I began my search for the economic concept with which the price of a product can be expressed in the amount of time that someone must work to be able to afford it with monetary means. Or how many products can be purchased with the monetary earnings from a certain number of hours worked. To my surprise, there is no known, generally accepted term for it. However, the idea does return in the following books and publications.

Adam Smith wrote the following in Wealth of Nations (1776):  "Every man is rich or poor according to the degree in which he can afford to enjoy the necessaries, conveniences, and amusements of human life. But after the division of labour has once thoroughly taken place, it is but a very small part of these with which a man's own labour can supply him. The far greater part of them he must derive from the labour of other people, and he must be rich or poor according to the quantity of that labour which he can command, or which he can afford to purchase. The value of any commodity, therefore, to the person who possesses it, and who means not to use or consume it himself, but to exchange it for other commodities, is equal to the quantity of labour which it enables him to purchase or command. Labour, therefore, is the real measure of the exchangeable value of all commodities. The real price of everything, what everything really costs to the man who wants to acquire it, is the toil and trouble of acquiring it. What everything is really worth to the man who has acquired it, and who wants to dispose of it or exchange it for something else, is the toil and trouble which it can save to himself, and which it can impose upon other people. What is bought with money or with goods is purchased by labour as much as what we acquire by the toil of our own body. That money or those goods indeed save us this toil. They contain the value of a certain quantity of labour which we exchange for what is supposed at the time to contain the value of an equal quantity. Labour was the first price, the original purchase-money that was paid for all things. It was not by gold or by silver, but by labour, that all the wealth of the world was originally purchased; and its value, to those who possess it, and who want to exchange it for some new productions, is precisely equal to the quantity of labour which it can enable them to purchase or command."¹

Most people must perform labor to use the monetary earnings from that labor to acquire essential and less essential things in order to provide for their livelihood. In most cases, the amount of labor is directly linked to the amount of time investment. And in most cases, the level of the monetary earnings is directly linked to the amount of labor performed.

James E. Thorold Rogers wrote in 1884 in "Six Centuries of Work and Wages: The History of English Labour": "An artizan, therefore, earned nearly a bushel of wheat by a day’s labour, and an ordinary labourer three-quarters of a bushel. A week’s work would enable an artizan to purchase more than a quarter of malt, and a little more than seven days’ work would supply the farm labourer with a quarter of malt. In so cheap a year as this, the peasant could provision his family for a twelvemonth with three quarters of wheat, three of malt, and two of oatmeal, by fifteen weeks of ordinary work; an artizan could achieve the same result in ten weeks. Such wages were regularly paid, and even more, particularly in London."²

Rogers gives here a clear example of inequality by showing differences in purchasing power based on the amount of time investment for a certain yield and the height of the yield with a certain time investment.

E. H. Phelps Brown en Sheila V. Hopkins wrote in 1956 in "Seven Centuries of the Prices of Consumables, compared with Builders' Wage-rates": "Nowadays, real wages are commonly estimated by comparing money earnings with an index of the cost of living, but there are several reasons why we cannot do that here. On the side of income, all we have is the rate of pay for a day, and we do not know how many days' work the builder was getting in the year from time to time, nor what other resources he had. On the side of outlay, we know little or nothing about some important costs, notably rent, and the prices we do have are more wholesale than retail. These things apart, we still could not attach much meaning to " the cost of maintaining a constant standard of living " through seven centuries of social change. So we have not tried to construct any measure of real wages in the modern sense. Yet when we find the craftsmen who have been building Nuffield College in Oxford in our own day earning a hundred and fifty pennies in the time it took their forbears building Merton to earn one, the impulse to break through the veil of money becomes powerful: we are bound to ask, what sort of command over the things builders buy did these pennies give from time to time?"³

Brown and Hopkins show here a nice example of the fact that there is one constant throughout history: time. Workers in the example earned 150 times more than their predecessors for the same amount of work. This absolutely does not mean that they had 150 times greater purchasing power. Currencies change, prices change in absolute terms and in relation to prices of other products, salaries change in absolute terms and in relation to salaries of other professional groups, production processes change, there are periods of scarcity, periods of abundance. There is only one factor that is constant and always limited: the amount of time that an individual can spend on work.

