Workers' Consumption
Some goods and services bought by enterprises do not enter directly into production of output itself, but are consumed by workers (e.g. work clothing, accommodation, meals, transport, washrooms, medical check-ups).
In such cases it is necessary to distinguish whether items are intermediate consumption or, alternatively, a remuneration "in kind" to employees (for example, fringe benefits such as company cars and meal tickets for private use).
In general, when items are used by employees in their own time and at their own discretion for their own use, they are regarded as remuneration in kind, not intermediate consumption. In that case, they are part of the aggregate compensation of employees, and included in gross value added. But if employees have to use them specifically to do their work, they are included in intermediate consumption, and excluded from value-added.
Read more about this topic: Intermediate Consumption
Famous quotes containing the word consumption:
“The Landlord is a gentleman ... who does not earn his wealth. He has a host of agents and clerks that receive for him. He does not even take the trouble to spend his wealth. He has a host of people around him to do the actual spending. He never sees it until he comes to enjoy it. His sole function, his chief pride, is the stately consumption of wealth produced by others.”
—David Lloyd George (1863–1945)