A freelance translator's income can be calculated by the following formula:
r * p * h * d * w
r = rate
p = pages per hour
h = hour worked per day
d = days worked per week
w = weeks worked per year
Let's try plugging in some numbers. Say that you charge $30 per page, you translate 2.5 pages per hour, you work 4 hours per day (that's actually optimistic for hours worked in a corporate environment), 5 days per week, and 50 weeks per year. Call this person Average Allie.
$30 * 2.5 p * 4 h * 5 d * 50 w = $75,000
Now, let's say you charge $40 per page, and translate 2 pages per hour, with time worked the same (Quality Quinton).
$40 * 2 p * 4 h * 5 d * 50 w = $80,000
Now, let's say you charge $30 per page, but translate 3 pages per hour (Fast Frank):
$30 * 3 p * 4 h * 5 d * 50 w = $90,000
Curiously, it seems to generally be more lucrative to be fast than expensive.
How about people who work for very low rates ($10/page, or $0.05 word — certainly not unheard of), but work long hours (8 hours/day, no vacations) to make up for it? I'll also assume that they're not very fast (1 page/hour, because those charging the lowest rates are usually the least skilled, and the unskilled are usually slow too). Call this person Poor Peter.
$10 * 1 p * 8 h * 5 d * 52 w = $20,800
When people say that it's impossible to make a living as a translator, I think that they must have a scenario like the one above in mind.
To me, it's pretty obvious that the way for people like Poor Peter to improve their incomes is not by working more (increasing the values of h, d, or w), but by becoming better translators, so that they can work faster (increasing p), and charge more (increasing r)