The federal minimum wage, introduced in 1938 during the Great Depression under President Franklin Delano Roosevelt, was initially set at $0.25 per hour. The federal minimum wage has been increased by Congress 22 times, most recently in 2009 from $6.55 to $7.25 an hour. Most states plus DC have a minimum wage higher than the federal minimum wage, though several states do not have minimum wage laws (which means workers in those states default to the federal minimum wage).
Early History of the Minimum Wage
In 1890 the annual wages of the average American were $380, well below the poverty line of $500 per year. Progressivism, a political movement, emerged at this time with the aim of improving American working conditions and wages. Following the example of Australia and New Zealand, which enacted the world’s first minimum wage laws in the 1890s, the Progressives introduced the idea of a US minimum wage, arguing that it should be high enough to support an average employee’s needs.
While men generally earned higher wages, enjoyed freedom of contract, and could join and rely on the protection of unions, women and minors were not afforded such luxuries. Barred from joining unions and prevented from the free negotiation of contracts, they suffered from low wages which drove some to prostitution in order to cover their costs of living. It was thought that by introducing a minimum wage for women and minors at a level high enough to ensure an adequate standard of living, they would be given a level of protection not needed by the male workforce.
As a direct result of pressure from the progressive movement, the first state minimum wage laws were introduced, beginning in 1912 with Massachusetts. Eleven more states enacted minimum wage laws covering women and minors – but not men – between 1913 and 1917
The Oregon minimum wage legislation of 1913 stated, “the State of Oregon requires that women and minors should be protected from conditions of labor which have a pernicious effect on their health and morals, and inadequate wages and unduly long hours and unsanitary conditions of labor have such a pernicious effect.” This law instituted a weekly state minimum wage of $8.25 for experienced women, $6 for inexperienced women and girls aged 16-18, and higher rates for employees in Portland.
In 1937 Oklahoma became the first state to enact minimum wage legislation covering men. These provisions were deemed void by the state’s 1939 Supreme Court ruling in Associated Industries of Oklahoma v. Industrial Welfare Commission; however this was due to the language used in the law, not the concept of a minimum wage for men.
In 1939 the Women’s Party of Connecticut argued that while the minimum wage law covering women and minors was designed to protect them, it was actually harmful as the conditions placed on their employment made them less employable than men. Their challenge resulted in a 1939 amendment to the Connecticut law which extended minimum wage provisions to men and set a precedent for other states to follow.
The National Industrial Recovery Act (NIRA), passed by Congress and signed by President Roosevelt in 1933, was the first piece of legislation that attempted to establish a federal minimum wage. However, the NIRA was declared an “unconstitutional delegation of legislative power” by the Supreme Court in 1935 in A.L.A. Schechter Poultry Corp. et al v. United States.
Elements of the NIRA, such as minimum wage and maximum hour provisions, were carried over into future legislative acts. The Public Contracts Act (PCA) of 1936 covered workers employed in the manufacture of goods under government contracts worth in excess of $10,000. The PCA stipulated a minimum wage based on locally prevailing rates, an eight hour work day, 40-hour work week, and a ban on the employment of minors.
The Fair Labor Standards Act (FLSA) of 1938 set a national minimum wage of $0.25 an hour, a 44-hour work week, and the prohibition of “oppressive” child labor. At the time of its entry into force, the FLSA covered employees engaged in interstate commerce and those working in industries that produced goods for interstate commerce.
Early Supreme Court Decisions on the Minimum Wage
The 1917 case of Stettler v. O’Hara was the first case brought before the United States Supreme Court that challenged the constitutionality of minimum wage laws. An evenly divided court (4-4) upheld the state of Oregon’s minimum wage law. Following the success of this case, three more states and DC passed minimum wage laws between 1918 and 1923.
In 1923 the US Supreme Court in Adkins v. Children’s Hospital determined (5-3) that DC’s law was unconstitutional and “an arbitrary interference with the liberty of contract which no government can legally justify in a free land.” By Dec. 1932, minimum wage laws in six states had been repealed or deemed unconstitutional.
In Mar. 1937 the constitutionality of state minimum wage laws was again debated in the US Supreme Court in West Coast Hotel v. Parrish. The Supreme Court overturned (5-4) its prior anti-minimum wage ruling in Adkins by declaring that “the legislature has necessarily a wide field of discretion in order that there may be suitable protection of health and safety, and that peace and good order may be promoted through regulations designed to insure wholesome conditions of work and freedom from oppression.” By mid-1941, 26 states, DC, and Alaska (still a territory at this time), all had minimum wage laws.
The Supreme Court upheld the constitutionality of federal minimum wage provisions within the Public Contracts Act (PCA) in the 1940 case of Perkins v. Lukens Steel Co. The PCA is still in force today with the minimum wage provisions tied to the federal minimum wage as set by the Fair Labor Standards Act (FLSA).
The constitutionality of the FLSA was upheld by the Supreme Court in the 1941 case United States v. Darby, in which the court ruled unanimously that the “wage and hour provisions of the Act do not violate the due process clause of the Fifth Amendment” and that the “statute is not objectionable because [it is] applied alike to both men and women.”