Julian L. Simon wrote in 1981 in The Ultimate Resource: "The basic way to measure the cost of, say, copper, is with the ratios between the price of copper and the prices of other products. These ratios as in figure 1-1, show us the terms of trade between copper and non-extractive products. One such measure is to examine the price of copper relative to wages, as shown in figure 1-la. This price has declined very sharply (please notice the logarithmic scale in the figure). This means that an hour's work in the U.S. has bought increasingly more copper from 1800 to the present."⁴

Simon showed that the scarcity of most raw materials has decreased, despite the growing world population, by looking at the amount of raw materials that can be purchased with the earnings from one hour of labour. In the graphs below, it is also very clear to see that the price in relation to the consumer price index gives a distorted picture and that the price in relation to income shows a clear downward trend.

In "Pursuing Happiness: American Consumers in the Twentieth Century" (1993) Stanley Lebergott wrote: "Some Americans sing for their supper. Marian Anderson did, and so does Sherrill Milnes. But most Americans pay for their bread and beer, or caviar and champagne, by other work. They then spend over 90 percent of their incomes for consumption. On what terms did they make that exchange? Figure 9.1 reports how much an hour of work bought in 1900, 1929, 1960, and 1990. The advance was considerable by almost any standard."⁶

Lebergott uses one hour of labour to show what purchasing power it brings over the years. A clear upward trend is visible.

Lebergott writes further: "The Kapauku Papuans enjoyed the sunny Pacific described by Hearn, Gaugin, and Margaret Mead. Their usual diet included insects, fish, and potatoes. Fishing was "a major responsibility of women." Women also gathered insects for food. On average they caught 2.2 pounds of fish in eight hours. Papuans also worked two hours a day to grow the sweet potatoes a family of four consumed each day. If women spent time cooking potatoes and fish, caring for children and chickens, or making cloth, clothing, fishhooks and digging sticks, their workday far exceeded nine hours. Americans exchange work for goods on much better terms. They grow 48 times as many sweet potatoes per workday as Papuans. They catch 118 times as much fish as Papuans, and 144 times as much as Australia's aborigines."⁸

Here, a certain time investment and the yield it produces are compared between two areas. Lebergott shows again that one workday of an American yields many times more in absolute means such as food than an equally long workday of a Papuan.

In 'Do Real-Output and Real-Wage Measures Capture Reality? The History of Lighting Suggests Not' (1994) by William D. Nordhaus I found the following: "The earliest markets for lighting fuel arose in early Babylonia around 2000 B.C. According to Dubberstein (1938), Babylonians used sesame oil as an illuminant in temples, although it was too expensive to employ in homes. The wage of a common laborer was approximately one shekel per month, which was also approximately the price of two sutu (ten liters) of sesame oil. I have performed a number of experiments with sesame oil and lamps purportedly dating from Roman times (see the appendix). These experiments provide evidence that an hour’s work today will buy about 350,000 times as much illumination as could be bought in early Babylonia."⁹

Nordhaus has calculated that someone with the monetary earnings from one hour of work in 1994 can acquire 350,000 times more artificial light than someone with the earnings from one hour of work in 2000 BC.

In 2016 W. Michael Cox en Richard Alm wrote in "Onward and Upward! Bet on Capitalism—It Works": "The Bet should be scored in work- hour prices—the hours and minutes it takes an average worker to earn the money required to buy something. Work-hour prices are typically based on average hourly wages—but these data have a flaw. They don’t capture non-cash benefits, which are becoming a bigger share of what a typical worker earns. The data on total compensation include wages and benefits, and they’re a more accurate way to calculate work- hour prices because they incorporate all the rewards from work. For the average U.S. worker, inflation-adjusted total compensation rose steadily from $24.68 an hour in 1980 to $32.88 in 2015. Over time, work-hour prices of most goods and services fall faster than CPI-adjusted prices because employee compensation tends to rise faster than the overall price index. Since 1990, the work-hour prices of The Bet’s five metals fell almost twice as fast as the CPI-adjusted prices (see Exhibit 3). In work-hour terms, Simon wins The Bet in every year from 1980 to 2015, removing the ambiguity from the results."¹⁰

Cox and Alm beautifully show in their publication that prices in relation to the earnings from one hour of labor give a completely different picture than prices in relation to the consumer price index. The Bet refers to a bet that professors Paul Ehrlich and Julian Simon entered into. Ehrlich predicted that the world would soon have insufficient resources due to and because of the growing world population. Simon argued that for each additional person on Earth, productivity would increase in such a way that there would be no scarcity.

