Changes in Unit Labor Cost: Causes and Implications

Factors Influencing Unit Labor Cost

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Changes in the unit labor cost are caused by changes in

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Finkel and Tuttle found that the capacity utilization rate, unit labor costs, rate of inflation, and foreign competition were the four major variables that affected the aggregate profit margin. Per-unit labor cost is a function of the percentage change in hourly wages minus the percentage change in productivity during some period of time.