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

["Perelman, Michael" <MPerelman@xxxxxxxxxxxx>]

Anthony wrote:


>Where does technology embodied capital equipment fit in this
definition?  The chip has more value not because it has high labor
content (unless you want to count dead labor but that opens up another
box) but because of the process by which chips are made.  Labor input
into chip manufacturing is actually quite low.


Value added usually refers to gross value added, without taking account
of the depreciation of plant and equipment.  For that reason, it is not
a particularly useful concept.  Value-added also reflects market power,
which is reasonable, because the term in the context discussed here is
usually applied as a measure of business effectiveness.
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