IDEAS home Printed from https://ideas.repec.org/a/spr/jlabrs/v59y2025i1d10.1186_s12651-025-00392-3.html
   My bibliography  Save this article

Does organizational context matter? An examination of the factors influencing employees’ judgments of minimum wage increases

Author

Listed:
  • Matthias Dütsch

    (Federal Institute for Occupational Safety and Health (BAuA)
    Otto-Friedrich University of Bamberg)

  • Monika Senghaas

    (Institute for Employment Research (IAB))

  • Gesine Stephan

    (Institute for Employment Research (IAB)
    Friedrich-Alexander-Universität Erlangen-Nürnberg)

  • Olaf Struck

    (Otto-Friedrich University of Bamberg)

Abstract

This article presents novel findings on company factors that determine judgments regarding the fairness of minimum wage increases. Drawing on minimum wage and organizational justice research, we conducted a factorial survey among German employees. It seems that the internal wage structure plays a crucial role because raising only the pay of minimum wage workers and not that of other employees causes a minimum wage increase to be rated as less fair. While a hiring freeze does not negatively influence fairness judgments, layoffs do. Finally, if a minimum wage increase adversely affects a company’s economic situation, respondents assess it as less fair.

Suggested Citation

  • Matthias Dütsch & Monika Senghaas & Gesine Stephan & Olaf Struck, 2025. "Does organizational context matter? An examination of the factors influencing employees’ judgments of minimum wage increases," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 59(1), pages 1-15, December.
    • Handle: RePEc:spr:jlabrs:v:59:y:2025:i:1:d:10.1186_s12651-025-00392-3
    DOI: 10.1186/s12651-025-00392-3
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1186/s12651-025-00392-3
    File Function: Abstract
    Download Restriction: no
    File URL: https://libkey.io/10.1186/s12651-025-00392-3?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Konow, James, 2001. "Fair and square: the four sides of distributive justice," Journal of Economic Behavior & Organization, Elsevier, vol. 46(2), pages 137-164, October.
    2. Brian Bell & Stephen Machin, 2018. "Minimum Wages and Firm Value," Journal of Labor Economics, University of Chicago Press, vol. 36(1), pages 159-195.
    3. Chrysa Leventi & Holly Sutherland & Iva Valentinova Tasseva, 2016. "Improving poverty reduction in Europe: what works (best) where?," ImPRovE Working Papers 16/16, Herman Deleeck Centre for Social Policy, University of Antwerp.
    4. Card, David & Krueger, Alan B, 1994. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," American Economic Review, American Economic Association, vol. 84(4), pages 772-793, September.
    5. Guillermina Jasso, 2006. "Factorial Survey Methods for Studying Beliefs and Judgments," Sociological Methods & Research, , vol. 34(3), pages 334-423, February.
    6. Peter Dolton & Chiara Rosazza Bondibene & Jonathan Wadsworth, 2012. "Employment, Inequality and the UK National Minimum Wage over the Medium‐Term," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 74(1), pages 78-106, February.
    7. Caliendo Marco & Wittbrodt Linda & Schröder Carsten, 2019. "The Causal Effects of the Minimum Wage Introduction in Germany – An Overview," German Economic Review, De Gruyter, vol. 20(3), pages 257-292, August.
    8. Barry T. Hirsch & Bruce E. Kaufman & Tetyana Zelenska, 2015. "Minimum Wage Channels of Adjustment," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 54(2), pages 199-239, April.
    9. Arindrajit Dube, 2019. "Minimum Wages and the Distribution of Family Incomes," American Economic Journal: Applied Economics, American Economic Association, vol. 11(4), pages 268-304, October.
    10. Fedorets, Alexandra & Schröder, Carsten, 2019. "Economic Aspects of Subjective Attitudes towards the German Minimum-Wage Reform," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 75(4), pages 357-379.
    11. Bruttel, Oliver, 2019. "The effects of the new statutory minimum wage in Germany: a first assessment of the evidence," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 53(1), pages 1-10.
    12. Mirko Draca & Stephen Machin & John Van Reenen, 2011. "Minimum Wages and Firm Profitability," American Economic Journal: Applied Economics, American Economic Association, vol. 3(1), pages 129-151, January.
    13. Brockner, Joel & Higgins, E. Tory & Low, Murray B., 2004. "Regulatory focus theory and the entrepreneurial process," Journal of Business Venturing, Elsevier, vol. 19(2), pages 203-220, March.
    14. Stephan, Gesine & Osiander, Christopher & Senghaas, Monika & Struck, Olaf, 2021. ""Acceptance of social and labor market programs and regulations": Methodological report on the second survey," IAB-Forschungsbericht 202104, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    15. John Schmitt, 2015. "Explaining the Small Employment Effects of the Minimum Wage in the United States," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 54(4), pages 547-581, October.
    16. Richard Williams, 2006. "Generalized ordered logit/partial proportional odds models for ordinal dependent variables," Stata Journal, StataCorp LLC, vol. 6(1), pages 58-82, March.
    17. Bruce E. Kaufman, 2010. "Institutional Economics and the Minimum Wage: Broadening the Theoretical and Policy Debate," ILR Review, Cornell University, ILR School, vol. 63(3), pages 427-453, April.
    18. Doruk Cengiz & Arindrajit Dube & Attila Lindner & Ben Zipperer, 2019. "The Effect of Minimum Wages on Low-Wage Jobs," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(3), pages 1405-1454.
