I don’t see what’s so difficult here.

If it’s risky to hire (because terminating is difficult, takes a long time, is riddled with red tape), then employers will be slow to do so. Less competition for employers to find workers, lower pay overall. High compensation is even risky because of the burden of having to keep employees on due to labor law compliance.

I personally believe it is better to have a robust unemployment insurance system in place that helps workers bridge the gap between jobs.