Western developed countries, unemployment, the theory of governance Practice and Enlightenment_8385

By Harold Long,2014-10-17 12:04
10 views 0
Western developed countries, unemployment, the theory of governance Practice and Enlightenment Summary: The Government's employment policy in developed countries has gone from a laissez-faire to the Government to actively intervene in the process of change. To explore the basic ideas of Western employment theory and principles, summed up t..

    Western developed countries, unemployment, the theory of governance Practice and Enlightenment

     Summary: The Government's employment policy in developed countries has gone from a laissez-faire to the Government to actively intervene in

    the process of change. To explore the basic ideas of Western employment theory and principles, summed up the success of employment practices in other countries experiences and lessons of failure for our country to resolve the current process of building a harmonious society in

    employment, there will be very important to inspire and learn.

     Keywords: Unemployment Theory and Practice Implications

     Western developed countries on governance theory and practice of the unemployment problem

     From the industrial revolution to the 20th century, 30 years of Western history, the employment problem has not been first industrialized governments into their own scope of work. Say prevailing at the time of 'supply to create demand', Marshall's 'market supply and demand theory' and other classical economics view that the labor market and commodity market there is no difference between the business cycle will automatically resume the supply of surplus, the Government of the labor

    market any interference is harmful. In fact, unemployment has become a long-term presence in these countries a kind of social instability. The global economy in 1929, began the Great Depression, leading to an unprecedented high unemployment rate, shaken people's confidence in

    classical economics, calls for the government to intervene more and more. In this situation, Keynesian economics came into being. In 1933, the U.S. government issued Roosevelt 'New Deal', from the curtain of a government intervention in markets, especially the prelude to the labor market. Of unemployment since World War II the West of governance policies, according to their theoretical basis for the difference can be divided into the following categories:

     (A) Keynes 'effective demand is insufficient' Theory and Practice of unemployment

     The 20th century, 30's, a severe economic crisis in the capitalist world led to mass unemployment. In this case, the Keynesian theory of classical unemployment, a major amendment that the 'lack of effective

    demand' theory of unemployment and to government intervention based on employment policy. Effective demand is the total supply is equal to the total demand of the social aggregate demand, which is expected to bring the greatest profit for the capitalists, the social aggregate demand. Keynes believed that effective demand is to determine the amount of total employment in the social key factor. Under normal circumstances,

insufficient effective demand, is the lack of sufficient demand to absorb

    the entire labor force. Thus, to achieve full employment, the Government must implement the intervention in the economy, and vigorously stimulate demand, namely, demand management. Demand management policies, including fiscal policy, monetary policy and foreign trade policy. Government

    should, through counter-cyclical expansionary macroeconomic policies to increase effective demand, mainly to increase consumption and investment so as to promote employment. After World War II to the late 20th century,

    70, Keynesian employment theory and policy advocates in Western countries, the major market economies in aggregate demand management practices are broad and full application. A typical representative of the United States, the Eisenhower era of the 20th century, 50 the Government to increase

    investment in public works, 60 years the Kennedy and Johnson administrations to implement the tax cuts, by stimulating demand, led to 60 years the U.S. economic prosperity, so that the U.S. unemployment rate stood at 4% of the range.

     (B) of the 20th century, 70 years been paying attention to the overall supply of social theory and practice of structural unemployment

     The 20th century, 70 years after the oil crisis, the major Western market economies there 'stagflation'. 'Stagflation' generation actually announced the failure of Keynesian economic theory, as well as the failure of demand management policies. Governance 'stagflation' in a variety of economic theories arising therefrom. The more influential are supply-side,

    monetarist and rational expectations school and so on. In contrast with the theory of insufficient effective demand, the supply-siders believe

    that the problem of employment is due to insufficient supply caused by high marginal tax rates stifle rooted in the work and investment,

    contributing to leisure, work, consumption saving alternative. The way out of stagflation is that lower marginal tax rates in order to reduce this substitution effect, the promotion of individuals and enterprises to

    increase savings and investment, stimulate people to increase the labor supply. The Reagan administration pursued the policy of supply-side ideas,

    to push tax cuts as the core content of 'Reaganomics'. In 1981 and twice in 1986 a significant reduction in personal income tax rate and corporate

    income tax rate; Britain in 1984 abolished the right fixtures and equipment investment tax expenditures, with the resulting increase in revenue to support the corporate tax rate from 50% fell to 35%. In addition, Canada, France, Japan, the Netherlands, India, Peru, Venezuela and other countries are also different degrees of reduced corporate income tax rate. Tax cuts loose objectively tied to the enterprise, reducing the burden, enhanced energy incentives and, in particular, to encourage and

    stimulate the rapid development of high-tech industries and promote

    employment growth.

