In the last several months several news
reports related to raising our federal minimum wage have come to the forefront
of our attention. Fight for $15 (Chicago), Fast Food Forward (New York), or We
Can’t Survive on $7.35 (St. Louis) are all groups organized to help low-wage
workers bring this to the public’s attention. So where did our minimum wage
originate? (Gupta, 2013)
The concept of a minimum wage has
been debated from the early 1900s, with over 14 states enacting legislation by
1923. Most legislation at the time was applied to women and children in hopes
to avoid legal battles. Various states also set up central minimum wage
commissions that covered a broad range of industries, unlike countries like
Australia, who set up industry specific commissions. Unfortunately, most of
these laws, which were continually being challenged by industry, were declared
unconstitutional by the U.S. Supreme Court because they “violated employers’
constitutional rights to enter freely into contracts and deprived them of their
private property (i.e., their profits) without due process of law.” (Neumann
& Wascher 2008, p. 14)
Interest in a federally mandated
minimum wage came to the forefront with the economic environment brought about
by the Great Depression. In 1933, President Franklin D. Roosevelt was able to
successfully get his first attempt at a minimum wage through as the National
Industrial Recovery Act (NIRA as part of his “New Deal” program. NIRA pushed
employers to accept a 35 to 40 hour workweek and a minimum weekly wage of
$12.00 to $15.00 per week.
NIRA would be short-lived as the
U.S. Supreme Court, in Schechter Corp. v. United States, would vote the Act “an
unconstitutional delegation of government power to private interests;” all nine
justices voting together. (Grossman, 1978, para. 4)
The wage-hour legislation would be
a continuing campaign issue for President Roosevelt in 1936, but it would not
be until June of 1938 that he would be able to sign a compromise bill featuring
a 25-cent minimum hourly wage with an automatic increase to 30 cents one year
after signing. Additional provisions were in place for increases up to 40 cents
per hour by 1945 and steps for overtime hours and rates. Also included were
provisions for a sole administrator under the newly created Wage and Hour
Division in the Department of Labor. (Grossman 1978)
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"No business which depends for existence
on paying less than living wages to its workers has any right to continue in
this country.” (President Franklin D. Roosevelt, 1933, Statement
on National Industrial Recovery Act)
Also
important to the minimum wage debate is the development of the poverty
threshold. There was no official definition of poverty before 1963, the year
Mollie Orshansky, a former family and food economist for the U.S. Department of
Agriculture (USDA) and social science research analyst for the Social Security
Administration. Her in-house research project “Poverty as it Affects Children”
used information from the USDA’s 1955 Household Food Consumption Survey, for
which she was also a major contributor.
In
1964, President Lyndon Johnson declared his War on Poverty using a rough
measure provided by his Council of economic Advisors. As an indirect result of
this, Mollie is tasked with extending her original analysis from families with
children to the broader population. This bulletin was published by the Social
Security Administration in January 1965 as “Counting the Poor: Another Look at
the Poverty Profile.”
Shortly
after, the Office of Economic Opportunity (OEO), the agency tasked with the
lead in the War on Poverty, adopted Mollie’s extended threshold in May, 1965,
as its working definition, but it wouldn’t be until August, 1969, that her
threshold is made the Federal Government’s official statistical definition of
poverty. (Fisher, 2008)
Understanding how our minimum wage
came about and what our poverty line is based on is essential to developing an
opinion about the current minimum wage issue. Considering the track record for
the original minimum wage act and the most recent minimum wage increase, will
the current minimum wage raise proposal be enough?
References
Fisher, G. (2008,
January 1). Remembering Mollie Orshansky—The Developer of the Poverty
Thresholds. Retrieved December 7, 2014, from http://www.socialsecurity.gov/policy/docs/ssb/v68n3/v68n3p79.html
Gupta, A. (2013,
November 11). Fight For 15 Confidential. Retrieved December 17, 2014, from http://inthesetimes.com/article/15826/fight_for_15_confidential
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