    19. Bruckmeier, Kerstin & Schwarz, Stefan, 2022. "Auswirkungen des gesetzlichen Mindestlohns auf den Bezug von Sozialleistungen," IAB-Forschungsbericht 202214, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    20. Rutstrom, E. Elisabet & Williams, Melonie B., 2000. "Entitlements and fairness:: an experimental study of distributive preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 43(1), pages 75-89, September.
    21. James Konow, 2003. "Which Is the Fairest One of All? A Positive Analysis of Justice Theories," Journal of Economic Literature, American Economic Association, vol. 41(4), pages 1188-1239, December.
    22. repec:iab:iabjlr:v:53:i:1:p:art.10 is not listed on IDEAS
    23. Christian Dustmann & Attila Lindner & Uta Schönberg & Matthias Umkehrer & Philipp vom Berge, 2022. "Reallocation Effects of the Minimum Wage," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 137(1), pages 267-328.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Arindrajit Dube & Attila Lindner, 2024. "Minimum Wages in the 21st Century," RF Berlin - CReAM Discussion Paper Series 2425, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    2. Link, Sebastian, 2024. "The price and employment response of firms to the introduction of minimum wages," Journal of Public Economics, Elsevier, vol. 239(C).
    3. Bossler, Mario & Gürtzgen, Nicole & Lochner, Benjamin & Betzl, Ute & Feist, Lisa & Wegmann, Jakob, 2018. "Auswirkungen des gesetzlichen Mindestlohns auf Betriebe und Unternehmen," IAB-Forschungsbericht 201804, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    4. Pestel, Nico & Bonin, Holger & Isphording, Ingo E. & Gregory, Terry & Caliendo, Marco, 2020. "Auswirkungen des gesetzlichen Mindestlohns auf Beschäftigung und Arbeitslosigkeit," IZA Research Reports 95, Institute of Labor Economics (IZA).
    5. Caliendo, Marco & Olthaus, Rebecca & Pestel, Nico, 2025. "Long-term employment effects of the minimum wage in Germany: New data and estimators," Labour Economics, Elsevier, vol. 92(C).
    6. Kunaschk, Max, 2024. "The effects of minimum wages on employment and prices—Evidence from the hairdressing sector," Labour Economics, Elsevier, vol. 88(C).
    7. Isphording, Ingo E. & Caliendo, Marco & Mahlstedt, Robert & Pestel, Nico & Zimpelmann, Christian, 2022. "Auswirkungen des gesetzlichen Mindestlohns auf individuelle Beschäftigungsbewegungen und betriebliche Lohnstrukturen in den Jahren 2015 bis 2020," IZA Research Reports 133, Institute of Labor Economics (IZA).
    8. Florin Vadean & Stephen Allan, 2021. "The Effects of Minimum Wage Policy on the Long‐Term Care Sector in England," British Journal of Industrial Relations, London School of Economics, vol. 59(2), pages 307-334, June.
    9. Loukas Karabarbounis & Jeremy Lise & Anusha Nath, 2022. "Minimum Wages and Labor Markets in the Twin Cities," Working Papers 793, Federal Reserve Bank of Minneapolis.
    10. Medrano-Adán, Luis & Salas-Fumás, Vicente, 2023. "Do minimum wages deliver what they promise? Effects of minimum wage on employment, output, and income inequality from occupational choice theory," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 366-383.
    11. Koch, Andreas & Kirchmann, Andrea & Reiner, Marcel & Scheu, Tobias & Zühlke, Anne & Bonin, Holger, 2020. "Verhaltensmuster von Betrieben und Beschäftigten im Kontext des gesetzlichen Mindestlohns," IZA Research Reports 97, Institute of Labor Economics (IZA).
    12. Peter Harasztosi & Attila Lindner, 2019. "Who Pays for the Minimum Wage?," American Economic Review, American Economic Association, vol. 109(8), pages 2693-2727, August.
    13. Young Cheol Jung & Adian McFarlane & Anupam Das, 2021. "The effect of minimum wages on consumption in Canada," The Economic and Labour Relations Review, , vol. 32(1), pages 65-89, March.
    14. Alessandra Brito & Miguel Foguel & Celia Kerstenetzky, 2017. "The contribution of minimum wage valorization policy to the decline in household income inequality in Brazil: A decomposition approach," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 40(4), pages 540-575, October.
    15. David Neumark & Peter Shirley, 2022. "Myth or measurement: What does the new minimum wage research say about minimum wages and job loss in the United States?," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 61(4), pages 384-417, October.
    16. Bachmann, Ronald & Boockmann, Bernhard & Gonschor, Myrielle & Kalweit, René & Klauser, Roman & Laub, Natalie & Rulff, Christian & Vonnahme, Christina, 2022. "Auswirkungen des gesetzlichen Mindestlohns auf Löhne und Arbeitszeiten," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 264288, October.
    17. Jeffrey Clemens & Lisa B. Kahn & Jonathan Meer, 2021. "Dropouts Need Not Apply? The Minimum Wage and Skill Upgrading," Journal of Labor Economics, University of Chicago Press, vol. 39(S1), pages 107-149.
    18. John Schmitt, 2015. "Explaining the Small Employment Effects of the Minimum Wage in the United States," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 54(4), pages 547-581, October.
    19. Bachmann, Ronald & Bonin, Holger & Boockmann, Bernhard & Demir, Gökay & Felder, Rahel & Isphording, Ingo & Kalweit, René & Laub, Natalie & Vonnahme, Christina & Zimpelmann, Christian, 2020. "Auswirkungen des gesetzlichen Mindestlohns auf Löhne und Arbeitszeiten: Studie im Auftrag der Mindestlohnkommission," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 222998, October.
    20. Qianqian Yang & Nobuaki Hamaguchi, 2025. "Should the Industrial Region Fear Hollowing Out by Raising the Minimum Wage?," Discussion Paper Series DP2025-09, Research Institute for Economics & Business Administration, Kobe University.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:jlabrs:v:59:y:2025:i:1:d:10.1186_s12651-025-00392-3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.