McWages and PPP

Absolute purchasing power parity states that a good should cost the same no matter the currency. Since labor is a good, it stands to reason that labor should result in the same purchasing power across currencies as well. New research by two economists, Orley Ashenfelter and Stepan Jurajda, examines PPP-adjusted wages across different currencies. By taking the cost of a Big Mac and dividing by the hourly wages paid to a typical McDonald's employee in that country, the result is Big Macs earned per hour. The research show that Western European and Canadian McDonald's workers earn 2.2 Big Macs per hour, while Chinese and Indian McDonald's workers earn only .6 and .4 Big Macs per hour, respectively. These results indicate that absolute PPP does not hold across currencies for labor. http://www.economist.com/blogs/freeexchange/2012/06/purchasing-power-parity