This case also presents a classical scenario of how inappropriate wage levels influence unemployment through the context of real unit labour costs. Relative wages imply the ratio of relativity and can be amongst variables based on differentiation of gender (male/female), age brackets (youth/adult) or can be labour vs. capital. Relative employment growth (such as growing number of female employees to male employees) illustrates the industry composition in terms of gender representation. Age bracket relativity depicts substitution impact, while labour vs. capital substitution shows advances in prices for either. Essentially, these tend to illustrate an incrementing trend towards inappropriate wages because the replacement is fundamentally expensive than the variable existing to be replaced. Subsequently, cost of production would rise; increasing the final cost of output, and the price increase would be the bottom-line, enhancing inflations (Sloman, 2006). This relates to another case of inappropriate wage levels leading to inflation in the light of relative wages. . The Roles of Unit Labor Costs, Real Unit Labor Costs, and Relative Wages in Affecting Employment and Unemployment.
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