Wage Policy or Pledge: Firm Adjustment Across Statutory and Corporate Wage-Setting Regimes

• In Event: How Minimum Wages Work: Activism, Organizational Responses, and Worker Outcomes

Abstract

Wage floors in the United States are established through two institutionally distinct mechanisms: state-mandated minimum wages enforced through legal requirements, and voluntary minimum wage programs adopted by large corporations through managerial discretion. A substantial literature has examined the employment effects of minimum wage increases, converging on the finding that moderate increases produce little to no job loss. But whether firms adjust along other dimensions, including work hours, scheduling practices, benefits provision, or technology adoption, and whether such adjustments differ depending on the institutional source of the wage increase, remains largely unexamined.

This paper provides the first systematic comparison of organizational adjustment mechanisms across regulatory and managerial wage-setting regimes. We ask how firms respond when wages rise, and whether the institutional context shaping that increase produces different patterns of adjustment.We draw on granular survey data from the Shift Project, covering retail and food service workers nationwide from 2016 to 2024, which provides detailed measures of wages, hours, scheduling practices, benefits, and workplace technology deployment. We conduct two parallel analyses using stacked difference-in-differences methods: the first exploits variation in the timing of minimum wage increases across states to estimate firm responses to statutory wage mandates; the second exploits variation in the timing of voluntary wage pledge announcements across major retail and food service corporations to estimate responses to managerial wage-setting. By applying consistent samples, outcome measures, and methods across both analyses, we are able to directly compare organizational adjustment across the two regimes, covering 25 state minimum wage hikes and 12 major corporate minimum wage pledges. Both regimes produce significant wage increases for affected workers. Across both, we find no significant reductions in work hours, scheduling stability, or benefits provision. Technology adoption reveals a more nuanced pattern: state mandates produce no effects on workplace technology, while corporate programs are associated with significant increases in speed-monitoring technologies but no changes in customer-facing automation.

These findings suggest that firms largely absorb moderate wage increases without reducing visible dimensions of job quality. However, the increase in speed-monitoring under corporate programs points to work intensification as a less visible adjustment channel. The two institutional pathways thus produce meaningfully different patterns of adjustment, with implications for how policymakers and workers evaluate voluntary corporate wage commitments relative to statutory wage floors.

Author

• Henri John Jackson, Harvard University
  Presenting Author