From: Jerry Levy (Gerald_A_Levy@MSN.COM)
Date: Thu Dec 29 2005 - 21:57:21 EST
> Why do you want to measure it exactly? In principle, SNLT empirically > expresses a ratio between input of labour hours and output (either a > physical output or an output value). This is not measurable exactly, > except in very specific cases, in particular, because a fraction of > output may not be sold (i.e. it's socially unnecessary), or sold at a > later date. You have an average (or more usually, a modal average) > labour expenditure per product unit or per product volume, which is > the norm for an industry. Hi Jurriaan, I don't think there is, within the context of internationalized production, a norm for labor intensity. To the extent that there are norms for labor intensity then they tend to be specific to social formations or urban and regional areas rather than branches of production. Within branches of production -- including the one you cited, the automobile industry -- both capital and labor are aware of these international differences. [Ask any UAW member who has made a plant tour of a Japanese auto plant and the first thing that s/he will tell you will concern the difference in the intensity of work.] Before I comment briefly on some side issues raised by your post, I want to reiterate what I see as the issue: while it is certainly possible to empirically calculate the quantity of (productive) workers and the hours that they worked, one can't treat all labor hours as equal due to differences in labor intensity and skill. Furthermore, there is no reasonable way that differences in labor intensity can be "reduced" to an international average or standard. The reason is quite simple -- there is no international standard for labor intensity. There is also no reason to believe in this case that the market leader -- the dominant capital -- sets the standard for labor intensity which workers in other firms internationally tend to follow. The empirical issue then is how this is dealt with. While I don't think that reliable estimates for differences in labor intensity can be obtained (there are a whole host of measurement and practical problems with obtaining this data, which -- to the extent that it exists -- tends to be proprietary), I'm not suggesting that Marxian empirical research into unequal exchange be abandoned. Rather, I'm asking how the empirical results of those studies should be _qualified_ to account for this issue. One could, for instance, ask whether there is reason to believe that the magnitude of differences in labor intensity is statistically significant and, if so, whether those international differences tend to increase or decrease the magnitude of unequal exchange. > The transfer of value you can > measure e.g. by comparing factory-gate or export prices and final consumer > prices (cost structure or cost composition showing who gets what from the > product value). I don't think it's that simple. One can't assume that factory-gate prices correspond to costs of production. Firms tend to be very secretive about their actual costs of production and treat it as proprietary information. One can see to what extent firms view this accounting data as for their 'eyes only' by the extent to which they have historically resisted trade union demands to 'open the books.' Of course, they are required to show the state some data for tax purposes but those accounting numbers tend to be skewed since the whole object from a firm's perspective in preparing these reports is to lower their tax liability. Furthermore, there is not much in the way of reliable cost accounting in annual corporate reports either (for one reason because they know that unions will obtain copies). > Average Labor Hours per Vehicle assembled > 1998 2004 % change 2003 to 2004 > DCX 46.81 35.85 4.2 > Ford 36.76 36.98 4.2 > GM 46.52 34.33 2.5 > Honda 31.90 32.02 0.2 > Nissan 30.70 29.43 (-4.8) > Toyota 30.25 27.90 5.5 These numbers take no account of product mix: an apples vs. oranges issue arises when firms are producing in different percentages different types of cars. (My suspicion is that the decrease in labor hours/vehicle for GM and Ford is due largely to a relative increase in the quantity of smaller cars produced.) > Of course, this refers only to the assembly of the car, it assumes there > are parts, these parts also represent labour effort. So, to get the total > labour cost of producing the car, you have to count up also the > average labour hours involved in all the parts. Yes, that's a good point. > That's a lot more hours obviously, I don't have that data handy at this > moment. Labor intensity at auto supplier plants (for a whole host of reasons) tends to be higher than in assembly plants, btw. It's also important to note that the extent to which the 'content' of the automobile is produced by domestic supplier firms or domestically/internally by the parent corporation varies very significantly internationally (due, in great part, to differing auto content laws -- or the absence of content legislation -- in different nations). > "While the labour costs in developed countries are about 30-35% of > sales, it is just 8-9% in India. Domestic industry sources say that for > global auto components majors, the total average cost of production is > cheaper by about 30% in India." I wouldn't take estimates promoted by industry sources at face value -- they have their own agenda. E.g. US auto corps tended to under-estimate labor productivity in US plants and over-estimate it in Japanese plants because it was an argument that they used at the bargaining table explaining the basis for their demands for union concessions. In solidarity, Jerry
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