Cameron Miranda
Minimum wage laws establish a base level of pay that employers must pay their employees. The first minimum wage laws were created in the late 19th century to address the issue of sweatshops that paid workers non-living wages and had long work hours, unsafe and unsanitary working conditions. The first successful attempts at using minimum wage laws were in the Australian state of Victoria in 1896, and the third and fourth minimum wage laws were enacted in South Australia and New South Wales in 1900 and 1901, respectively. The first minimum wage law in the United States was passed in Massachusetts on June 4, 1912, which established a state commission for recommending non-compulsory minimum wages for women and children. The first federal minimum wage law in the United States was enacted in 1938, setting a rate of 25 cents per hour.
| Characteristics | Values |
|---|---|
| Purpose | To stabilize the post-depression economy and protect workers in the labor force |
| Applicability | Employers are required to pay certain covered employees |
| Federal minimum wage | $7.25 per hour |
| State minimum wage | States can set a higher minimum wage than the federal rate, but not lower |
| Local minimum wage | Municipalities, cities, or counties may have local minimum wage laws if compliant with federal and state laws |
| First federal minimum wage law | Enacted in 1938 at a uniform rate of 25 cents per hour |
| Amendments | Numerous amendments have been made to the minimum wage laws over the years, including in 1949, 1955, 1961, 1966, 1989, and 2009 |
| Early state laws | Early state minimum wage laws focused on improving wages for women and children |
| International influence | The movement for minimum wage laws in countries like Australia, New Zealand, and Great Britain influenced the creation of US minimum wage laws |
| First state law | Massachusetts passed the first minimum wage legislation in the US on June 4, 1912 |
| Current status | As of August 2022, 30 states and the District of Columbia had minimum wages higher than the federal minimum |
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What You'll Learn
The Fair Labor Standards Act (FLSA) of 1938
The FLSA was a comprehensive federal scheme that provided for minimum wages, overtime pay, record-keeping requirements, and child labor regulations. The purpose of the minimum wage was to stabilize the post-depression economy and protect workers, creating a minimum standard of living to safeguard employees' health and well-being. The Act included provisions for a right to a minimum wage, overtime pay for working more than 40 hours per week, and regulations related to child labor.
The history of the FLSA can be traced back to 1933 with the National Industrial Recovery Act and the President's Reemployment Agreement, which aimed to raise wages, increase employment, and restore business. This law was invalidated by the Supreme Court in 1935, but the discussion around wages and hours gained momentum again with President Roosevelt's reelection in 1936. The Roosevelt-Perkins remedial initiative resulted in the Public Contracts Act of 1936 (Walsh-Healey), which required government contractors to adopt an 8-hour day, a 40-hour workweek, and employ only those above a certain age.
In January 1938, the bill that became the FLSA was sent to Congress. After debates and votes, it was signed by President Roosevelt on June 25, 1938, and became effective on October 24, 1938. The FLSA has since been amended several times, including in 1940, 1947, 1949, 1955, 1961, 1966, 1989, and beyond, to address its application in different territories and industries, expand its scope, and adjust the minimum wage rates.
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Early state laws focused on women and children
The earliest minimum wage laws in the United States were state laws that focused on women and children. By 1923, fifteen US states and the District of Columbia had passed minimum wage laws, with pressure from the National Consumers League and other women's voluntary associations and organised labour. These early state laws were invalidated by the Supreme Court between 1923 and 1937.
The first minimum wage legislation in the United States was passed in Massachusetts on June 4, 1912. This legislation established a state commission to recommend non-compulsory minimum wages for women and children. The passage of this bill was significantly influenced by the Lawrence textile strike, which brought national attention to the plight of low-wage textile workers and pushed state legislatures to enact progressive labour legislation.
In New York, female reformers formed the Consumer's League of the City of New York in 1890 to address the harsh conditions of sweated labour in the country. They sought to improve working conditions by boycotting products made under sweated conditions and advocated for a code of "fair house" standards. Similar consumer leagues formed throughout the United States, uniting under the National Consumer League (NCL) in 1899.
In 1910, the Women's Trade Union League (WTLU) of Massachusetts, led by Elizabeth Evans, took up the cause of minimum wage legislation in the state. Over the next two years, a coalition of social reform groups and labour advocates in Boston pushed for minimum wage legislation, which was passed in 1912.
The Supreme Court of the Lochner era (1897-1937) consistently invalidated labour regulation laws. Advocates for state minimum wage laws hoped that they would be upheld under the precedent of Muller v. Oregon (1908), which upheld maximum working hours for women on the grounds that women required special protection. However, the Supreme Court did not extend this principle to minimum wage laws. In 1923, the Court ruled in Adkins v. Children's Hospital that the District of Columbia's minimum wage law was unconstitutional because it interfered with employers' ability to freely negotiate wage contracts with employees.
In 1937, Elsie Parrish sued her employer for paying her less than the minimum wage set by the state of Washington and won her landmark case, West Coast Hotel Company v. Parrish, et ux. This case overturned the previous 1923 ruling in Adkins v. Children's Hospital, which had found that minimum wages for women violated the Fifth Amendment.
