'McDonald’s is becoming a luxury': This Orlando man asked if Americans are living through a middle-class 'takeover' — warned even fast food costs are drowning people. Does he have real beef?

“You know s--t’s messed up when McDonald’s is becoming a luxury item in this country,” the Orlando-based realtor said.

So, what does the all-American hamburger really tell us about the country’s finances?

What is the Big Mac oracle telling us?

Smith made his video after reading a CNN story about how McDonald’s customers are pushing back against price increases.

McDonald’s CEO Chris Kempczinski told CNN that the franchise had seen a decrease in customers who made $45,000 a year in the last quarter of 2023. He admitted that this is because McDonald’s has raised its prices by 10% that year — which reaffirmed Smith’s point.

“A lot of people are drowning,” Smith said. “Housing and rent and college debt and daycare and now McDonald’s!”

Smith has made many videos in the past about how expensive certain necessities have gotten, from rent to food.

Meanwhile, many young people are still living at home or being supported by their parents — not because they want to, but because they feel they have no other choice.

Now, it looks like McDonald’s will join the long list of things they might not be able to afford.

“There’s gotta be some light at the end of the tunnel,” Smith said. “Are we living through the takeover of the middle-class?”

The Big Mac Index

Smith isn’t the first person to notice that McDonald’s prices are often correlated with economic change.

The Economist keeps track of this with their Big Mac Index. The magazine uses the price of the ubiquitous burger in different countries to measure the value of world currencies against the U.S. dollar. Because McDonald’s is the same everywhere — and still relatively cheap compared to most other restaurants — it’s a good economic barometer.

For instance, a Big Mac costs $5.69 in the U.S., as of the Index’s most recent numbers from December 2023. In Switzerland, the same burger costs 7.10 Swiss francs. Based on Big Mac prices alone, the implied exchange rate between the two countries is 1.25. But the actual exchange rate is 0.87. Therefore, the Swiss franc is 43.5% overvalued.