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History of The Minimum Wage
History of The Minimum Wage

The term “New Deal” came from a speech [LOC backgrounder] delivered by democratic Presidential candidate Franklin Roosevelt in 1932. At the time it was a rather unclear term that ultimately meant that the government should assume a stronger role in the function of economic regulation. After his inauguration as president in 1933, Roosevelt proposed and the then Congress enacted the “New Deal” in an effort to deliver relief to the unemployed and those in danger of losing their farms, homes, and businesses.

Beginning in the early 20th century, the Supreme Court created major blockades [DOL backgrounder] towards wage-hour and minimum wage laws. In Adkins v. Children’s Hospital, the Court voided the District of Columbia law that set minimum wages for women and held that federal minimum wage legislation for women was an unconstitutional infringement of liberty of contract, as protected by the due process clause of the Fifth Amendment. In 1933, under the “New Deal” program, President Roosevelt’s advisers helped develop a National Industrial Recovery Act (NIRA). The act suspended antitrust laws so that industries could enforce fair-trade codes leading to less competition and higher wages.

The minimum wage was originally introduced by Congress [DOL backgrounder] in 1938 as part of the Fair Labor Standards Act (FLSA). The FLSA [JURIST backgrounder], among other things, established the minimum wage [UC Davis backgrounder], overtime pay, record-keeping, and youth employment standards affecting those employees in the private sector and in Federal, State, and local governments. The FLSA initially set the minimum wage at $0.25 USD per hour for covered workers. Since then it has been raised 22 different times, with the most recent increase effective as of July 24, 2009. This increase covered nonexempt workers and entitled them to a minimum wage of not less than $7.25 USD per hour. The minimum wage previous to that was $5.15 USD per hour. After 40 hours of work per week, overtime pay at a rate not less than one and one-half times the regular rate of pay is required. In 1938, the FLSA applied to industries whose employment collectively represented about 20 percent of the labor force but since then the wage now covers roughly 130 million workers or 84 percent of the labor force.

Currently, Washington state has the highest minimum wage [Washington state website], which in January 2015 was raised from $9.32 USD per hour to $9.47 USD per hour. The average minimum wage in the United States currently stands at $7.57 per hour. In addition, New York announced [Reuters] this past July that it intends to raise the minimum wage for fast-food workers to $15/hour by the end of 2018 and for workers in the rest of the state by 2021. This decision came as a result of a unanimous vote from the New York Wage Board.