Exactly what is the "relative unit labour costs" really about?

Question

What does RULC have to do wit globaliztion?

Answer 1

They affect exchange rates and the economy. The level of relative unit labour costs of an economy is an important indicator for the economy’s competitiveness.

Relative unit labour costs. An alternative to price competitiveness is to look at cost competitiveness. This has the advantage of covering all industries: exporters, potential exporters and those competing with imports. However, because of a lack of data the only sensible indicator is relative unit labour costs (say, US ULCs divided by a weighted average of competitors' ULCs, all in a common currency). This excludes profits and prices of materials.

Normalised relative unit labour costs. These are relative unit labour costs adjusted to allow for short-term deviations in productivity from long-term trends. This smoothes out differences in the cyclical position of the countries being compared, but because of the difficulties of adjusting productivity for the cycle it should be treated with care.