With the economic and social transformation, the benefits appeals of labor market participants are increasingly diversified, and various conflicts are increasingly prominent and frequent. It should be observed that there is a new trend in labor-capital relations, but it is not a worsening of the situation, but a result of people raising their expectations of income. In response to this trend, the government has the responsibility to speed up the construction of labor market institutions. According to international experience, the developed countries alleviated conflicts in labor-capital relations, not by changing the opposition between labor and capital, but by strengthening the construction of labor market institutions and forming effective mechanisms for coordinating labor-capital relations (including the accelerated introduction of labor laws, the establishment of a minimum wage system, the enhancement of the role of labor unions, and the formation of a tripartite consultation mechanism) when they developed to a stage where the labor supply–demand relations had undergone fundamental changes. However, the countries and regions that escaped the middle-income trap established relatively complete labor market institutions and developed an institutional framework for resolving disputes and confrontations in labor-capital relations under pain or even compulsion when faced with increased labor-capital frictions. Currently, China’s efforts should shift from direct intervention in the economy to providing better public services and improving social security mechanisms. The current stage of development has provided an opportunity to form a relatively complete social security mechanism. In other words, the government and society should take the lead in developing an efficient labor market, reducing the employment risks faced by people, improving the residents’ ability to secure their income and living standards, and further reducing the incidence of poverty and vulnerability.