What is the history of the minimum wage?
Background from official sources
A minimum wage is the lowest wage that employers may legally pay to workers. The first minimum wage law was enacted in 1894 in New Zealand.
With the passage of The Fair Labor Standards Act of 1938 (FLSA), the U.S. minimum wage was initially set at $0.25 per hour for covered workers. Since then, it has been raised 22 separate times–most recently, in July 2009, to $7.25 an hour.
FSLA provided a number of federal protections for the first time including
- payment of the minimum wage
- overtime pay for time worked over a set number of hours in a work week
- restrictions on the employment of children
- recordkeeping requirements
In 1938, the act applied to industries whose combined employment represented about 20 percent of the labor force. Coverage has been expanded over time, and the wage now covers approximately 130 million workers or 84 percent of the labor force.
State Minimum Wage Laws
A number of states have their own state minimum wage laws.
- Five Southern states (Louisiana, Mississippi, Alabama, Tennessee and South Carolina) have no minimum wage laws.
- Four states (Wyoming, Minnesota, Arkansas and Georgia) have state minimum wage rates that are lower than the federal rate, so the federal minimum wage applies.
- Twenty states have laws that set the minimum wage at the federal rate.
- Twenty-one states and the District of Columbia set their rates higher than the federal rate. Currently the state of Washington has the highest minimum wage rate at $9.32 per hour.
The U.S. Department of Labor Wage and Hours Division provides data on federal and state minimum wage rates, both current and historical: History of Federal Minimum Wage Rates Under the Fair Labor Standards Act, 1938 – 2009 and Changes in Basic Minimum Wages in Non-Farm Employment under State Law: Selected Years 1968 TO 2013.
The U.S. Bureau of Labor Statistics produces information on the characteristics of minimum wage workers. The annual report Characteristics of Minimum Wage Workers provides national-level statistics starting in 2002 on hourly-paid workers with earnings at or below the prevailing Federal minimum wage. Some data by state are also reported.
The report series derives its information on minimum wage earners from the Current Population Survey (CPS), a key survey conducted jointly by the Bureau of Labor Statistics and the Census Bureau. The CPS is also the source of our official figures on employment and unemployment in the United States.
Recent Government Reports
With the renewed interest in raising the federal minimum wage, the Congressional Research Service (a legislative branch agency within the Library of Congress well-known for analysis that is authoritative, objective and nonpartisan) has recently produced several papers that provide a variety of background information:
- The Federal Minimum Wage: In Brief provides an overview of the law, as well as the arguments for and against raising the minimum wage.
- The Fair Labor Standards Act (FLSA): An Overview provides a more in-depth description of the provisions of the FLSA.
- Inflation and the Real Minimum Wage: A Fact Sheet provides data on the purchasing power (real or constant dollar value) of the minimum wage since its enactment.
- Federal Minimum Wage, Tax-Transfer Earnings Supplements, and Poverty examines the alternatives of raising the federal minimum wage and expanding the Earned Income Tax Credit to address poverty
The Congressional Budget Office (CBO) is another legislative branch agency that provides nonpartisan analysis for Congress. CBO has released an analysis of The Effects of a Minimum-Wage Increase on Employment and Family Income.
U.S. Dept. of Labor. The Fair Labor Standards Act of 1938, As Amended. Accessed 7/10/2014
U. S. Dept. of Labor. What does the Fair Labor Standards Act Require?Accessed 7/10/2014
Grossman, Jonathan. Fair Labor Standards Act of 1938: Maximum Struggle for a Minimum Wage. U.S. Dept. Of Labor. Accessed 7/10/2014