This entails enabling labour markets to reach a continuous equilibrium determined by the intersection of the demand and supply curves.
[1][2] Labour unions can limit labor market flexibility by negotiating higher wages, benefits, and better working conditions with employers.
This is done so that pay and other employment costs reflect the supply and demand of labour and so that employers can force employees to compete for wages, thus lowering the average wage paid to employees and ultimately to maximize profits while decreasing the standard of living of the working classes.
Labour market flexibility refers to more than the strategies used by employers to adapt to their production or business cycles as it is in the definitions above.
Increasingly, the common view is that labour market flexibility can potentially be used for both workers and companies, or employees and employers.
The European Commission also addresses this issue in its Joint Employment Report and its new Flexicurity approach, calling for an adequate method to enhance flexibility for both workers and employers that is "capable of quickly and effectively mastering new productive needs and skills and about facilitating the combination of work and private responsibilities.