Coffee Affordability Study shows how many minutes Americans must work to buy a cup of joe

MILAN – You have probably heard of the Big Mac Index, a survey created by The Economist magazine in 1986 to measure purchasing power parity (PPP) between nations, using the price of a McDonald’s Big Mac as the benchmark. Analysts at Coffeeness have created something, in some ways, similar: the Regular Coffee Affordability Study, a comprehensive analysis aimed at determine exactly how many minutes of work Americans must invest to afford their daily coffee.

The analysis compared the cost of a regular cup of coffee in an independent shop and a Starbucks coffee to each state’s average hourly wage.

Analysts then used data from the Bureau of Labor Statistics to identify average hourly earnings in each state. They refrained from using minimum wage data, seeing as coffee is considered a non-essential purchase.

Assuming the purchase of one cup of coffee per day from a coffee shop, they then calculated how much of an hour’s wage (as a percentage) is required to afford that cup.

From there they were able to identify how many minutes a person needs to work to afford a cup of regular coffee or Starbucks coffee.

For the purposes of the study, they took the average price of a regular cup of black coffee. That means coffee from a diner or coffee shop without creamer, flavourings or add-ons. They also excluded specialty coffee and espresso from boutique roasters and third wave cafes.

Key Findings from the Regular Coffee Affordability Study:

• Hawaii is, by far, the state with the most expensive regular coffee. Although the state has a relatively high average hourly wage, Hawaiians work longer than anyone else for a cup of coffee.
• A cup of regular coffee is most affordable in Nebraska, costing $2.12. The state has an average hourly wage of $32.82, meaning it takes less than four minutes for Cornhuskers to work for that cup of joe.
• Washington is the state with the second most expensive cup of regular coffee. However, its average hourly wage is high enough to offset the extra cost, making regular coffee in the state surprisingly affordable.
• Arkansas has one of the most expensive cups of Starbucks coffee in the Union. And while it doesn’t have the lowest average hourly wage, folks still have to put in more minutes than anyone else to afford it.
• Conversely, the District of Columbia has the most affordable Starbucks coffee even though it ranks second in terms of the cost of a cup. That’s because it has, by far, the highest average hourly wage.
• Working time for coffee varies by over four minutes between the most affordable state (Nebraska: 3.88 minutes) and least affordable state (Hawaii: 7.89 minutes).
• Despite having the highest average hourly earnings ($42.65), Massachusetts still requires 4.91 minutes of work to afford coffee due to its relatively high coffee price.
• More spending power doesn’t necessarily make a cup of coffee more affordable. For example, Californians have to work for almost six minutes to afford a cup of coffee. For reference, that’s about the same as Arkansas, where the average hourly wage is more than $10 less ($40.97 in California and $30.25 in Arkansas) .

Below is the Starbucks Affordability map (credits: Coffeeness)

Some interesting facts:

• It’s rather surprising how much the price of Starbucks coffee differs from state to state, especially given the fact that Starbucks is a large, multinational corporation.
• While Arkansas doesn’t have the most expensive Starbucks coffee, it is the state with the least affordable cup. IN fact, residents of Arkansas have to work for well over 10 minutes to pay for a Starbucks black coffee.
• Things aren’t much better in Mississippi and New Mexico, where over 17% of a worker’s hourly wage is required to pay for that Starbucks cup, due to the relatively low average wages and pricey Starbucks coffee.
• In the nation’s capital, you’ll pay more for a cup of Starbucks coffee than almost anywhere else. However, if you’re living and working there, chances are you won’t notice, since residents of the District of Columbia earn a much higher average hourly wage than folks in other parts of the country. And thanks to that extra spending power, Starbucks coffee is most affordable in Washington D.C.

The full study is available at this link