State Minimum Wage Levels and Restrictions
In Jan. 2018, 45 states plus DC had their own minimum wage laws in place. 29 of these states plus DC had minimum wages higher than that of the federal minimum wage of $7.25 an hour – the highest being DC at $12.50 an hour. When a state minimum wage is set at a higher rate than the federal minimum wage, the highest rate prevails. 14 states set their minimum wage in line with the federal minimum wage; and two states – Georgia and Wyoming – set their rates lower at $5.15 an hour. However, Georgia and Wyoming must pay the federal minimum wage to those employed in positions covered by the FLSA.
Only workers employed in positions not covered by the FLSA, such as outside salespersons and certain domestic service workers providing companionship services, may be paid $5.15 an hour. Five states – Alabama, Louisiana, Mississippi, South Carolina, and Tennessee – do not have minimum wage legislation on their statute books and as such are required to pay workers covered by the FLSA a minimum of $7.25 an hour.
In addition to state minimum wages, as of Jan. 2018, there were at least 30 cities and counties that have adopted legislation enforcing a higher minimum wage than their respective state levels. As of Jan. 2018, the highest of these was $15 an hour in Mountain View, CA, Sunnyvale, CA, and Seattle, WA. When a city or county minimum wage is set higher than its respective state and the federal minimum wage, the highest rate prevails.
Many states have laws prohibiting cities and counties from setting their own minimum wage levels.
Proposals to Raise the Federal Minimum Wage
Since the Fair Minimum Wage Act of 2007 raised the federal minimum wage to $7.25 an hour starting in 2009, there have been numerous unsuccessful attempts by Congress to raise the wage further. The two main efforts are the Harkin-Miller proposal to raise the wage to $10.10 and the Living Wage Movement to raise the wage to $15.
US Senator Tom Harkin (D-IA) and US Representative George Miller (D-CA) introduced legislation in 2012, 2013, and 2014 to raise the minimum wage, but none of those efforts passed. When their proposal to raise the minimum wage to $10.10 was re-introduced for a third time in 2014 under the Minimum Wage Fairness Act, it was supported by President Obama. However their bill failed by four votes to overcome a Republican-led filibuster in the Senate on Apr. 30, 2014.
On Jan. 14, 2021, President Joe Biden included a $15 minimum wage in the America Rescue Plan, a $1.9 trillion COVID-19 (coronavirus) rescue package. The Senate Parliamentarian ruled that the measure could not be included. As a result, Biden signed an executive order on Apr. 27, 2021 that increased the minimum wage for federal contractors to $15 an hour effective in 2022. The raise was expected to impact hundreds of thousands of workers.
Who Earns the Federal Minimum Wage?
According to the U.S. Bureau of Labor Statistics, 181,000 workers earned the federal minimum wage of $7.25 an hour and 910,000 workers earned below the federal minimum wage in 2021. The collective 1.1 million workers who earned at or below the federal minimum wage represented 1.4% of all hourly workers (76.1 million workers 16 and older).
Those earning the minimum wage and lower are mostly
- young: 44% are under 25 years old
- female: of hourly workers, 2% of women and 1% of men earned at at below minimum wage
- of any race: about 1% of white, Black, Asian, and Hispanic workers earned the minimum wage or lower
- never married: 2% of minimum wage or less workers have never been married versus 1% who have been or are married
- have an associate’s degree or less: 2% of workers without a high school diploma, high
school graduates (no college), and those with some college or an associate degree earn minimum wage or less versus 1% of workers with a bachelor’s degree or higher
- part-time employees: 3% of part-time workers earned minimum wage or less versus 1% of full-time employees
- service industry workers: 5% of service workers (such as food preparation or serving) earned minimum wage or less, the highest percentage of any occupation.
- living in the South
Public support for raising the minimum wage has been over 70% as far back as 1994.
A 2013 Gallup poll found that 50% of small business owners were opposed to raising the minimum wage to $9.50 an hour and 60% believed such an increase would hurt most small business owners. A 2015 poll by the Wall Street Journal and Vistage International found that 49% of small business owners favored raising the minimum wage while 49% were opposed.
A May 2015 poll conducted by CBS and the New York Times found that 86% of Democrats, 50% of Republicans, and 76% of independents were in favor of raising the minimum wage to $10.10 per hour, and 67% of men and 75% of women were in favor.
A 2017 poll by the University of Maryland and Voice of the People found that 73.8% of Americans support raising the minimum wage to $9 an hour, while 56.8% support raising it to $10.10 an hour. A 2017 Quinnipiac University poll found that 54% of Americans would support raising the federal minimum wage to $15 an hour with 44% opposing.
A July 30, 2019 poll found 67% of Americans supported raising the minimum wage to $15 an hour. An April 22, 2021 poll reported similar support at 62%. By Dec. 2, 2022, support for raising the federal minimum wage was up to 70%, with American adults reporting that the federal rate was “not sustainable to live on for any period of time.”