History of the United States' Minimum Wage

The minimum wage is a cornerstone of the United States' labor system, and has been a cutting-edge labor law topic among employers and workers alike for decades. However, the United States hasn't always had a minimum wage. Before the minimum wage was introduced during the Great Depression of the 1930s, there was no national minimum wage, or indeed any legislation to protect workers from exploitation. Because of this lack of regulation tens of thousands of workers were routinely exploited in sweatshops and factories, forced to work in horrible conditions and for pennies a week.

Early attempts by labor unions to create a mandatory minimum wage were ruled unconstitutional by the U.S. Supreme Court on the grounds that they "restricted the worker's right to set the price for his own labor".

This allowed employers to continue exploiting their workers through the Great Depression of the 1930s, when incredible demand for jobs caused wages to drop even further to an all-time low. With poverty becoming a huge national issue, President Franklin D. Roosevelt promised to constitutionally protect American workers as a key part of his 1936 re-election campaign.

In 1936, Roosevelt introduces the Fair Labor Standards Act

After winning the historical 1936 election by a landslide, President Roosevelt signed the Fair Labor Standards Act (FLSA) into law in early 1938. The FLSA introduced sweeping regulations to protect American workers from being exploited, and created a mandatory federal minimum wage of 25 cents an hour in order to maintain a "minimum standard of living necessary for health, efficiency and general well-being, without substantially curtailing employment".

This new law was welcomed as a godsend by the thousands of workers who were previously forced to work for a fraction of that amount, but was violently opposed by many employers and fiscal conservatives who argued that a minimum wage could hurt employers. In addition to establishing a mandatory nation-wide minimum wage the Fair Labor Standards Act introduced many other worker's protection laws still in effect today, including banning child labor and establishing workplace safety statutes.

In the years since the FLSA was introduced, the federal minimum wage was revised by Congress every few years to account for inflation and the ever rising cost of living (although, in the years after the FLSA was introduced, Congress has actually reduced the Minimum Wage several times). In 1997, President Bill Clinton introduced legislation allowing individual states to set their own minimum wage rates, and as a result many states have minimum wages that are higher then the federal minimum wage (see list of state minimum wage rates).

When will the minimum wage be raised next?

Today, there is contnuing debate over whether the Federal Minimum Wage (currently $7.25/hr) is truly a fair "living wage". Labor activists call on Congress to raise minimum wage, while others point out the negative effects this could have on the economy (read more about the pros and cons of raising the minimum wage).

The minimum wage and labor law in general has come a long way throughout its 80+ year history, but both can certainly continue to be improved on by the actions of American workers and lawmakers. Want to help change labor law? Contact your senator and let them know what you think at www.senate.gov.