History of Minimum Wage

Written by daniel diprinzio
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History of Minimum Wage

In American history, minimum wage is relatively new. It was established after the Industrial Revolution and just before World War II to ensure that American workers were given a wage on which to live. To look at the history of the minimum wage in America, one has to go back to when America was recovering from the Great Depression.


In 1938, President Franklin Delano Roosevelt signed the Fair Labor Standards Act, a landmark law that, among other things, banned excessive child labour and established a minimum hourly wage for workers at 25 cents. With an average workweek of 44 hours, a minimum wage weekly salary came to £7, which equated to around £370 for the year. That was about one-third of the average annual salary for 1938.


The first minimum wage increase came a year later, when the hourly wage rose 10 cents, to 30 cents an hour. It stayed at 30 cents through World War II and was increased again in 1945 to 40 cents an hour. In 1950, it almost doubled, jumping to 75 cents an hour, and it reached the 60p mark in 1956. Other significant increases break down as follows, according to the U.S. Department of Labor: 1974: £1.30 an hour 1980: £2.0 an hour 1991: £2.70 an hour 1997: £3.3 an hour 2008: £4.2 an hour 2009 (July 24): £4.70 an hour


States are allowed to enact their own minimum wage higher than the federal minimum wage. Currently, Washington has the highest state-mandated minimum wage, at £5.50, followed by Oregon (£5.40), Vermont ($8.06), and Massachusetts, California, and Connecticut (all $8).


As far as the value of minimum wage based on inflation, the 1968 minimum wage, which was £1.0, translates to nearly £6.10 today.

Annual salary

Based on a 40-hour workweek, the average salary of a worker earning federal minimum wage of £4.70 in 2009 is £9,802, which is just above the national poverty line for a two-person family. The accompanying graph from Oregon State University shows that a minimum-wage salary has never been enough to lift a family of four out of poverty.

History of Minimum Wage
image courtesy of www.oregonstate.edu

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