History of Minimum Wage4 min read
If you haven’t read a newspaper or watched the news as of late, you may not be aware that there are ongoing debates to raise the federal minimum wage. Right now, there is a bill in the House that would gradually raise the federal minimum wage to $10.00 an hour by January 1, 2015. As the happy-go-lucky side of me wants to see everyone make as much money as possible, there is a side of me that understands the fundamentals of business and that potential risk involved in a minimum wage hike.
I imagine that you are familiar with the definition of minimum wage, but in case you are not: minimum wage is the lowest hourly, daily, or monthly remuneration that an employee may receive for working in a particular industry.
The History of Minimum Wage
The minimum wage was first enacted in New Zealand, in 1894. It was–and still to this day is–created for one sole purpose. This purpose was to guarantee unskilled laborers the ability to maintain a certain standard of living. It is for this reason that the United States of America saw a need for their own federal minimum wage. Unfortunately for Americans, it did however take another 30 years and the Great Depression before Franklin D. Roosevelt would pass the Fair Labor Standards Act, in 1938.
They say it went down like this: (Time Magazine, The Minimum Wage. Fitzpatrick, Lauren. 2009.)
With voters seeking a bulwark against the Great Depression, wage-hour legislation was an issue in the 1936 Presidential race. On the campaign trail, a young girl handed a note to one of Franklin Roosevelt’s aides asking for help: “I wish you could do something to help us girls,” it read. “Up to a few months ago we were getting our minimum pay of $11 a week…Today the 200 of us girls have been cut down to $4 and $5 and $6 a week.”
Roosevelt rode back into office in part on a promise to seek a constitutional way of protecting workers.
After being re-elected for president, he made it his number-one priority to find a way to constitutionally ensure a way to protect workers. This was an issue because in 1923, the Supreme Court voted against Adkins v. Children’s Hospital, ruling the previously passed minimum wage law as unconstitutional. In 1918, the District of Columbia passed a minimum wage law for women and children. The Children’s Hospital, in the District of Columbia, was enraged, as their employees were predominately female workers. The legal brain-trust of the Children’s Hospital claimed that by passing this law, the city was violating the “liberty of contract” as defined by Lochner v. New York. The case made its way to the Supreme Court and they agreed in a 5-3 vote that, indeed, the minimum wage law established in the District of Columbia was unconstitutional and impeded a worker’s right to price his/her own labor.
The original Fair Labor Standards Act of 1938 was drafted by Hugo Black and enforced the following: workers must be paid a minimum wage, overtime pay must be paid at 1 1/2 times regular pay, and implemented several child labor laws. At this time, the federal minimum wage would stand at $0.25 an hour. Throughout the years, Congress has convened and increased the minimum wage gradually. (Click here to see the chart of changes from 1938-2009.) The passing of the minimum wage law would help thousands, especially women, make a wage that would allow them to maintain a “minimum standard of living necessary for health, efficiency, and general well-being, without substantially curtailing employment.”
As the years passed by, there would be several laws that would be passed in conjunction with the statues of the Fair Labor Standards Act. In 1947, Congress would pass a Portal-to-Portal Act, which would define what time would be considered compensable work time, which would include items such as travel time. In 1961, the 1961 FLSA Amendments would be passed. These additional amendments would define coverage based on enterprise coverage. It would also set specified coverage for schools, hospitals, and nursing homes. Additionally, the entitlement to sue for back wages was granted in these amendments.
Even though the minimum wage laws were passed specifically with women and children as a priority, women were still mistreated in the work place. They were paid unfair wages, based purely on their sex. That was until the Equal Pay Act of 1963 was passed, making it illegal to pay workers lower wages strictly on the basis of their sex. As well as women being mistreated, so were the elderly. In 1967, an amendment was passed which made it illegal to discriminate based on age. This would extend to prohibiting employment and denying older employees health benefits and training opportunities. As the years continued, more and more amendments would be passed making pay no longer be an issue as a civil right.
As is stands today, minimum wage is $7.25. As this rate does allow one to live above the government’s definition of the poverty line ($11,170), it definitely doesn’t give you much to work with.
8 thoughts on “History of Minimum Wage”
Dear Mr. Hanker
Even though you profess to hold the opinion that you are apolitical vis-à-vis your phrase: “icky political stuff,” I nevertheless detect the faint odor of political commentary in this otherwise informative historical review. You could have said: It was 30 years after the minimum wage idea was first introduced before it was enacted as a law. Instead you wrote it thusly:
During those 30 “unfortunate” years, America experienced the most incredible and sustained economic growth of any society in the history of the world…in the history of infinity! This was the industrial revolution, and by the standards of any bygone era, the people of these United States were wealthier than any population had ever been before. (Including the women and the children)
FDR’s foolish Keynesian economic policies, like Obama’s today, misguidedly kept the economy from recovering. Luckily, WWII began and was the economic motivator that finally brought America back.
Minimum wage laws cause inflation and unemployment. Like rent-control and price-control and other statist government intrusions into the free-enterprise system, they are misguided, and ultimately serve to stifle economic growth and keep everyone all the poorer as a result.
From a civil rights standpoint, this time period was “unfortunate.” I am appalled that the North, having won the Civil War and the fight against slavery, would mirror such an ill-fated economic approach, but with breadcrumbs as payment for work. With wages consisting of pennies an hour, employees were slaves to their (often hazardous [read The Jungle, by Upton Sinclair]) jobs, just to try to survive. At least as a slave in the oppressive South, the workers were usually provided shelter and food; whereas in the North, there wasn’t enough money provided for your work to feed your family.
You would think that after the South was browbeaten for attempting to build its wealth on the back of other, innovators such as John Deere, Samuel Slater, and Henry Ford would see to it that barbaric work conditions and a living wage would be taken into consideration.
This was unfortunate, as is our current state of economic affairs. Until the House decides to do what they seem fit for America, all we can do is wait. Hopefully, under the right direction, a way can be found to resolve our country’s economic state and ensure that all Americans continue to maintain a “minimum standard of living necessary for health, efficiency, and general well-being, without substantially curtailing employment.”
Florida, as do other states, has its own minimum wage law. And our minimum wage law has regular *automatic* increases. Currently, the Florida minimum is $7.67. And this is a very Republican state. UNFORTUNATELY!
My first job as a freshman at Texas A&M University was as a busboy at IHOP. It paid minimum wage which, at the time, was $1.95 an hour.
Gosh, I find that hard to believe… A co-worker of mine said his first job paid $1.25. Oddly enough, part of the research I went through said that in the late 60’s, the dollar was worth so much then, that minimum wage then was almost $11.00 an hour at our current dollar value.
I didn’t think $1.95 an hour in 1973 was much, and to think that minimum wage here in California is now something like $7.50 or so. Seems like inflation has not kept up with minimum wages.
In California, eh? Sounds like you should head to San Francisco….$10.24, I believe. Haha, I don’t know if it is true, but I was told by a friend that San Francisco is the only city that Subway doesn’t sell $5 Foot Longs; it just cost too much to pay their employees…
When I moved to San Diego, my Texas friends kept telling me about how expensive it is to live here. Yet McDonald’s was selling Quarter Pounders with Cheese for $1.99 in San Diego, the identical price that it was back in College Station, Texas.
I do think it’s more expensive to live here, but I make ten times more money than I was making in Texas. Salaries are much higher than in my native state.
San Francisco is a much more progressive city than San Diego. They pretty much lead the way into the future and then, years and sometimes decades later, the rest of California follows, pretending to catch up, even though by that time San Francisco has moved on.
I lived and worked in the SF Bay Area in 1994-1995.