With the Senate debating an increase in the federal minimum wage as we speak, it’s interesting to look at the history of the minimum wage in the U.S. The minimum wage movement actually started in the early 20th century as a way to protect mill workers and others – usually women and children – from predatory labor practices.
In the early 1900s, it was not unusual for women and children as young as 5 years of age to work 14 hours or more in factories for just pennies a day. In 1912, Massachusetts organized a commission to recommend a non-compulsory minimum wage for women and children. Within eight years, at least thirteen U.S. states and the District of Columbia passed minimum wage laws. The U.S. Supreme Court consistently invalidated the minimum wage laws. According to the court, such laws were unconstitutional because they interfered with the ability of employers to freely negotiate appropriate wage contracts with their employees.
The first attempt at establishing a national minimum wage came in 1933, when a $0.25 per hour minimum wage was set as part of the National Industrial Recovery Act. However, in the 1935 court case Schechter Poultry Corp. v. United States (295 U.S. 495), the United States Supreme Court declared the act unconstitutional, and the minimum wage was abolished.
Still, proponents of a federal minimum wage didn’t give up. The minimum wage was re-established in the United States in 1938 as part of the Fair Labor Standards Act (FLSA). The FLSA still stands today, and many of our current employment rules and regulations are based on it. It served as a sort of “employee’s bill of rights.” Among other measures, the FLSA required that those working over 40 hours per week be paid time-and-one-half. This measure alone made the standard 40-hour workweek commonplace. The FLSA re-established the minimum wage at $0.25 per hour, about $3.22 in 2005 dollars.
The federal minimum wage had the highest purchasing power ever in 1968, when it was increased to $1.60 per hour – an amount equivalent to $9.12 in 2005 dollars. As I’m sure you’ve heard by now, the 110th Congress, currently in session, is debating a bill to increase the minimum wage to $7.25 by 2009.
The federal minimum wage has not been increased in 9 years and 5 months, the longest “drought” in its history.
