This paper views labor markets as human ecosystems, particularly in terms of their embeddedness into social, economic, political and environmental systems, and their adaptiveness to their social and natural environments. In this context, the insider-outsider theory may be generalized by reconceptualizing insiders and outsiders in terms of their relative adaptive advantages and the structural barriers to adaptation. The ecosystemic approach also involves a reconceptualization of agents operating in labor markets, implying a new theories of the firm and workers. The first- and second-best policy implications are briefly surveyed.