Gale L. Pooley and Marian L. Tupy introduce in 2018 in the essay The Simon Abundance Index: A New Way to Measure Availability of Resources published by the CATO Institute the term Time Price: "In this paper, we revisit the main points of contention in the debate regarding availability of resources and their relationship with population growth. Using the latest price data for 50 foundational commodities covering energy, food, materials, and metals, we propose a new way of measuring resource availability based on four concepts. First, the time-price of commodities allows us to measure the cost of resources in terms of human labor. We find that, in terms of global average hourly income, commodity prices fell by 64.7 percent between 1980 and 2017."¹² They define the term as follows: "Time­ price is the amount of time that an average human has to work in order to earn enough money to buy a commodity."¹³ They indicate that the Time Price can be calculated in the following way: "Real prices = nominal prices ÷ GDP deflator; Time Price = real price ÷ real hourly income"¹⁴ In 2019, Gale L. Pooley and Marian L. Tupy confirm in a blog post on the Human Progress website that they have introduced the concept of Time Price: "To arrive at our conclusions, we have come up with four new concepts: Time Price, Price Elasticity of Population, the Simon Abundance Framework and Simon Abundance Index ®."¹⁵ They define the term here as follows: "The time price denotes the amount of time that a person has to work in order to earn enough money to buy something. To calculate the time price, the nominal money price is divided by nominal hourly income."¹⁶ It surprises me somewhat that in their essay they use the calculation Time Price = real price ÷ real hourly income, and in their blog post Time Price = nominal money price ÷ nominal hourly income. Fortunately, the two formulas amount to the same thing. Since with real price the GDP deflator is on both sides of the fraction, it can be canceled out and thus the nominal price can also be used for convenience.

In 2023, attention is paid to Time Price in the book Life after Capitalism: The Meaning of Wealth, the Future of the Economy and the Time Theory of Money by George Gilder. He wrote: "Gale Pooley and Marian Tupy have worked to achieve by replacing Nordhaus’s immensely detailed calculations with one simple equation. Dividing nominal prices by the nominal wages of labor, they combine in one number two key effects of innovation: the rise in wages and the decline in costs. If we put this to the test with our Thanksgiving dinner, dividing nominal money prices by the hourly wage to get a time-price in hours and minutes, the price of a Thanksgiving dinner since 1986 has dropped 29.7 percent for the unskilled worker and 31.5 percent for the skilled blue-collar worker. Still, for any particular wage earner even these numbers are deceptive. Unskilled workers do not typically remain unskilled throughout their careers. The vast majority of these workers will ascend to the middle class. Assuming a normal promotion and learning curve, a Thanksgiving dinner that cost 32.9 minutes for an unskilled laborer to earn in 1986 cost him only 9.2 minutes in 2021, assuming that worker had ascended to skilled blue-collar status. His time-price had dropped more than 70 percent."¹⁷

Gilder shows here that the costs of a well-known American tradition have significantly decreased for wage earners between 1986 and 2021, using the Time-Price concept of Pooley and Tupy.

In March 2026, Marian L. Tupy publishes an article titled Measuring Affordability in Time, Not Dollars Paints a Different Inflation Picture on the Cato Institute website, in which he extends his Time-Price concept from commodities and advises applying it to a wide range of products and services. He writes: "There is a deeper issue in the way we discuss these numbers. We focus almost exclusively on dollar prices. We see a higher sticker price and infer that life has become less affordable. Economists call this cognitive shortcut money illusion — reacting to nominal prices without accounting for income changes. But households do not consume dollars. They consume goods and services purchased with the fruits of their labour. The relevant question is not simply whether prices are rising, but how many hours of work are required to purchase what we need and want. If wages rise faster than prices, the burden of obtaining goods falls — even if the nominal price increases. If wages lag behind prices, the burden rises — even if inflation appears modest. This is the logic behind ‘time pricing’. Instead of measuring affordability in dollars, we measure it in hours."¹⁹

I fully subscribe to the above line of reasoning. Nominal prices, and even inflation-adjusted prices, give an incomplete picture of the actual costs and purchasing power. The basis must be time.

