Labor-Intensive is either a process or an entire Industry that needs a massive amount of labor to manufacture products or services. Typically, the degree of intensity is measured in proportion to the Capital amount needed to manufacture products or services.
Thus, the higher the required labor cost proportion, the more will be the labor-intensiveness in the business or the industry.
Labor-intensive processes or industries basically need massive quantities of effort, especially physically, to complete the needed tasks. In labor-intensive industries, the cost that is associated with securing the required personnel usually outweighs the capital costs that are associated with volume and importance.
Although several labor-intensive tasks and jobs need low levels of education or skill, however, the same doesn’t apply to every position. With the advancement in technology and the need to show productivity, there are numerous industries that have gone beyond the status of labor-intensive. However, there are some that still remain in the race, such as mining, agriculture, hotel, restaurants, etc. Also, economies that are less developed turn out to be more labor-intensive. This situation tends to be a common one as low Income generally means that the business or Economy is unable to afford to invest in exclusive capital.
Talk to our investment specialist
But with low wages and low income, a business can still remain competitive, and that is by employing more workers. This way, companies become more capital intensive and less labor-intensive. When talking about the era that was before the Industrial Revolution, almost 90% of the employed workforce was in agriculture.
Producing food was quite labor-intensive. And then, Economic Growth and technological development increased Labor Productivity, allowed workers to move into different services and decreased labor-intensity.
One primary example of a labor-intensive industry is the agricultural domain. In this industry, jobs are closely associated with the cultivation of food that should be picked without causing any damage to the plant.
Thus, this leads to an extremely labor-intensive effort. On the other hand, the construction industry is another labor-intensive one that needs more hands-on job. Despite the availability of tools and equipment, there must be a person involved with an extensive Range of tasks.
And then, there are several such posts in the personal care and hospitality industries that are labor-intensive and require frequent human intervention to achieve maximum results.