Large profit in comparison to the
amount invested in a business results in high levels of capital accumulation, which in turn,
leads to the growth of output. However, if there are low profits, then the cash flow of firms
decreases putting pressure on liquidity and making firms react more strongly to drops in
demand. In this situation, firms will push to decrease the cost of labor, which can lead to
unemployment. Particularly, once unemployment is already high, the firms can use their
added leverage to obtain more favorable employment conditions from workers, and stagnating
labor costs can be linked to decreases in the stimulus to labor productivity