If a $20/hour remote job requires one hour of commuting time each way, what effective hourly rate is calculated after factoring in the necessary travel time?

Answer

$17.50/hour

The concept of the "true hourly value" necessitates factoring in non-productive time expenditures, such as commuting, to accurately assess the real return on time invested. The example provided illustrates that a $20/hour job demanding two hours of daily commuting (one hour each way) effectively reduces the rate when compared against jobs where travel time is negligible. In this specific scenario outlined, the calculation, considering the opportunity cost of that lost time relative to the pay, results in the effective rate dropping to $17.50 per hour, suggesting the time gained for studying or sleeping from a closer job might be worth more than the $2.50 difference in nominal pay.

If a $20/hour remote job requires one hour of commuting time each way, what effective hourly rate is calculated after factoring in the necessary travel time?

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