Natural bacteria just can't handle that kind of volume. There have been many documented cases of factory farms dumping shit into rivers and spraying it over nearby lands, and that is actual a cost that isn't reflected in the cost of your burger, but does eventually come back to bite you when it comes to the clean-up effort, or medical complications for people affected by the toxic waste.
With smaller scale animal farming, there's enough time for bacteria and other elements to help break it down naturally, but we've gotten to the point where it's just too large scale. So inevitably, someone is getting the short end of the stick, and that allows us to buy a sandwich for $1 rather than $5. It's not *actually* cheaper, if you look at it in the larger scheme of things, it just feels that way to us on an individual level.
So actually, the reason buy the burger is so cheap is partly through government subsidies, but also because we're externalizing costs and making someone else pay for it.
|
I mean, yes it's also part of simple economics that that there are negative externalities on the environment and what have you, didn't really mention that yar >.< It's beneficial for the consumer to be able to purchase these things cheaply, so the government will not only establish a price ceiling or subsidize raw materials, but will also legislate to try to manage the negative externalities (or try to force corporations to pay for it). I would say that because environmental damage is very difficult to quantify oftentimes, that most of the identifiable cost more clearly originates from subsidies. Environmental damage will accumulate over time and be massive, but there are many, many ways to measure environmental cost and it's usually not very easy to assign a number to it. But anyway, you're right about that ofc, and one of the many roles of government in the modern capitalistic system is to manage these kinds of things.
To sort of continue OP's/your idea of the discussion, a classic example of another thing we reap is street lighting. As a public good, it is nonexclusive (anybody can reap benefits) and nonrivalrous (one person enjoying it doesn't preclude another from doing so). There is a positive externality for the people who enjoy it, and those people don't have to pay the companies for enjoying street lighting. So the government steps in and makes the energy companies controlled monopolies (another, unrelated point in itself, since this keeps prices low and prevents a clusterfuck of energy companies in a given area), and also levies taxes so people are paying for these public goods. The system we have today isn't purely capitalistic or market-controlled, but it's pretty good.
|
You should go into human geography or geography in general as its such a broad topic. Its amazing how much food of added value America imports and the heavy subsidizing of food/products just so countries of a lower demographic can't make any economical progress by exporting.
|
A McChicken sandwich in Australia costs something like $3.50 for just over 400kCal. The fruits I ate over the winter ranged from around $0.60c to $0.80 per 100kCal. True garbage (chocolate bars, chips, sugar water etc...) aside, fast food isn't all that economically competitive over here. This isn't at all a deterring factor though, it's a matter of addiction not reason.
|
On October 05 2012 14:28 Funnytoss wrote:Show nested quote +On October 05 2012 14:22 Aerisky wrote:I guess the cheapness of fast food would be a nice example of how capitalism works, yeah. People specialize to maximize everybody's comparative advantage, so that the ultimate cost of goods and services is lowered because of the competition of the free market. And the existence of currency as a means of exchange means that people can purchase specific goods without having to barter things for other things they don't want, simple economics really Actually, I would argue that it isn't necessarily to *everybody's* advantage. For example, one reason why industrial animal farming can produce meat so much more cheaply than traditional livestock farming is that the costs are hidden externalities. So a factory farm is large scale, and that makes it easier for farmers to manage animals. However, because they can raise so many more animals than before, they also have a lot more waste than before (talking literally about shit), that they can't actually get rid of safely. Natural bacteria just can't handle that kind of volume. There have been many documented cases of factory farms dumping shit into rivers and spraying it over nearby lands, and that is actual a cost that isn't reflected in the cost of your burger, but does eventually come back to bite you when it comes to the clean-up effort, or medical complications for people affected by the toxic waste. With smaller scale animal farming, there's enough time for bacteria and other elements to help break it down naturally, but we've gotten to the point where it's just too large scale. So inevitably, someone is getting the short end of the stick, and that allows us to buy a sandwich for $1 rather than $5. It's not *actually* cheaper, if you look at it in the larger scheme of things, it just feels that way to us on an individual level. So actually, the reason buy the burger is so cheap is partly through government subsidies, but also because we're externalizing costs and making someone else pay for it.
Very true. Reminds me of Food Inc. I've made pretty big reductions to the amount of beef and chicken I eat after watching it. Can't quite push myself to vegan/vegetarianism tho.... In fact, I'll probably have a 1 euro cheeseburger from McD's later
|
In Denmark it will cost you around 5-8$
and fair trade is a concept where you don't exploit 3rd world farmers, not the same as no trade barriers... good read though
|
Economies of scale, google/wiki it. Quite the interesting economic phenomenon.
|
The McChicken isn't 50c to make. Probably more around 90c. heck it might cost 110c just as a means to get you in the restaurant and order it as part of a soda/coffee and fries combo. So they can also sell you a shake afterwards.
No way in hell is value fast food a super-high margin business.
Their revenues are US$ 27 billion
Net profit US$ 5 billion
Their higher-margin products ought to be like coffee, fries and their deluxe items like the big-mac and the more expensive sandwiches.
|
Great blog! I enjoyed reading it.
|
fuck now im hungry
my gf and i are bound together on a joint no-fast-food diet
=(
|
United States7639 Posts
5/5 because McChickens are my food from the heavens <3
|
Dude are you talking about one of their breakfast foods or something? I never see any $1 sandwiches any mickey d's..
|
Ahhhh the mcchicken sandwich. When I was poor and in college the wife and I would get a mcchicken sandwich combo, it was 2.99, supersize it, and get a 2nd sandwich, split the fries and drink and we both ate for under 5 bucks.
|
United States7639 Posts
On October 05 2012 21:59 iamho wrote:
Dude are you talking about one of their breakfast foods or something? I never see any $1 sandwiches any mickey d's..
Do you... live in the America?
Here in our happy United States, the McChicken Sandwich is a proud member of the esteemed "Dollar Menu."
|
I really enjoyed this blog. Your thoguht process is interesting to me because it is different from mine.
I don't understand how you ever thought that wage/salary is proportionate to how difficult or laborious a job is. Economic and governmental systems (at least in my knowledge of history) have always exploited people.
|
dang 5-8$ and 4$ in different parts of the world. Glad i'm an AMERICAN. 1$ McChicken sandwiches are sooo good.. Even burger kings chicken sandwiches are good too.
|
I am not sure because I've never checked, but I think someone here hit it dead on the head. That is, I would think the McChicken is a loss leader. You buy it for $99c but you're also probably going to want a drink, which is marked up over 300%. And I'm not sure how the margin of fries is... but yeah...
|
I work fast food now, and I have seen the cost sheets for food items. They may bleed the cost of a McChicken sandwich in other ways, but I can almost guarantee the food item cost of the sandwich is about 30c. My work has a very similar one dollar sandwich and I believe the cost, to my work, is somewhere around there.
|
|
|
United Kingdom14103 Posts
Makes me sad, I wish I could get a McChicken for $1, here it costs at least £5 for a McChicken meal (not just the burger but chips and a coke as well).
|
Calgary25996 Posts
Awesome blog
|
This isn't the same mc chicken non Americans are thinking of I think. At least over by me the $1 ones use thinner and smaller patties and come with a small amount of lettuce and mayo. We still.have the normal sized ones that run 3-4 bucks.
Great blog, sums up my thoughts about them
|
McChickens are just too good. Sometimes I buy 3-4 of them for a meal.
|
this blog makes me hungry at 2 am
T_____T
nearest mcdonalds so far away from my dorm too...
|
|
|
|
|
|
EPT
