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A Brief History of Minimum Wage in America

In January of 2021, Democrats put forth the Raise the Wage Act to increase the federal minimum wage from $7.25 to $15.00 an hour. In March, it failed in the Senate. The bid is modern, but the debate is not; for more than a century, proponents of a minimum wage have argued that it has the capacity to lift hundreds of thousands of people out of poverty, with the opposition countering that such plans will increase unemployment and harm small businesses. 

The beginnings of minimum wage in the United States were found 120 years ago in the mills of Lawrence, Massachusetts. Business was prosperous, and its factories produced nearly a quarter of the United States’ woolen cloth. However, these statistics meant little to those working within; pay was low, conditions were miserable, and Lawrence’s death rates were amongst the highest in the country. After a 1912 wage cut, workers walked out, calling “short pay, all out.” This action, often called the “Bread and Roses” strike, resulted in the deaths of three strikers, whose sacrifice forever changed the nature of work and pay. Massachusetts enacted the nation’s first minimum wage law, and other states soon followed.   

This victory did not last long; in 1923, in a case called Adkins v. Children’s Hospital of D.C., the U.S. Supreme Court ruled that imposing a minimum wage violates employers’ and workers’ liberty of contract right under the Fifth Amendment. This decision invalidated the states’ minimum wage laws and limited them to offering advice to employers who could then set their own standards. It would be another ten years before minimum wage advocates found a champion within the federal government. 

Elected in 1932, President Franklin Delano Roosevelt entered office in the midst of the Great Depression. Poverty, unemployment, and hopelessness ran rampant. In an attempt to address the needs of suffering workers, Roosevelt signed the National Industrial Recovery Act (NIRA), which suspended antitrust restrictions and allowed industries to enforce their own fair-trade codes, raising wages. Additionally, President Roosevelt pushed employers to sign the “President’s Reemployment Agreement,” a pledge to offer a $12.00 to $15.00 weekly wage for 35 to 40 hours of labor. To incentivize businesses, those who agreed were given a badge of honor to display, which depicted a blue eagle with the motto, “We Do Our Part.” 

Yet not all were in favor of Roosevelt’s plans. The Supreme Court struck down all minimum wage provisions in 1935 and continued to stymie progress until the 1937 case, West Coast Hotel Co. v. Parrish, in which the court sided with a former chambermaid suing the hotel company over the withholding of back wages. In doing so, the Supreme Court upheld Washington state’s minimum wage laws, reversing the judicial trend and establishing the constitutionality of minimum wage. Shortly after, Congress passed the Fair Labor and Standards Act (FLSA), which outlawed child labor, set a 44-hour workweek, and, in 1938, enacted the first federal minimum wage at 25 cents an hour. 

In 1949, Congress raised the minimum wage to $0.75 per hour, and a precedent was set. Since then, the minimum wage has been raised more than 20 times, under both Democratic and Republican administrations. Furthermore, the scope of FLSA has been broadened extensively, beginning in the 1950s with the inclusion of air transport workers, and today encompassing all kinds of jobs, from food service to jobs in government to retail work. With President Kennedy signing the Equal Pay Act, the FLSA was also amended to specify that workers covered by the federal minimum wage requirement were also entitled to equal pay for the same job, regardless of gender. 

However, we are still far from total wage equality; youth workers, disabled workers, and tipped workers are all subject to wages lower than the federal minimum. Workers younger than 20 years old have a minimum wage of $4.25 for their first 90 days of work. Disabled workers deemed unable to handle a complete workload do not qualify, and employers of workers who receive gratuities, such as waiters and bartenders, can legally incorporate tips into wages. 

With the most recent federal wage hike occurring in 2009, our nation is currently at its longest stretch without a raise in the minimum wage, and we remain $7.75 away from $15 an hour. 

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