Declining competitiveness is best captured in a single indicator unit labor costs, which measure the average cost of labor per unit of output.

Unit labor costs have risen, and potential output growth has fallen.

Persistently weak labor productivity growth has created a situation in which unit labor costs do not fall, even if real wages remain stagnant or decline. Indeed, despite a 1.3 drop in real wages in 2011, unit labor costs remained unchanged.

Unit labor costs in Greece, Portugal, Spain, and Italy grew 20 30 faster than in Germany in the euro s first decade, and somewhat faster than unit labor costs in northern Europe as a whole.

How is this possible? After all, higher productivity should bring lower unit labor costs.

Indeed, despite a 1.3 drop in real wages in 2011, unit labor costs remained unchanged.

Competitiveness, which is usually measured in terms of unit labor costs, is a relative concept.

The family economic unit has always been dependent on specialized labor done by family members.

Persistently weak labor productivity growth has created a situation in which unit labor costs do not fall, even if real wages remain stagnant or decline.

The resulting rise in output per worker, together with slow wage growth, reduced unit labor costs.

They may think that, in the long run, parities will reflect developments in relative unit labor costs.

Since the euro s introduction, unit labor costs have risen dramatically faster in France than they have in Germany.

Unit labor costs reflect compensation levels and productivity gains in productivity can offset the effect of wage growth.

The result has been elevated unit labor costs relative to France s peer group (especially Germany) and stubbornly high unemployment.

In one way, this is a sign of economic progress the output of each unit of labor is constantly rising.

A reduction in unit labor costs can also increase competitiveness only to the extent that it actually results in price reductions.

Lower productivity and higher unit labor costs eroded firms' willingness to hire, leaving Europe with chronically higher unemployment than in the US.

A rapid reduction in unit labor costs, through structural reforms that increased productivity growth in excess of wages, is just as unlikely.

Since 2001, unit labor costs have been growing faster than real GDP and employment, undermining the economy s competitiveness vis à vis developing countries.

There is a vast difference between unit labor costs real wages adjusted for productivity in Germany and in the heavily indebted southern countries.

After a decade that saw wages grow faster than productivity, unit labor costs (and the real exchange rate based on those costs) appreciated sharply.

Likewise, competitiveness losses have been partly reversed as wages have lagged productivity growth, thus reducing unit labor costs, and some structural reforms are ongoing.

In the first decade of the euro, nominal unit labor costs rose sharply in Greece, Ireland, Italy, Portugal, and Spain, while virtually flatlining in Germany.

The German solution to this conundrum keeping wage growth below that of productivity, thereby reducing unit labor costs took more than a decade to yield results.

Each household is considered as an economic unit, creating job for its own members, attracting local labor, thus helping reduce poverty and raise people's living standards.

High unit labor costs and unemployment rates are responsible, in turn, for reducing the trend rate of economic growth, mainly owing to under utilized labor, while the combination of lackluster growth and an ever mounting welfare burden has resulted in chronic budget deficits.

The latter is certainly true, but it does not solve the fundamental problem that a country s relative unit labor costs can decline only if another country s rise.

But gains in measured productivity growth from this source are not permanent changes, so a large part of the reported reductions in unit labor costs are temporary.

But it left China in a deepening hole increasingly deficient in jobs per unit of output, it needed more units of output to absorb its surplus labor.

(In 2005, long before the crisis, I called, on behalf of the ECB s governing council, for appropriate surveillance of a number of national indicators, including unit labor costs.)

In a monetary union, discrepancies in wage growth relative to productivity gains that is, unit labor costs will result in a chronic accumulation of trade surpluses or deficits.

Then a decade of nominal wage growth that out paced productivity gains led to a rise in unit labor costs, real exchange rate appreciation, and large current account deficits.

Europe as a whole is barely above zero growth, with large variations among countries, though with some evidence of painful re convergence, at least in terms of nominal unit labor costs.

a Includes Office of Aviation Safety Unit, Budget and Cost Control Unit, Administrative Planning and Policy Unit, Board of Inquiry Unit and United Nations Volunteers Support Unit.

Productivity growth is not about working longer it is about generating more output per unit of labor input. Any undercounting of output pales in comparison with the IT assisted undercounting of working hours.

A rapid reduction in unit labor costs, via acceleration of structural reform and productivity growth relative to wage growth, is also unlikely, as that process took 15 years to restore competitiveness to Germany.

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The caste system and labor laws prevent an efficient labor market.

Lumpy Labor

Includes the Immediate Office of the Director of Administration, Aviation Safety Unit, Budget and Cost Control Unit, Administrative Coordination Unit and Administrative Planning and Policy Unit.

Forced labor, child labor, and discrimination in the workplace must be eliminated.

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