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The first federal minimum wage law
The road to the first federal minimum wage law was long and arduous. The earliest minimum wage laws in the United States were state laws focused on improving the conditions of women and children in the workforce, who were often subjected to non-living wages, long work hours, and unsafe working conditions. The first successful attempts at using minimum wage laws to address this problem occurred in the Australian state of Victoria in 1896, and the movement for a legal minimum wage spread to New Zealand, Australia, and Great Britain. In 1908, the National Consumers League (NCL) in the United States adopted Australian minimum wage legislation as part of their national platform. This led to the first minimum wage legislation in the United States in Massachusetts on June 4, 1912, which established a state commission for recommending non-compulsory minimum wages for women and children. Similar legislation was soon passed in eight other states, with varying degrees of authority given to commissions to fix labor conditions, minimum wage rates, and maximum hours.
In the lead-up to the first federal minimum wage law, President Roosevelt played a significant role. In 1936, he postponed action on a fair labor standards law due to his fight to "pack" the Court. However, after his reelection in 1936, the Supreme Court took up the issue of labor legislation again in West Coast Hotel Co. v. Parrish (1937) and upheld the constitutionality of minimum wage legislation. Roosevelt also promulgated a President's Reemployment Agreement as an early step towards raising wages and creating employment, with employers signing agreements for a workweek between 35 and 40 hours and a minimum wage of $12 to $15 a week.
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The evolution of minimum wage laws
The concept of minimum wage laws emerged in the late 19th century, driven by the desire to eradicate sweatshops that had proliferated during industrialization. These sweatshops were notorious for paying workers, particularly women and young workers, abysmally low wages and subjecting them to grueling work hours and deplorable work conditions. The Progressive Era, spanning from the 1890s to the 1920s, witnessed the efforts of social activists, women's organizations, religious figures, academics, and politicians in advocating for state minimum wage laws across the United States.
The earliest minimum wage laws in the United States were state laws specifically targeting women and children's wages. Massachusetts took the lead by passing the first minimum wage legislation in the country on June 4, 1912, establishing a state commission to recommend non-compulsory minimum wages for these groups. This landmark legislation was influenced by the Lawrence textile strike of 1912, which brought national attention to the issue of labor rights.
Subsequently, similar minimum wage laws were enacted in eight other states, including California, Oregon, Washington, Wisconsin, and Utah. These laws empowered commissions to set minimum wages, maximum work hours, and improve labor conditions. The movement for legal minimum wages gained momentum internationally, with South Australia enacting legislation in 1900, followed by New South Wales, Australia, in 1901.
However, the early state minimum wage laws in the United States faced legal challenges, and between 1923 and 1937, the Supreme Court struck them down. It wasn't until 1938 that the first federal minimum wage law was enacted, setting a uniform rate of 25 cents per hour. This legislation, known as the Fair Labor Standards Act (FLSA), also introduced overtime pay requirements and addressed child labor issues. The FLSA established a comprehensive framework for regulating minimum wages, overtime pay, record-keeping, and child labor practices, with the overarching goal of stabilizing the post-depression economy and protecting workers.
Since its inception in 1938, the federal minimum wage has undergone numerous amendments and increases. By 1943, the federal minimum wage had risen to 40 cents per hour, and in 1955, it reached $1.00 per hour. Amendments in 1966 expanded coverage to various sectors, including public schools, nursing homes, laundries, and construction. The minimum wage continued to increase incrementally, reaching $3.80 per hour in 1990 and $4.25 in 1991. Today, the federal minimum wage stands at $7.25 per hour, and states have the authority to set higher minimum wages to meet local needs and economic conditions.
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Minimum wage laws today
Minimum wage laws establish a base level of pay that employers are required to pay certain employees. The current federal minimum wage in the US is $7.25 per hour. This rate was enacted in 2009 and has not been increased since. The president must sign any changes to the federal minimum wage into law.
In addition to the federal minimum wage, some states have their own minimum wage laws. These laws may be codified in a state statute or the state's constitution. States are divided into four classifications regarding minimum wage:
- States with minimum wages higher than the federal government's
- States with statutes that explicitly match the federal minimum wage
- States without any minimum wage statute (which results in that state's minimum wage automatically matching the federal minimum wage)
- States that explicitly set out a minimum wage that is lower than the federal government's. This lowered minimum wage applies only to specific jobs within the state, while the remaining majority of jobs match the federal minimum wage.
Municipalities, cities, or counties may also have local minimum wage laws, as long as they comply with federal and state laws. When an employee is subject to valid local, state, and federal minimum wage laws, the employee is entitled to the highest of the minimum wages.
The minimum wage is adjusted annually based on a set formula. For example, the Florida minimum wage is scheduled to increase by $1.00 every September 30 until it reaches $15.00 on September 30, 2026. The Michigan minimum wage is set to increase to $12.48 per hour on February 21, 2025.
The Fair Labor Standards Act (FLSA) of 1938 is a comprehensive federal scheme that provides for minimum wages, overtime pay, record-keeping requirements, and child labor regulations. The purpose of the minimum wage was to stabilize the post-depression economy and protect workers. The minimum wage was designed to create a minimum standard of living to protect the health and well-being of employees.
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Frequently asked questions
Minimum wage laws were first created in the Australian state of Victoria in 1896.
The first minimum wage legislation in the United States was passed in Massachusetts on June 4, 1912. This was followed by similar legislation in eight other states over two years.
The first federal minimum wage law in the United States was enacted in 1938, pursuant to the Fair Labor Standards Act.
