This paper analyses the changes in supply and demand of China's labor market under the background of the world economic recession. Then, this paper improves the George Alogoskoufis model. Through the model, this paper analyses the impact on employment due to the decreasing in economic growth, the drop in commodity prices and the declining in the volume of import and export caused by the economic crisis. Finally, this paper puts forward countermeasures and suggestions to alleviate the employment problem in China.