     Neo-classical synthesis faction Samuelson, Tobin, and others faced with Philip Phillips curve on inflation and unemployment to explain the

    relationship between the counter-balance the turn of weakness, put forward a 'structural unemployment' problem and can be carried out for labor re-

    training, the development of an employment agency, providing labor market information and other policies to reduce structural unemployment.

    Monetarist economists, the unemployment problem will be reduced to 'natural rate' hypothesis, proposed by the supply management policies. Pointed out that the government could improve the labor market to reduce the natural rate of unemployment. Rational expectations school of

    deepening analysis of Friedman's natural rate of unemployment hypothesis, the introduction of rational expectations into economic theory. Rational expectations school of thought, the labor market has not fully

    competitive, wages and prices are fully floating. The sensitivity adjustment in the price mechanism, the labor market clearing at any time against the government's inappropriate intervention in the market mechanism into full play the role. The U.S. government in order to promote

    the improvement of the labor market in information services, the establishment of well-established service network, set up a special

    employment information services, and the reform of the old employment system, strengthen the management of government employment service


     (C) since the 20th century, 90 years 'supply and demand' with the employment policy

     Since the beginning of the 20th century, 90 years, the world economy is facing globalization, knowledge-based impact of the wave, the

    Western developed countries in the ongoing economic restructuring and economic development at the same time, the unemployment problem that hinders their economic development can not be ignored. High unemployment, unemployment large-scale, extensive coverage has obvious non-cyclical

    unemployment. In this case, the West's policy in management of the unemployment problem of supply and demand policy, the policy combination of ways. Because the unemployment situation in Western countries, are not

    purely a result of insufficient effective demand, is not purely caused by an irrational supply structure, but the combined effect of demand and supply. Supported by the Clinton administration's tax cuts, the Bush administration's tax cuts and higher spending are aimed at promoting economic growth and increase employment. EU countries pay great attention to the external labor market flexibility and the inherent flexibility mechanisms combine to give full play to the employment problem in the

    labor market regulatory role, so often in the labor market is not saturated, there is room to absorb employment.

     In short, since the emergence of the phenomenon of unemployment has led to Western economists on research into the causes of unemployment,

    all schools are also studying the problem of unemployment in the process of forming their own characteristics, has focused on the theory of unemployment and proposed targeted of policy recommendations. Specific measures include: how to improve the macroeconomic level of activity,

    increasing the level of a particular economic activity, thereby increasing the total demand for labor; from labor supply point of view make a fuss about how to make the labor supply in the aggregate, structure, quality to

    meet market demand for labor; how to fix the regulatory function of the labor market, improve the employment service policy, labor supply and demand adjust.

     My Government's policy options to promote employment

     Compared with the western developed countries, China's unemployment problem has its own particularity and complexity of both the existence of 'effective demand' caused by lack of unemployment, then there is the irrational structure of labor supply and demand caused by

    structural unemployment, as well as institutional reforms leading to unemployment and hidden unemployment. In reference to foreign employment

    on the basis of management policies, taking into account the actual employment in our country, our country also need to take 'supply and

    demand' combination of management policies, the promotion of social re-


     (A) through a sustained, rapid and healthy development of the national economy, increase job

     China and the mature Western market economies have greater

    difference. Since reform and opening, China has been rapid development of the national economy, but so far is still a developing country, China's macro-economic presence of high growth and high unemployment situation. Therefore, we can not simply that the issue of employment is subordinate to economic growth, and improving economic growth, unemployment will be automatically eliminate, in fact, 'subordinate to economic growth and employment,' This proposition is based on the capital - labor ratio

    unchanged at the premise of The. And if the capital - labor ratio rapidly

    increases, economic growth will not bring about the expansion of employment. To this end, need the government to play a role in macroeconomic regulation and control, in determining the economic growth

    rate and economic growth structure, so that the two factors in favor of the direction of the strategic objectives to achieve employment development, employment-driven economic growth, instead of investment-

    driven the mode of growth to reduce unemployment and increase employment opportunities as the country's economic and social development of the strategic starting point. To this end, we must correctly handle the development of the relationship between the economy and expand employment

    through economic development and promote employment, promote economic development by expanding employment and achieve economic development and expanding employment simultaneously.

