labor-intensive

Requiring or having a large expenditure of labor in comparison to capital: "Intrigue and subversion are labor-intensive undertakings" (George F. Kennan).

A process or industry that requires large amounts of human effort to produce goods.

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Requiring large pools of workers. Said of an industry in which labor costs are more important than capital costs. Deep-shaft coal mining, for instance, is labor-intensive.

Industry or company where labor costs are more important than capital costs. Labor intensive companies generally have greater earnings stability than Capital Intensive ones, because the former have a higher percentage of variable costs, while the latter have a higher percentage of fixed costs. However, labor intensive firms may experience difficulty during inflation due to employee discontent resulting from the decline in real earnings. But higher wage rates would be passed on in higher prices.

A term describing industries that require a great deal of labor relative to capital (compare capital-intensive). Examples of labor-intensive industries are forms of agriculture that cannot make use of machinery and service industries, such as restaurants.

Labor intensity is the relative proportion of labor (compared to capital) used in a process. The term "labor intensive" can be used when proposing the amount of work that is assigned to each worker/employee (labor), emphasizing on the skill involved in the respective line of work.

See also

• Capital intensity

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