Year-over-year productivity grew at a 2.4% clip in the second quarter, compared to 3.2% for unit labor costs.
One of the major reasons, after all, that companies are outsourcing their operations to Asia is for the labor costs.
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However, the airline is trying to make up for the higher labor costs through efforts like fleet replacement aimed at deriving fuel efficiencies and the recent spin-off of its regional carrier, American Eagle to access more competitive rates from other carriers.
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What really matters for jobs and competitiveness is not consumer price inflation, but the rate of change of unit labor costs. (Unit labor costs are wage rates adjusted for changes in productivity.) A recent study from the Boston Consulting Group suggests that Chinese unit labor costs will grow at about 8.5 percent per year over the next five years.
While labor costs account for about 31% of all operating costs at American, they stand at around 22-23% for Delta and United Continental.
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Meanwhile, costs for labor and materials are rising as demand picks up.
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It's a signal that labor costs for businesses are not picking up even though the unemployment rate hovers at the lowest level in a generation.
Hon Hai and other companies have moved some operations to countries such as Vietnam and Mexico, where costs for labor or transportation to end markets are lower.
Slowing demand for goods and rising labor costs in the city of Guangzhou, home to about 8.8 million people and located roughly 100 miles from Hong Kong, has cut its ability to compete.
Several crop growers, including the Florida Fruit and Vegetable Association, the National Council of Agricultural Employers and the North Carolina Growers' Association filed suit against the Labor Department, arguing that the agency acted inappropriately and that its new guidelines would raise labor costs for growers.
There are many reasons for this reversal: domestic energy costs are falling and Chinese labor costs are rising, for instance.
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It had relatively high labor costs, which encouraged the search for labor-saving innovations.
Higher labor costs are the incentive for employers to find ways to use less labor.
The costs for commodities like cotton, along with labor and transportation costs have been rising.
Labor costs, for instance, will likely remain stable, resulting in higher margins for companies.
The commitment comes as economics are changing for making goods overseas: Labor costs are rising in Asia, while oil and transportation costs are high and increasingly uncertain.
Still, the combination of rising costs for commodity, labor, and transportation could weigh on company margins going forward.
The rise in costs stemmed from higher costs for energy, labor and consumables.
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Indeed, if Northwest succeeds in its battle with the machinists, it could become a template for other big airlines to slash labor costs and move toward profitability.
The company highlighted the positive aspects of pricing actions and product cost reduction, but both of these were more than offset by higher costs for materials and labor.
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Developing this kind of software would save the industry millions in labor costs, allow for more flexible redesigns, and help pull one more expensive chunk of journalism out of the pre-19th century.
Indeed, if Northwest (nasdaq: NWAC - news - people ) succeeds in its battle with the machinists, it could become a template for other big airlines to slash labor costs and move toward profitability.
It will be very hard and very costly to reduce other cost competitiveness barriers significantly enough to compensate for this stratospheric rise in unit labor costs, even as every move in this direction is worth taking.
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If Robert Reich wants to praise Ford for his relentless effort to reduce labor costs, drive his competitors out of business, make horse-drawn transport obsolete, and become fabulously wealthy by offering the best valued products to the largest number of customers, sign me up.
In preparing a proposal for a new park, we estimate our costs for running a park (a very labor intensive proposition), compare that to the revenues from the park, and bid a certain amount of rent we will pay each year as a fee for the rights to operate the park.
For decades, plentiful Chinese labor kept down costs of a range of goods bought by Americans.
The answer is nowhere because our labor surplus caps employment costs for major corporations.
You only need one or two international hiccups for all the potential savings in outsourced labor costs to be eroded.
This was further compounded by increasing costs for mining supplies and labor.
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These are just some examples from a recent study by the Boston Consulting Group showing how increasing labor costs in China are narrowing the labor arbitrage that has existed for many years.
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