Employment is an important social and economic issue, which has long been concerned by western economists, thus forming a unique employment theory. Western economists' long-term research and exploration of employment problems have formed a multi-angle and multi-level employment theory to meet the needs of market economy. For example, the employment theory of classical economics school, Keynes's full employment theory, the employment theory of neoclassical comprehensive school, and the wage sticky employment theory of neo-Keynesian.
(A) the employment theory of the classical school
Say's law is the cornerstone of the employment theory of classical economics school, and its basic connotation is that supply creates demand. The representative economists of this school are Marshall and Pigou. Starting from the perfectly competitive market structure, they think that the prices of products and monetary wages in the market can be adjusted spontaneously according to market supply and demand. The interaction between labor supply and labor demand determines the actual wage and employment level, and the amount of employment when supply and demand are balanced is the level of full employment. Furthermore, as long as there is no wage rigidity, the wage rate can be freely expanded, the market mechanism can freely play a regulatory role, all available labor resources can be used for production, and the labor market can always achieve employment balance. Long-term persistent unnatural unemployment cannot exist, only voluntary unemployment and short-term friction unemployment.
They believe that the solution to the unemployment problem is to eliminate the rigidity of monetary wages, so that monetary wages can change accordingly with market demand. On the premise of free competition, the classical school advocates market regulation and balanced employment, and denies the universality of unemployment. However, we can still understand the emergence of unemployment from another angle. Unemployment is the result of insufficient competition. To solve the unemployment problem, we must first solve the problem of insufficient competition in the labor market.
(B) Keynes's employment theory
Keynes's employment theory is based on the principle of effective demand, which holds that the number of jobs depends on effective demand. The reason why unemployment persists is that there is "insufficient effective demand" in capitalist society as a whole. That is, when the total supply price and the total demand price reach equilibrium, the total demand is insufficient, resulting in more social unemployment, that is, underemployment. The Keynesian theory of promoting employment actually advocates reducing wages, that is, reducing real wages without reducing nominal wages. But the premise is to expand the total demand, because the expansion of the total demand will inevitably lead to inflation, and the nominal wages of workers remain unchanged, but the real wages are relatively reduced. In order to achieve full employment, Keynes believed that we must abandon the laissez-faire economic policy and put forward demand management policies relying on state intervention, thus promoting production and increasing employment.
(C) employment theory of neoclassical comprehensive school
At the end of 1960s, the economies of major capitalist countries fell into stagflation predicament, and Keynesian theory failed. Therefore, economists of neoclassical comprehensive school such as Tobin and Du Shengbei put forward the "structural unemployment problem", trying to explain the complexity of unemployment and inflation with the change of market structure, and think that the incompleteness and structural changes of micro-market have caused stagflation. It is concluded that structural unemployment is a structural imbalance between labor supply and demand caused by the change of economic structure, and the existence of structural unemployment will inevitably lead to the coexistence of unemployment and job vacancies. Because of the strong trade union power, wages are easy to rise and not easy to fall. Although there is unemployment in society, monetary wages will not fall. As long as there are job vacancies, monetary wages will rise rapidly. Therefore, the coexistence of unemployment and job vacancies is transformed into the coexistence of unemployment and rising monetary wages, and then into the complications of unemployment and inflation. This theory advocates solving the structural unemployment problem from the perspective of employment content or employment structure. For example, the government should guide the income policy, that is, the government should take measures to limit the rise of wages and prices to alleviate inflation; Pay attention to improving the labor market and alleviating unemployment caused by changes in the technical structure of the labor market; Appropriately modify and improve the unemployment subsidy system to encourage unemployed people to find jobs.
(D) New Keynesian wage sticky employment theory
New Keynesian labor market theory mainly includes nominal wage stickiness and real wage stickiness. The stickiness of nominal wages is caused by the existence of long-term labor contracts and the staggered adjustment of wages. Wages are usually determined by contracts signed by trade unions and enterprises through consultation. During the validity of the contract, wages cannot be adjusted with market supply and demand. Even if there are no trade unions and enterprises that have not signed labor contracts, wages will not change easily due to the influence of sticky wages of enterprises with contracts. Implicit contract theory holds that with the passage of time, employees and employers will form some informal contracts for stable income, thus making wages sticky. The reason why implicit contracts lead to unemployment is that under the condition of asymmetric information, the limited information of manufacturers and workers determines the inefficiency and insufficient employment of balanced contracts, so workers are usually dismissed. The theory of efficiency wage shows that employers will actively pay high wages to employees, so as to improve their production enthusiasm, increase the opportunity cost of job-hopping and laziness, and attract capable high-tech talents. Insider-outsider theory points out that insiders have important bargaining power and strong employment advantages and status in wage determination because of the protection of labor conversion costs. Therefore, the wage adjustment mainly depends on the employed rather than the unemployed, so involuntary unemployment may occur. Therefore, to solve the unemployment problem, the government should intervene in wage contracts, reduce wage stickiness and increase wage flexibility, so that wages can be adjusted timely, moderately and flexibly.
(E) the employment theory of anti-classical economics
The "anti-classicism" school advocates abandoning the laissez-faire economic policy and learning from Japan's economic model and the administrative-led market economy model. On the issue of employment, it is emphasized that on the premise of ensuring the free employment of enterprises and job seekers' self-employment, and on the basis of maintaining the vitality of enterprises and giving full play to the role of market mechanism, the state carries out macro-control and policy guidance on market activities. At the same time, establish a labor model with stable employment, smooth labor flow and small labor contract and wage gap.