In this video we look at the important concept of unit labour costs – a key measure of international price competitiveness.
What do we mean by unit labour costs?
Unit labour costs are defined as the average cost of labour per unit of output produced
Formula for calculating unit labour costs is:
Total labour cost ÷ total level of output
What are the key factors that determine unit labour costs?
Rate of change of wages in the labour market
Rate of change of labour productivity
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