This is what I've heard: you don't charge by the hour. You charge by the stitch: 1/2 cents per stitch (for hand knitted things...don't know about a machine knitted item).
It adds up.
And how fast or slow you knit isn't a factor. You'll just have an anxious customer if you knit too slowly, or not often enough each day.
It's not too hard to figure out how many stitches in a given garment.
When you factor in the "stitch gauge" (let's say the gauge stated is 5 st = 1" and 6 rows = 1").... then you look at the overall dimensions of each piece of the item. If, for example, a scarf is shown as being 5" wide and 55" long...you know that the scarf is 25 stitches wide and 330 rows long.
330 rows times 25 stitches per row is: 8,250 stitches.
At 1/2 cents per stitch: $41.25 labor
Now, adding in the cost of quality yarn for the scarf, you could sell it for about $55-$65. I saw some very sad
hand-knitted wool scarves at Cabela's (sporting goods store) and they were selling for $99. I about gagged.
With a garment, you'd have to take each piece of the garment and do the math for them individually. I've done it in the past. Also, for a knitted log house blanket. The stitches per item are staggering.
IMHO, it's not possible to make a living by knitting for the average American consumer.
The only way to make a living is to "design" and get your designs into Twist Collective, or another host like that. Quite a few designers over at Ravelry offer their patterns on an independent basis. Not in a big collective like Twist, or Brooklyn Tweed. But you get a lot of exposure when your design is carried by TC or BT. Knitters wait with baited breath for their new collections to be released! And both carry quite a variety of designers.
My girlfriend wanted to "hire me" to knit some scrubbies and dishcloths so she could 'gift' her daughters with a set each. (I had gifted her with a 4-pc set and she loved it so much, she wanted to start giving them to her own daughters)
I told her I'd teach her to knit (for free) and she could knit them herself. She said, no...she doesn't have the time... hmmm, she's retired. So the next day, I gave her a price: $42 per set of 2 dishcloths/2 scrubbies.
And I was figuring materials and the 1/2 cents per stitch. I explained how I arrived at $42, and told her quite frankly "who's gonna pay $42 for a set of dishcloths and scrubbies? it's better to knit them yourself, using your time instead of your checkbook."
Her girls have yet to receive a set of dishcloths and scrubbies from her.
I'm not about to start knitting these dishcloths and scrubbies for less than 1/2 cents per stitch. She should learn to knit herself! But, she'd rather read novels than knit. To each his own, eh?
The green scrubbie is for veggies.
One of my favorite designers "whips up" new sweaters for herself (st st only) using a knitting machine, but adds detailed elements by hand. Her masterpieces are all 100% hand knit.