I would like to share two additional sources that fit this line of thinking.

The National Low Income Housing Coalition is an organization that expresses the affordability of rental housing in American states in the number of hours that someone with the minimum wage must work per week to be able to rent it for a month. They indicate, for example, that someone in New York with the minimum wage must work 108 hours per week to be able to rent a modest one-bedroom flat for one month.²⁰ This shows that the region is completely unliveable for people who earn the minimum wage.

The Swiss bank UBS has published purchasing power figures for world cities 17 times between 1971 and 2018.²¹ These publications contain data on the number of minutes and hours that must be worked in certain cities to be able to afford certain goods. In Amsterdam, for example, someone must work an average of 7 minutes to be able to buy one kilogram of bread, and in Nairobi 44 minutes.²²

We see that there is sometimes talk of Time-Price: the amount of time that someone must spend on labour to be able to afford something with the earnings. For example: someone must work 15 minutes for one kilogram of flour. Sometimes there is talk of purchasing power based on a certain amount of time investment in work. For example: with the earnings from one hour of work, 4 kilograms of flour can be bought.

Below are the most important sources in a clear timeline:

I introduce the concepts Minimum Wage Hourly Command - hereafter abbreviated as MWHC, and Minimum Wage Command Ratio - hereafter abbreviated as MWCR. Because the concept was clearly defined, I was originally inclined to follow the direction of Pooley and Tupy: the costs of a good or service expressed in the time that must be worked to be able to purchase it. However, I find it less intuitive than the quantity of goods and services that can be purchased with the earnings from one hour of work. I therefore choose the direction of Brown, Hopkins, Simon, Lebergott and Nordhaus. With MWHC, it is expressed how many units of a certain basic necessity, product or service can be purchased with the net income from one hour of labor performed at the legal minimum wage.

When calculating MWHC, the prices and wages from the same area are used. For example, the legal minimum hourly wage in Romania is not used to calculate the MWHC for a product from a Dutch supermarket. This would namely cause problems: currency would play a role, and it is not realistic. Almost no one lives in the Netherlands on a Romanian minimum wage and almost no one lives in Romania on a Dutch minimum wage. The Dutch minimum wage is used for the Dutch product and then the Romanian minimum wage is used for a comparable product in Romania in order to be able to make a comparison. If an area does not have a minimum wage, I will not include it in the statistics and comparisons. The minimum wage from the age of 21 is used. In the case that an hourly minimum wage is established, that will be used. If it is established per month, the net salary will be divided by the average number of hours that are contractually established and paid in that area for a full-time employment. I use only the net hourly wage: without allowances, holiday pay, holiday hours and benefits. To get from a gross hourly wage to a net hourly wage, we look at what one on average retains net per month with the average number of hours that are contractually established and paid in that area for a full-time employment. The prices I use are consumer prices, including all applicable taxes. The official currency of the area is used, there is no need to convert. The currency is namely irrelevant for calculating MWHC.

With MWCR, it is indicated in a ratio how much higher or lower the purchasing power is in an area regarding a certain unit, compared to another area or an average of a group of areas.

The word area is used deliberately. If I were to use the word country, we could not, for example, apply the concepts to states within the US where different minimum wages apply. An area can thus be a (partially recognized) country, a state within a federal system, an autonomous region, or another type of region where a legal minimum wage applies.

To ensure that the MWHC values are intuitive numbers that can be compared with each other within certain categories, I use the following units for calculating the values.

For diesel, petrol and LPG, the average consumption per fuel type²³ has been taken into account, hence the figures differ. Ultimately, it is about the number of kilometres someone can travel with a certain budget. I have chosen a travel distance of 6 kilometres to calculate the consumption. Note that MWHC values cannot be compared between travel by car and public transport. Here, for the car, only the fuel costs per kilometre are looked at, and that is only part of the costs per kilometre. Also, multiple people can sit in one car and the prices for public transport are per person.

