What is Direct and Indirect Labor definition/concept

Labor is a basic element in production and is defined as the cost of time that workers invest in the process of elaborating a product. This concept includes wages, risk premiums , night work and overtime, as well as the taxes that are associated with each worker. Direct and Indirect Labor

In other words, it is the human capital of a company. Traditionally, labor is classified into two sections or categories: direct and indirect.

Difference between the two modalities

The direct modality refers to workers who participate in the production of a product and who have contact with it. Thus, a textile worker, a fabric cutter or that worker who cleans a fabric are examples of direct labor.

On the contrary, workers who are not expressly involved in the development of a product, but who are somehow important, constitute indirect labor. In this way, a supervisor in a textile factory does not manipulate the product, but intervenes in the transformation process. A factory cleaning worker would be another example of this category . Direct and Indirect Labor

The distinction between one modality and another is important in several ways. On the one hand, it allows you to plan your business needs and, on the other hand, it is a way to properly organize an entity’s budgets.

Robotization and universal basic income

Certain routine tasks no longer require known labor. The evolution of robotics and artificial intelligence is causing the destruction of the workforce. Machines can perform mechanical actions without the need to employ workers. Robots are rapidly taking the place of production workers, and in recent years machines have begun to replace more skilled workers as well.

In this sense, there are robots that do financial analysis and all kinds of intellectual tasks through the use of mathematical algorithms.

If the trend towards robotization continues to increase, it is very likely that the work activity will cease to exist in its traditional version . Direct and Indirect Labor

For this reason, there is already talk of a universal basic income . This type of income would be promoted by the state and would guarantee the basic needs of citizens.

Currently, this proposal seems like an unattainable dream, but it is supported by Nobel Prize-winning economists in economics or by world leaders such as Elon Musk, the founder of Tesla and PayPal. Some tests have already been carried out in countries like Finland and Canada with good results. Direct and Indirect Labor

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