Re: [Pen-l] "high value added labor"

[Sandwichman <lumpoflabor@xxxxxxxxx>]

In corporate consulting-speak "adding value" means finding some
compelling way to charge a client higher fees. I would tend to think
of it as rent for being more nimble than the client.

On Wed, Oct 29, 2008 at 11:30 AM, Sean Andrews <cultstud76@xxxxxxxxx> wrote:
> I'm trying to work out a few aspects of the phrase (and concept) "high
> value added labor" as it is use in mainstream, particularly
> international or transnational economics.  In its use, it appears to
> be speaking about value in almost Marxist terms, but its meaning seems
> to be the opposite.  It seems to take the market price as the index
> and claim that the additional value is evident by the product being
> able to sell by a larger percentage than it was before--this spread
> being relatively larger than that of "low value added labor."  Since
> the latter is usually done--particularly in average commodities like
> clothing or consumer electronics--in low wage countries and the
> former--high value added being stuff like marketing, product design,
> advertising, legal actions to protect trademarks (though this may not
> be included) etc.--in high wage countries, in practice, what it seems
> to actually indicate is that the relative factor cost is more.
>
> But this doesn't really explain it either, because, for instance, many
> branded goods are already trading on a name built up long before they
> hit the market; the marketing bill surely can't account for the
> 20-100% and beyond markup on each individual commodity; and it seems
> like the manufacturers (or the branded contractors and their retail
> partners) count on having to sell a good portion of the stock at a
> deep discount (now I guess I'm just talking about clothes) in which
> case the costs that are really important to recoup are the actual
> production costs, if that.  In any case, the phrase "high value added"
> seems to be a much more ideological phrase than its mathematical
> pretensions would indicate, mostly justifying the international
> division of labor (and its consequent division of the payment through
> the "value chain".)
>
> Just for reference, the place I have heard it most recently (and can't
> find a link) was in some economist talking about what Chinese firms
> wanted to do in the future, which was that they wanted to "move into
> more high value added labor" like marketing domestic Chinese brands,
> etc.
>
> First, I am interested in how accurate my description above is.  Is
> this what analysts mean when they talk about "high value added?"  Is
> this a common and/or legitimate concept in economic
> literature/analysis?
>
> Second, I am trying to find where it comes from, theoretically and
> colloquially; how long it has been used, etc.?
>
> Any guidance on any of the above would be appreciated.
>
> Thanks,
> s
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-- 
Sandwichman
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