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 _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
