Why Is There a Minimum Wage?

the minimum wage is a topic of ongoing debate and has been since it was conceived and implemented in countries around the world starting in the 19th century designed as a protection for employees to make sure in theory that they make wages commensurate with the cost of living the minimum wage draws pretty passionate opinions from all corners including those who want to see it raised those who want to stay the same and some who wanted a polished all together but when did this start and why to start off today's episode we should first ask ourselves what is the minimum wage to answer this question we're gonna turn to our friends over at 2 cents I'm Julia Lorenz often and I'm Philip Olson the minimum wage is the rate of pay set by the local or federal government and it's designed to prevent people from being paid less than a certain rate today the minimum wage is extended to large swaths of employees across the u.s. although certain industries are excluded such as workers who make tips teenage trainees some agricultural workers and home care aides so now we have to ask what existed before the minimum wage well just before minimum wage law started springing up around the world in the late 19th century we see the rise of industrial factories with cramped living quarters low pay and harsh working conditions and these conditions existed because employers had little to no obligations to ensure the safety and security of their numerous employees want to force a seven-year-old to work in a factory all day no problem want to cut an employee's salary in half to increase your own profits go right ahead in their book minimum wage economist David Newmark and William a washer note that the minimum wage which sprung up first in New Zealand and Australia in the 1890s was initially geared towards protecting the labor of women and children aligning what they made per hour with what was needed to survive and in 1890 there was a pretty wide gap between the average Americans take-home pay of approximately three hundred and eighty dollars a year and the poverty line which was set around $500 a year employers decided what they felt was a fair wage for the labour performed by their employees and had a take-it-or-leave-it attitude that left many vulnerable workers out in the cold but it wouldn't be until 1938 that there was a nationwide minimum wage okay so robber barons and big moguls weren't giving employees a fair shake in the half of the 19th century and into the early 20th century but the federal government still hadn't passed a successful minimum wage law nationwide and employees weren't taking things lying down so that leads us to our next question how did labor movements impact the spread of the minimum wage to the federal level so after the first minimum wages sprung up down under the Fair Labor trend spread to other regions and countries such as the UK in 1909 and the u.s. passing the Fair Labor Standards Act in 1938 but these didn't just pop up because the government and business owners suddenly had a change of heart but rather because of ongoing agitation from workers and good old-fashioned strikes sometimes through union organizing and sometimes through collective action then employees took without union protections because strike isn't just something you yell at the opposing team during a baseball game and some particularly important strikes that help to shift labor laws in the u.s. were the pullman workers strike of 1894 where railroad workers in the Midwest rejected the Pullman company's decision to decrease their pay by 25% while keeping the cost of living including rent and fees in the company operated town of Pullman the same the resulting fallout led President Cleveland and the Congress established labor day and it was a group of pullman workers in the 1920s who would go on to form the Brotherhood of sleeping car porters then there was my favorite labor uprising that inspired a Broadway musical after Evita the Newsboys strike of 1899 but before I get busy saying a five-six-seven-eight I'll just add that these scrappy little imps inspired a huge blow back when they protested the rice and price per paper of the evening world and evening journal news boys were responsible for buying their own papers which they then sold to make a profit but they weren't refunded for unsold papers if they didn't manage to hock their wares and the price hike was cutting into their already paper-thin margins since at the time the average newsboy only made a meager 26 cents a day and then there was the mill workers strike of Lawrence Massachusetts which shook the nation and came to me known colloquially as the Bread and Roses strike let in large part by women and some men who were working at mills in the bustling immigrant hub they led a strike in 1912 to stop working when their pay was summarily cut the national sentiment was on the side of the workers once images of mothers being dragged by their hair as they tried to send their young children of the rising turmoil alongside testimony from the children started to circulate and as a result President Taft sent the Attorney General to investigate the working conditions and the striking workers received a 15 percent pay raise among other demands new Morgan washer noted that employers were seen as having an outsized amount of control over their workers so the minimum wage was supposed to guarantee that employees can arbitrarily be given substandard wages especially in the lowest paid industries when the minimum wage first reached the u.s. it was at the state level starting in 1912 with Massachusetts and between 1913 and 1917 eleven more states passed laws that were centered around a minimum wage for women and children but at that point men were still not covered the reason was that women and children weren't able to join unions so there was more attention to their need for government protections okay so strikers were striking even before they had those big blow up rats to put in front of businesses and the images of women and children on strike in particular proved effective in winning over public sentiment especially since they were barred from the protections of unions and trade groups that were afforded to men and that leads us to our final question when did the minimum wage go into effect nationwide well after all the brouhaha the 19th century and early 20th century there was an interest in codifying the salaries of workers and before there was a fight for 15 there was the fight for 25 cents that's right when the Fair Labor Standards Act was finally passed in the u.s. in 1938 it set the minimum wage for eligible employees at 25 cents an hour but the FLSA also included laws about the working conditions and ages of children fair pay for overtime set the 40-hour workweek Oh a weekend and added bookkeeping regulations for businesses and when it was first passed the law covered about 20 percent of the labor force but now it's applicable to over 80 percent of workers but the road for springing this act into action wasn't entirely smooth and Hammer vs. Daggett Hart in 1918 the Supreme Court overturned child labor laws and Adkins vs. Children's Hospital in 1923 have the Supreme Court rule against the District of Columbia's minimum wage requirements for women and FDR's National Industrial Recovery Act of 1933 which attempted to lower competition caps on the workweek at 40 hours limit the employment of young children and encourage reemployment was also thrown out as unconstitutional in 1935 so by the time the FLSA rolled around there were a couple of things boiling under the surface a history of workers strikes and uprisings other nations who had successfully passed minimum wage laws and a history of labor laws in the u.s. being deemed unconstitutional in favor of the interests of big businesses but although there was uproar and pushback from industry executives and members of Congress who opposed the bill President Roosevelt warned his listeners during one of his broadcast fireside chats do not let any calamity howling executive with an income of $1,000 a day tell you that a wage of $11 a week is going to have a disastrous effect on all American industry the bill was shepherded through Congress by representative Mary Norton of New Jersey who was the chairwoman of the House Labor Committee On June 25th 1938 FDR signed the FLSA sometimes known as a wage as an hour's bill along with a hundred and twenty other bills all on the same day this was a way of kind of flooding the market with new laws to review and to prevent the bill from being overturned as unconstitutional by the Supreme Court and it worked and over time the protections of the minimum wage were viewed as beneficial to all workers and began to be extended to men and to the majority of employees but there's one piece of personal information you need to know so two cents taken away since its first implementation the US federal minimum wage has been raised 22 times but most recently in 2009 when it was raised to $7.25 but many states also set their own minimum wages and it's a good thing for workers since even if the wage rate in your state doesn't match the federal minimum wage employers are bound by law to pay you whichever one is the higher number so how does it all add up well the minimum wage was first implemented in large part to protect specific employees and vulnerable industries from receiving low pay but now it's extended to cover most employees nationwide and the implementation of the minimum wage wasn't the end of labor organizing across the u.s. there was the Memphis sanitation worker strikes of 1968 the New York City garbage workers strike of that same year and the 1965 farm worker strikes when the Farm Workers Association led by Cesar Chavez forces with a straight of Filipino workers in delay knows grapefield so it seems that these legislative changes which we now take as the norm came about through consistent people power and battles over wages and equity are still raging on in discussions of gender discrimination and raising the minimum wage from 725 to a rate that gets closer to the cost of living nationwide with some states and cities already getting the ball rolling but the issue remains