How much is an hour of work worth?

If you earn $10 an hour, does a $20 CD amount to two hours of work? Not exactly.

For example, a worker may have a gross annual income of $35 000 a year. Purchasing power is based on net salary, not gross salary since that is the disposable income. For a 35-hour work week, the worker's hourly rate is not $19.25. After deductions, he earns $11.50 an hour.

To correctly evaluate the cost of his job, our worker must also add the hour he takes to travel to work every day.  This means that he spends 40 hours a week working (including travel time) which brings his hourly rate to $10.  To calculate the total cost of his job in time and money, he has to add the cost of transportation, lunches, clothing and work-related activities.  Ultimately, he will realize that his real net income is $300 a week and that he spends 46 hours at work. Instead of earning nearly $20 an hour, he only earns $6.50.  No wonder he has trouble making ends meet.