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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
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    More about this item

    Keywords

    Distributive justice; Fairness judgment; Minimum wage; Factorial survey;
    All these 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

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