New Orleans     The United Kingdom based, conservative weekly, The Economist, with their tongue somewhat in their cheek in 1986 came up with a smart-alecky thing they called the “Big Mac Index” as a way to explain currency evaluations between various countries.  Given the ubiquity of McDonald’s and its golden arches around the world, they had stumbled on a common reference point that many could understand.  To their surprise, and no doubt their delight, some economists and others started taking their semi-joke very seriously and using it as a common index.

There might be another way that McDonald’s is the proverbial canary in the mineshaft, and that is as a barometer on the increasing economic divide in the US, and perhaps elsewhere, between low-income families and other classes.  A report from the Los Angeles Times ran in our local paper.  The headline caught my eye: “McDonald’s losing its low-income customers.”  Wow!  Only a few short years ago, the $1-menu turned the company around as it appealed directly to tight family budgets and sales exploded 33%.  Now, traffic from poorer customers has dropped by “double digits” as prices have been forced up based on inflation, tariffs, and beef shortages.  At the same time, “traffic from higher earners increased by nearly as much….”  One analyst notes that “Happy Meals at McDonald’s are prohibitively expensive for some people, because there’s been so much inflation.”  Now the Big Mac Index is getting competition from the Happy Meals Index, but this time it’s underlining not currency differences but the widening wealth divide.

McDonald’s is at least frank about its customer base.  Campbell’s, the almost equally omnipresent soup brand, is less show, but it boils down to the same divide.  One of their tech executives described their product as “highly processed food for poor people” on his way out the door, whether he realized it when he posted or not.  Headlines everywhere are reporting that inflation and tariffs in the Trump economy are forcing lower-income families to buy cheaper and more highly processed foods, because they have no choice given the prices.

It’s not just about McDonald’s and Campbell soup, though.  Everywhere you look, from food to cars to rents, the divide is widening.  Delta Air Lines main cabin lost 5% in sales, while its premium seats went up 5%.  Hotels are seeing the same divide between their higher end properties and their economy offerings. The Los Angeles Times also notes that when it comes to credit delinquencies, families making less than $45,000 are showing “huge year-over-year increases,” while high and middle-income families have “flattened and stabilized.”

The analysis of this widening wealth gap is not coming from pointy-head leftwing academics in elite universities, but directly from analysts and economists on Wall Street and its subcontractors.  As an economist at Moddy’s noted, “It has always been the case that more well-off people have done better.  But a lot of the economic and policy headwinds are disproportionately affecting lower-income households, and [McDonald’s losing low-income customers] is a reflection of that.”

Meanwhile, the president is trying to claim that gas prices are heading to $2 a gallon when the national average is over $5 and ordering a cheese pizza will now run $17, and the Republicans in Congress want to ignore the soaring health care costs and eliminate subsidies and “22.6 million people, were cost-burdened in 2023, meaning they spent more than 30% of their income on housing and utilities.”

Politicians need to stop lining their pockets and helping their friends and get a grip on affordability, burgers, and rents before they find themselves off of the federal payroll and having to scuffle like the rest of Americans