Then & Now — 75 Years of Wage and Hour Laws

ThenNowJames McDonough, Membership Development

Debate over the federal minimum wage has raged over MSEC’s entire 75-year history. Among the most controversial of all employment laws, it started when 13 states passed minimum wage laws between 1912 and 1920. Colorado’s law passed in 1917, protecting women and minors only. The national debate heated up during the Great Depression when President Franklin Roosevelt (FDR) considered federal minimum wages an important step toward increasing employment, boosting household incomes, and tackling worker exploitation. Many workers, including children, toiled 60 or more hours a week for wages that barely kept them fed. FDR believed that boosting worker pay would stimulate demand for goods and services, thus stimulating employment in the broader economy. Political foes saw this as an unwanted expansion of government power. Industrialists were opposed, citing the impact on corporate profits. Economists were split over the efficacy of a minimum wage. Surprisingly, even some labor unions were not supportive, fearing a threat to their interests.

The U.S. Supreme Court ruled throughout the 1930s against labor and wage laws, citing concerns over the rights to free negotiation between employee and employer. However, one ruling, Tipaldo, was so unpopular; the Court was widely criticized for “condemning 3 million children and women to economic slavery.” Emboldened by his 1936 landslide re-election, FDR threatened to pack the Court with six new justices sympathetic to his vision, sidelining the “nine old men.” Fearing this move, Justice Owen Roberts joined more liberal court members in a key vote to support state wage laws; setting the stage for FDR’s federal labor and wage reform agenda.

The Fair Labor Standards Act of 1938 (FLSA) introduced a federal minimum wage of $0.25 per hour, increasing to $0.30 per hour in 1939, when MSEC was established. The product of numerous compromises, federal minimum wage only applied to the 20 percent of the U.S. labor force employed in activities related to interstate commerce. Yet opponents railed against the law and vowed repeal, to which FDR responded “My God! 25 cents an hour! Why all the fuss?” The debate continues to this day with surprisingly similar controversy.

Key dates in MSEC’s 75-year history with the minimum wage:

1939: MSEC established to respond to New Deal legislation, including the NLRA and FLSA.

1940s: During World War II wage debate subsides due to full employment and high union participation.

1950s: Post-war boom years keep employment and wages high.

1961: Amendments cover many employees in large retail, transit, construction, and service industries.

1966: Amendments apply piecemeal to government workers and most private sector workers.

1967: Different minimum wage rates set for farm and non-farm jobs; persist until 1978.

1968: Real purchasing power of the minimum wage hits its peak ($10.55 in current dollars).

1978: Uniform minimum wage across most industries for nonexempt workers only.

1997: A subminimum wage set for younger workers. States granted right to set higher wage levels.

1997-2007: Longest period of time with no increase in the minimum wage.

2010: Colorado’s minimum wage decreases, the only such change in U.S. history.

2014 Snapshot: Complex patchwork of minimum wage laws across the country.
Washington has the highest statewide minimum level at $9.19 per hour.

Many major cities require higher minimum wage: San Francisco $10.55 per hour., Santa Fe $10.51 per hour.

Colorado and Arizona laws require annual adjustment using a cost-of- living formula.

Wyoming law defines a lower minimum wage  than federal mandate.

National debate over “livable wage” of $15per hour.