The Enlightenment of Western Unemployment Theory on the Hard Employment of College Graduates

The major unemployment theories in the West include the voluntary unemployment theory of the classical school, the involuntary unemployment theory of the Keynesian school, and the unemployment theory of the neoclassical synthesis school. At present, our college students are hard to find jobs, mainly due to the ineffective bridge between the labor market and the education system, as well as social welfare and urban-rural differences. Currently, the difficult employment for university students in the short-term is aligned with China's economic development phase. According to Western unemployment theories, some inspirations for helping university graduates' employment are obtained: setting majors and courses reasonably, increasing rural investment, attaching importance to the role of the government in labor and employment and the significance of human capital investment. We hope that with the supporting materials in this paper, students can apply suitable professional courses according to reasonable time arrangements during their college life, and make different types of career planning in different grades. We will respond actively to the Party Central Committee's call to alleviate poverty targeted by making the rural investment the key task, while intensifying the government's macro-control to link the employment of students with local employment. We will set up an employment consulting office, in order to increase steadily the employment rate by assorting positions and majors properly, and planning scientifically employment positions. Keywords—western unemployment theory; university students’ employment; structural unemployment; human capital I. OVERVIEW OF WESTERN UNEMPLOYMENT THEORY Western economists have paid attention to unemployment for a long time, and have also conducted long-term research and exploration on the theory of unemployment. The following theoretical viewpoints have been formed: A. Complete market regulation The theory of voluntary unemployment of the classical school is mainly Keynes’ previous theory of unemployment, based on the premise of the private ownership of the means of production and the assumption of complete free competition. From the perspective of classical economists, in the perfect competition, if wage can fluctuate in line with changes in labor supply and demand, all available labor resources can be used for production and full employment can be achieved through the spontaneous adjustment of the market price mechanism. They also pursued a policy of laissez-faire in the labor market and proposed countermeasures to solve the unemployment problem. They focused on eliminating the rigidity of currency and argued that if the money supply and price levels are not changed, they can reduce real wages by lowering money wages, thus increasing employment [1]. B. State intervention In 1936, Keynes published a book "The General Theory of Employment, Interest, and Money", proposing a different employment theory from that of traditional western economics. In his opinion, depending solely on the spontaneous force of the market, we cannot achieve a balance between supply and demand, and form the "effective demand" sufficient to eliminate "involuntary unemployment" and achieve full employment. Keynes believes that the root cause of the "involuntary unemployment" is the shortage of effective demand and the other three basic rules also demonstrate the possibility of long-term “involuntary unemployment”, namely “decreasing consumption trends” resulting in inadequate consumption; “decreasing marginal efficiency of capital” bringing insufficient investment demand; “money flow preference” causing insufficient investment demand. He also believes that "involuntary unemployment" can be reduced by stimulating consumption, expanding effective demand, and encouraging investment [2]. Therefore, to achieve full employment, we must abandon the policy of laissez-faire and rely on state intervention. The state uses fiscal and monetary policies to increase government spending, build public projects, print money, expand credit, reduce interest rates, etc., to stimulate investment and increase consumption propensity of the whole society, expand social effective demand, and thus enlarging employment. C. Coexistence of unemployment and vacancy At the end of the 1950s, the economies of major Western capitalist countries successively fell into the predicament of “stagflation”. Keynes’s theory of unemployment had failed, and some economists interpreted unemployment from a structural perspective. Tobin is one of them. From the perspective of the incompleteness of the labor market, he believes that labor markets are mostly the industrial, regional local market. Without a unified one, many "barriers" has led to a certain degree of unemployment since the differences in 284 2018 2nd International Conference on Education, Economics and Management Research (ICEEMR 2018) Copyright © 2018, the Authors. Published by Atlantis Press. This is an open access article under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/). Advances in Social Science, Education and Humanities Research (ASSEHR), volume 182