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

Matthias Dütsch (), Monika Senghaas, Gesine Stephan and Olaf Struck
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Matthias Dütsch: Federal Institute for Occupational Safety and Health (BAuA)
Monika Senghaas: Institute for Employment Research (IAB)
Gesine Stephan: Institute for Employment Research (IAB)
Olaf Struck: Otto-Friedrich University of Bamberg

Journal for Labour Market Research, 2025, vol. 59, issue 1, 1-15

Abstract: 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.

Keywords: Distributive justice; Fairness judgment; Minimum wage; Factorial survey (search for similar items in EconPapers)
JEL-codes: D63 J31 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1186/s12651-025-00392-3

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