Furthermore, MWHC and MWCR can be calculated for individual products. For example, a comparison can be made between the number of kilograms of all-purpose flour in the Netherlands and the rest of the EU that can be bought in the supermarket with the earnings from one hour of labour performed at the legal minimum wage. The comparison can be made for any product or service that is comparable in properties between two areas.

The formulas to calculate MWHC and MWCR are simple, the difficulty lies in gathering the source data. Below are the formulas needed to arrive at MWHC and MWCR.

a) Nominal net monthly minimum wage (if the minimum wage is legally established per hour)

b) Nominal net monthly minimum wage (if the minimum wage is legally established per month)

c) Number of actual hours worked

d) Net earnings per actual hour worked

e) Minimum Wage Hourly Command of an area

f) Minimum Wage Command Ratio between two areas

g) Average Minimum Wage Hourly Command of a group of areas

h) Minimum Wage Command Ratio between an area and a group of areas

Example of the calculations of MWHC and MWCR between the Netherlands and Romania for electricity:

a) The Netherlands (EUR): (14,99 * 169) -  200,31 = 2.333

b) Romania (RON): 4.325 - 1.626 = 2.699

c) The Netherlands: 169 - 21 = 148

    Romania: 174 - 21 = 153

d) The Netherlands (EUR): 2.333 / 148 = 15,76

    Romania (RON): 2.699 / 153 = 17,64

e) The Netherlands (EUR): 15,76 / 0,2558 = 61,61

    Romania (RON): 17,64 / 1,5193 = 11,61

f) The Netherlands versus Romania: 61,61 / 11,61 = 5,31

This means that someone in the Netherlands can purchase 5.31 times the amount of electricity with the earnings from one hour of work compared to someone in Romania.

I have very consciously chosen to use the minimum wage and not the average or median income. The minimum wage namely already contains certain information. A democratic society that enforces a legal minimum wage thereby indicates that one must earn at least a certain amount of money for a certain amount of work to be able to lead a dignified life. Because it concerns the minimum income, and thus in principle everyone who works (legally and with an employment contract) should not fall below it, MWHC will show that some people in Europe fall below the threshold of an acceptable subsistence minimum in terms of purchasing power. Current concepts for measuring and expressing purchasing power provide insufficient information to clearly see if there are groups that are left behind and get into trouble.

The advantage that combining purchasing power per hour worked and the minimum wage contains useful information is also immediately a disadvantage. Theoretically, it could be that a country has a low legal minimum wage and that MWHC shows that people's purchasing power in that country falls below the threshold, but that no one in that country actually earns the minimum wage. This is of course not the case anywhere, but the size of the group that earns the minimum wage will differ per area, meaning MWHC and MWCR values say nothing about the number of people who get into trouble.

There are three primary things for which I want to use the results that flow from MWHC and MWCR.

First, I want to use the figures to make clear which sectors/products/services/basic needs have unnaturally high prices in certain regions. These high prices can be due to a lack of fair competition, corruption, a lack of innovation, stifling bureaucracy, etc. In theory, many prices in terms of purchasing power within the free trade area of the European Union should be close to each other, because large differences should make it attractive for entrepreneurs to fill that gap. This often does not happen, and I have the feeling that there are many sectors that maintain artificially high prices. This is bad for the consumer and the economy.

Second, I want to demonstrate that the minimum wage in some areas is absolutely not high enough for a dignified existence. It is known that the damage that poor living conditions - caused by too low an income - inflict on the individual does not end with the individual. This costs society money.

Finally, I would like to make clear that people who perform comparable functions and work the same number of hours in different areas have a completely different local purchasing power. This indicates that the time of an individual in, for example, Romania is simply valued less than that of an individual in the Netherlands. This fuels feelings of inferiority in individuals and groups. It is also a driver behind migration. With this, I want to make clear that the necessity to migrate as a worker is in many cases completely determined by external factors that cannot be influenced by an individual.

I will publish separate working papers on these three objectives.

