This measure calculates the unit labor costs through the output labor cost and productivity. The background information of the KLIM measures and its methodologies are presented in this document, published by Groningen Growth and Development Centre researchers of the University of Groningen in the Netherlands.

31 countries are supposed to contain the while economy series whether 23 countries are its manufacturing part. The research plan for KILM's work concerning the measures towards productivity is posed in this document. It measures the cost factors pressing the labor market. The result is calculated by dividing average labor costs ration by output per worker at the hours worked (his or her productivity). Price levels are highly affected by the price of one production unit (or item) paid for its producing. Such models of macroeconomic wage-price sector as the national income forecasting model uses the unit labor costs concept widely. Both nominal and real terms are used if unit labor cost measurement.

The labor cost of the output production is closely connected with the productivity that is represented by ULCs (Unit labor costs). In case the unit labor cost increases then the labor part in the production cost rises as well. The threat to the macroeconomics may occur when the labor costs rise exceed the productivity rise while any other costs are not adjusted in return.

ULSs are supposed to be understood as the indicator of the goods cost competitiveness but not of its general competitiveness. When dealing with advanced economies, unit labor cost, as an ultimate measure of the labor price, should be monitored referring to the cost of capital changes.