Economic policy significantly affects labor relations by determining wage standards, job creation, and employment law. Policies favoring free markets might enhance employer flexibility but can also lead to job insecurity for employees. Conversely, pro-labor policies may establish stronger protections for workers, assisting in negotiations over pay and benefits. The interplay between economic policy and labor relations shapes conditions in the workplace and can either stimulate or stagnate economic growth and job opportunities, affecting overall societal well-being.