I was told the other day to give up my day job. Here is the economic reason as to why this won’t happen.
To make a simple 8ply woven scarf takes about 6 hours work after the yarn is purchased and the design is decided. A 200g ball of wool is about $13.50, this will make 2 scarves.
So here is the maths, this assumes that I have needles, looms etc and don’t need anything else.
To make 2 simple, 1 colour scarves in 8ply (woven)
Purchase: 10 min (web purchase)
Warp: 2 hours
Weaving 8 hours
Finishing 2 hours
Time for 2 scarves 12 hours and 10 min. This is the minimum for something really simple.
Minimum wage in Australia is currently $15.96 per hour. So labour cost is $194.18 meaning these simple quick scarves cost $221.18, or just over $110 each to break even with having any job.
Now anyone can go down to Kmart or Target and get a simple woven scarf for about $20. Why would they pay over $100 for one? This means that if I could get ANY job as an employee I would get more than if I made scarves and sold them for a living!
Comparing getting unemployment benefits with the production:
Current Newstart allowance for a single adult is $489.70 per fortnight. To match this amount working a 38 hour week I would need to sell each scarf for $45.99. If people saw my product as having more value than a mass produced item this price could be achievable.
Knitting in general takes longer, looking at a small item like a hat that you can get out of just over one ball of wool, the $13.50 200g ball will make at least 3 hats. To knit each hat takes about 4 hours. So the cost of the hat is $63.84 at minimum wage, or $25.77 at unemployment rates.
These prices haven’t taken the time required to actually sell the product or commissions to be paid into account. Getting the product to the market is the next hurdle, do you sell through a shop and pay them a commission, sell to a shop and let them add a profit margin or sell personally at a market or on the internet.
So if I was unemployed and unable to get a job, making and selling small items may enable me to remain industrious and match unemployment benefits. A big advantage would be no need to prove I have applied for the minimum number of jobs and jumped through the rest of the hoops required to get paid. There is also the advantage of all my knitting and weaving supplies becoming tax deductible. Any paying job however would give me a better income.