     (B) by adjusting the economic structure, improve the employment


     First of all, adjust the industrial structure, promote the development of tertiary industry, to explore new areas of employment. In the fierce international market competition, capital-intensive

    manufacturing and ever-increasing trend can not be reversed. In the second industry, on the basis of efficiency, vigorously develop the tertiary industry is also labor-intensive to solve the employment problem is

    largely one way. So far, China's industrial structure is still at a relatively low level, the tertiary industry in GDP, the proportion is only 30% of employment in the tertiary industry absorbed the proportion of total employment is also only 30% of much lower than in developed countries. The development of tertiary industry, on the one hand to

    continue to support and encourage the catering industry, tourism, wholesale and retail development; the other hand, we have to develop the tertiary industry in the new areas, focusing on the development of consulting, information services, cultural services, education services, legal and accounting intermediary services and agriculture before, during, post-natal services.

     Secondly, developing the western region as the center, vigorously readjust the regional economic structure. In the western region lagging

    behind the current resulting from uneven regional economic development has constrained the sustained, rapid and healthy development of China's economy and social stability. Putting forward the western development strategy for the western region's economic development opportunities, but

    also expand employment and reduce unemployment, promote labor mobility and improving the quality of the best opportunities for labor. However, in this process, to maintain the sustainable development of the productive

    forces and establish a scientific outlook on development; to adjust the ownership structure of large-scale enterprise development in grasping the same time, actively promote and support the development of SMEs. Most small and medium enterprises are labor-intensive industries, for the

    requirements of labor skills and qualities, unlike large enterprises, as strict, but most small and medium enterprises with low organic composition of capital, which determines the absorption of a large number of its

    workforce, to reduce the employment pressure, with a obvious advantages, it provides employment opportunities for far more than large enterprises, is the labor and employment, employment growth in the main channel and source.

     (C) improve the labor market, the market mechanism into full play the role of

     In a market economy, and regardless of the economically active population or the unemployed population is the result of the market mechanism. Employment issues arising in the market economy must also be

    resolved in a market economy. Western countries attach great importance to the market in solving the employment problem in the role. And overseas experience and actively create a convenient and efficient job market in the country generally established employment agencies, job market, with modern methods and equipment to cultivate a variety of employment service system, to collect, analyze and disseminate labor market information, vocational referral and counseling, providing job training, efforts to

    improve the operational efficiency of the market, so that as many of the unemployed can quickly access to employment opportunities. Encourage enterprises to provide more jobs, and the specific measures include the reduction of various taxes, reducing the burden on enterprises; right to increase employment opportunities, hiring unemployed persons direct financial subsidies to enterprises; to provide preferential loans to relax restrictions on the minimum wage, allowing enterprises to slightly less

    than the level of statutory minimum wage employment personnel.

     (D) through the development of multi-level education and improve

    the overall quality of China's workers

     China's employment situation has a very significant feature,

    namely that the overall low quality of workers, while the total population, the employment rate. This is 'a low one high' is not only increased the employment pressure in China, but also restricts the improvement of quality of economic growth. To this end, we must continue

    to implement the 'scientific education' approach, along with economic development, and increase government investment in education; to continue to popularize nine-year compulsory education, especially compulsory

    education in rural areas to ensure the integrity of; deepening of the

    educational system and educational reform of the system, vigorously develop tertiary education and various types of vocational education; establish and improve the vocational training system and systems. In order

    to extend the years of education to ease the employment pressure added to the workforce, reduce the labor participation rate. In this way, not only to improve the quality of future workers, but also for the employment created the conditions for the final solution.

     (E) the establishment of a broad and reasonable labor and social

security system and promote sustainable employment of workers

     Speed up the social security system to alleviate the pressure of unemployment. Practical experience from countries looking to improve the

    social security system in the management of unemployment, fiscal policy, an integral part of the system, some scholars call it anti-unemployment

    'stabilizer' and 'safety net', is both a solution to the unemployment of

    basic an important means of livelihood security, but also for the rational flow of labor to provide an effective system of guarantees. In real life, the imperfections of the social security system to prevent the labor movement of the non-public sectors of the economy, but also restricted the

    city Zaijiuyeshuai improved. Therefore, a different ownership enterprises to phase out the differences between the benefits, covering urban and rural workers to establish a social security system, lower labor costs, so

    that the unemployed and the rational flow of labor without worry.


     1. Liang Xiaomin. Macroeconomics Column [M]. Sanlian Bookstore Press, 2002

     2. Dongsheng Jin. International taxation and tax reform of [M].

    China Financial Economic Publishing House, 1995

Report this document

For any questions or suggestions please email