I would like to highlight the Netherlands and Romania to give an example of the results. I have lived the largest part of my life in the Netherlands and I have lived in Romania in recent years. Many purchasing power differences have already struck me in daily life, but I would like to see them in numbers. Below, I share graphs where the differences are clearly visible. Later, this website will include MWHC and MWCR data for all EU member states that have a legal minimum wage. The sources on which the following results are based will be findable on the country-specific pages.

The results regarding the MWHC of fixed and mobile internet are not surprising at all. It is known that Romania has good internet connections at sharp prices. This is partly because Romania skipped DSL and thus started laying fibre optics relatively early.^24/25/26 Students themselves laid Ethernet cables to allow every flat in a building to use the fast internet connection. As a result, an entire building often only paid for one internet subscription.²⁷ Surprisingly, prices have not increased enormously over the years.

These results are also very explicable. The Netherlands promotes the use of electricity and disconnecting from gas.²⁸ Romania does the opposite.^29/30 Note that the results are about kWh of energy and not kWh of useful heat. Despite the purchasing power being higher in the Netherlands for gas, heating your house with electricity using a heat pump is often cheaper, for example.

An important note for this graph is that in Romania only 6% of people rent. Almost everyone owns their home.³¹ In the Netherlands, the proportion of renters is much higher.³²

From these results, it is very clear that in the Netherlands and Romania, LPG is by far the cheapest option per kilometer driven. There is also a shocking difference in the affordability of fuels for someone who earns the minimum wage between the two countries. This means that mobility with a passenger car in Romania for people with the minimum wage is significantly lower than for people in the Netherlands from the same group.

An explanation for the fact that traveling in Romania by bus/tram/metro is relatively cheaper per 6 kilometers than by train/bus/tram/metro in the Netherlands and train in Romania is that fixed prices apply for almost all routes. People pay between 3 and 5 RON, regardless of distance.^33/34/35 For public transport in the Netherlands, a base fare and per kilometer rate are used.^36/37 This does make it difficult to calculate the MWHC values for Romania accurately. An estimate of the average distance traveled must be made based on sources.

What makes this result extra distressing is that the quality of tap water in some places in Romania is so poor that you cannot drink it with peace of mind.^38/39

For the Netherlands, the prices used are from Albert Heijn, Plus, and Dirk on 20-08-2026. For Romania, the prices used are from Mega Image and Auchan on 20-08-2026. Normally, we use the average of three supermarkets, but in Romania, unfortunately, there are not three supermarkets with more than 4% market share that publish their prices online. All the chains we have used now have a market share of more than 4%.^40/41 The basket for drinks consists of: 1.5 litres Pepsi Regular, 1 litre semi-skimmed milk, 1 litre chilled orange juice, 1.5 litres sparkling water (no-name/own brand), 1 litre Heineken (5% alcohol). Everything is excluding deposit. The basket for food consists of: 1 kilogram bananas (not organic), 1 kilogram all-purpose flour, 6 eggs, 500 grams peanuts (unsalted), 500 grams minced beef.

As can be seen in the above table with MWCR values, life in the Netherlands for someone who earns the minimum wage is in most cases significantly cheaper than for someone in Romania. Only for fixed and mobile internet and travelling by bus/tram/metro is the purchasing power per hour worked higher in Romania, although with travelling by bus/tram/metro, the note must be made that one pays a fixed rate per route. Someone who always only travels 2 stops to work pays relatively more per kilometre than someone in the Netherlands. Someone who, for example, works full-time as a shelf stacker in Romania cannot in any way lead the same life as someone who works full-time as a shelf stacker in the Netherlands. The Romanian will more often be cold in winter, will be able to travel less, will be slower to switch from gas to electricity, will live in a smaller space when renting, will have the greatest difficulty staying within budget for groceries, and will be able to consume less water. However, the Romanian will be able to take out a fast fixed internet connection and a mobile internet subscription for a nice amount.

In the coming period, I will publish additional working papers on the three objectives that I have formulated in this publication. I will also calculate and publish MWHC and MWCR values for each EU member state. In addition, the sources that have been used to arrive at the results in the above graphs will be published on the country-specific pages. And in the case of fuel types, electricity will be added in the future to compare the cost of consumption per kilometre of electric cars with petrol, diesel, and LPG.