On The Choice Of The Labour Market And Employment Policy The Government

The reform and opening-up brings forth the continuous economic growth as well as the experience of solving problem of employment by market methods. Otherwise, the world economy goes through recession while the reform is under further advance. The continuously increasing unemployment rate in the mid 1990's seriously affects the development of China's society, politics and economy. The internal causes of domestic reform and external factors of China's entry into WTO and international influence owe much to this situation.The 16th national congress of CPC was held successfully in Beijing on Nov.2002. Jiang Zemin explicitly put forward "building a well-off society in an all-round way". And full employment is not only a significant way to build a well-off society but also an important reflection of well-off society. Therefore, the problem of employment must be solved to the letter either in regard to politic stability or for the fundamental interests of Chinese people.First, the article testifies "it is highly efficient to allocate resources by market mechanism" by importing Utility theory and Equilibrium theory and draws the conclusion that institutional cost may lead to some social problems such as unemployment and polarization of rich and poor. Furthermore, the running preconditions of labor market mechanism include the following: free flow of laborers, wage as the reflection of labor market value, perfect social service system, etc. The article briefly introduces the theories and policies of employment in the west world to draw lessons from its long market practice and mature market mechanism.Second, as the article pointed out, the problem of unemployment was not solved satisfactorily or the period of full employment was too short though various solutions were involved from the early stage of the PRC to the holding of 16th national congress of CPC. The key element among all complicated reasons for it rests with the ill treatment of the dialectical relationship between labor market and employment policies.Third, the development of labor market in China goes through many twist and turns. Limited time and poor experience result in many problems, such as the tremendous gap between demand and supply, comfortless flow of laborers, market segmentation, distortion of wage, imperfect social security system, incomplete laws and regulations, lack of information service, etc. After the detailed investigation of current labor market in China, the article draws the conclusion that only "invisible hand" of market can not do well and the "visible hand" of government has to be given fully to offset the insufficiency of market mechanism. The deepening of market reform, which contributes to the efficient allocation of labor resources and improvement of operating availability, must be coupled with the implementation of macro employment policies by government, which leads to the creation of posts, the solutions of structural and quantitative contradiction between demand and supply and the maintenance of social fair.Last, the article brings forward some concrete measures to release China's employment pressure at present and in the long run.The creative points of this article lie in the analyses of employment problem in the respect of labor market and the draw of concrete measures to release employment pressure by means of dealing with the dialectical relationship between labor market and employment policies.