Final answer:
The statement is true. The proportion of a company's operating costs that are labor costs is called the degree of labor intensiveness, indicating a high reliance on human labor relative to other costs.
Step-by-step explanation:
The statement that the proportion of an employer's total operating costs comprised of labor costs is termed the degree of labor intensiveness is true. This concept reflects the level of labor input required relative to other inputs such as machinery or materials. A business is considered to be labor-intensive if it has a high proportion of labor costs in comparison to other operational costs. Labor productivity and its cost implications can be influenced by factors such as economies of scale, the prevalence and impact of unions, as well as the marginal cost of labor for firms in different market structures such as a monopsony. When labor is a significant expenditure for a company, shifts in labor costs can have a notable effect on their overall cost structure and decision-making processes.
The degree of labor intensiveness refers to the proportion of an employer's total operating costs comprised of labor costs. It measures how much of a firm's expenses are attributed to labor. For example, if a company's total operating costs are $100,000 and labor costs are $75,000, then the degree of labor intensiveness would be 75% ($75,000/$100,000).