The history of minimum wage reflects government efforts to protect workers from an unfair workplace. It is defined as the lowest wage a business can pay a worker by law. Minimum wage sets an artificial bottom for hourly compensation, ensuring a minimum standard of living that corresponds to a certain region. Throughout its history, minimum wage laws have drawn both cheers and criticism.
Arbitration Boards
The first efforts to regulate minimum wage came in the late 1800s from New Zealand and Australia, with the organization of several boards dedicated to resolve wage issues between workers and businesses as an alternative to strikes. These boards were limited to regulating certain industries that were traditionally low paying. The Australian government brought more companies under the jurisdiction of the wages boards until nearly 200 industries were included.
US Wage Legislation
In the midst of the Great Depression, hourly wage was a hot topic as both employees and employers struggled. Those on the presidential campaign trail saw a minimum wage standard as one way to climb out of the economic quagmire the country was in. When Franklin D. Roosevelt was elected, he worked to enact one of his campaign promises of federal minimum wage legislation. In 1938, workers were finally guaranteed 25 cents per hour for a 44-hour workweek, thanks to the Fair Labor Standards Act.
Keeping Pace
Since 1938, Congress has enacted minimum wage increases in order to keep pace with increased cost of living expenses. The minimum wage jumped past $1 in 1956 and the $2 barrier in 1974. It wasn't until 1980 that minimum wage passed the $3 mark, and by 1991, workers earning minimum wage were entitled to $4.25 per hour. The largest jumps occurred in 2007, 2008 and 2009, with $5.85, $6.55 and $7.25, respectively.
State Minimum Wage
Several states make preemptive minimum wage laws and place a bottom limit on wages that exceeds the federal government's limit. Among the highest states for minimum wage are Washington, Vermont and Oregon. For example, as of 2009, the federal minimum wage was $7.25, but, in Oregon, the minimum wage was $8.40. If a state doesn't have minimum wage statue enacted, the federal minimum wage applies.
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