DIRECT LABOUR

Workers directly engaged in production, or more broadly connected with the process of converting materials into finished products.

"Direct labour" is a term applied to the major group of employees who work in direct production, as opposed to the "indirect labour" of office, clerical, supervisory and professional staff. Their payroll expenditures are easily traced to units of output and are included in the cost of goods sold. For example, an assembly-line worker in the automobile industry is a direct-labour employee. This category of workers tends to be heavily unionized.

"Today, direct labour is becoming a relatively minor part of the total cost of production in many industries. In electronics it can be as low as 3 percent, […] and even in standardised automobile components, companies report that direct labour costs are only 10-15 percent of total manufacturing costs and falling. Similarly, indirect labour is falling as a proportion of total costs."
(Stopford, J., The Impact of the Global Political Economy on Corporate Strategy, Carnegie Mellon Tepper School of Business, visited 2009-06-11)

"Actual factory size will begin to diminish as equipment becomes more compact, as the efficiency improves, and also as large manufacturers move away from vertical integration. Factories in the year 2010 will employ half the number of a decade earlier. Automation of repetitive and hazardous tasks, along with the outsourcing of relatively low-value-added fabrication operations, will result in the near-elimination of direct labor and related support for those areas."
(Entrepreneur, A peek at the year 2050, 2000, visited 2009-06-11)