It’s impossible not to look at the cost of things nowadays and go “remember when things weren’t that expensive?” Given the actual cost of what it takes to make things nowadays thanks to technology, it’s hard not to feel like we kena cheated or something.
Just look at the price of buying a house these days! Or small things like clothes that make it seem like they’re made out of gold. Seriously, RM200 for pants with holes in them?!
Source: Elite Readers
And don’t get me started on fast food—which is supposed to be a means for us to eat cheap, but it seems like it’s gotten a lot more expensive.
Don’t believe me though? Just check out this McDonald’s menu from the 80’s. Btw, the pricing is in RM so ignore the dollar sign ($).
Better yet, how about we compare it to the prices of McD’s food today, so you get a clearer idea?
Seeing these prices must surely have your blood boiling. Some of the prices have increased by over 300%!
But are the prices today really more expensive?
Make no mistake, even though the prices back then seem to be much cheaper, they’re actually no different than the prices we have today!
This is all thanks to inflation.
Back then, the average monthly income for a fresh grad was approximately RM1,000, which at that time was quite substantial. So, we may look at a RM3 burger and think “that’s pretty cheap!”, but in reality, it was just as expensive then, as it is now.
According to some inflation adjustment programs, a RM3 Big Mac should cost approximately RM9.32 by today’s standards, so we’re not far off at RM9.50. Plus, with all the set meal promotions McD’s constantly has, you’re definitely getting your money’s worth. Sort of.
With inflation and the ever-changing exchange rates, the ‘Big Mac Index’ was birthed
Yes, it was named after the Big Mac.
The Big Mac Index basically came into existence when the Economist magazine in 1986 used the price of a Big Mac to measure and compare the purchasing power of consumers around the world. It’s basically a way to calculate the exchange rate between nations and understanding which currencies are cheaper or more expensive against the U.S. dollar.
Today, for example, a Big Mac in the U.S. costs $5.67 USD, while in Malaysia it costs RM9.50.
So surprise surprise, I think we all know this, but our currency is undervalued against the dollar by 59%.
This is why although our fast food prices might still be somewhat the same as compared to the 1980s, you’re not wrong to think that things have just gotten more expensive.
So what does this mean for Malaysians today?
If you take a look at the rate of inflation, the value of RM1,000 back then would be worth approximately RM3,107.93 today.
But fresh grads’ minimum wage these days only start at around RM2,600.
RM500 difference is a pretty big deal if you really think about it. That’s enough to pay off the installment for a brand new car!
Sure, the government did raise it by RM100 last year from RM2500 to RM2600, but is that really enough? The cost of living is constantly increasing, with so many fresh grads being in debt because of their PTPTN loans, car loans, and even housing loans!
It’s interesting to think that at one point, some things were actually affordable but thanks to inflation, things are just going to get more and more expensive.
What do you think? Was the price of things back then better or worse than it is today? Let us know in the comments!
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