As prices sky rocket our wages are jammed. How do we go about fixing this? Is government too involved or not involved enough? Here is the history and arguments for what others believe should be done.
History of the Minimum Wage
A demand for the structure of wages slowly started with the Great depression, in 1931. Many people were out of everything they once had and working as hard as they could to make ends meet. Children were sent to work in factories for mere pennies. Women were not paid as much as men. And everyone was working long hours for very little pay.
In 1933 some started to take a small stand. Under President Roosevelt the National Industrial Recovery Act (NRA) was developed. This act “suspended antitrust laws so that industries could enforce fair-trade codes resulting in less competition and higher wages” (Grossan 22). This was a way to raise prices and jobs. Prices had plummeted due to the depression and monopolies increased jobs and prices. Under the NRA employers would sign and agree to a work week between 35 and 40 hours and a minimum wage of $12 to $15 a week and to not employ youths under 16 years of age. Anyone who agreed to this displayed a “badge of honor”, a blue eagle over the motto “We do our part”. This was to encourage Americans to buy from these companies who were working towards giving people a better life.
Any kind of minimum wage law was considered “unconstitutional because it interfered with the employer’s right to due process and the employee’s right of contract” (Ed Quillen Denver). President Roosevelt stated that, “all our able-bodied working men and women a fair day’s pay for a fair day’s work” (Grossan 25). This was the fight that tore through the country until 1938, business’s right to set wages and employee’s right to be paid fairly. This fight started in the 1930’s and many of the same questions and concerns are coming up today.
With a proposed minimum wage to be set at .40 an hour businesses started to voice their dislike and concern of going out of business. “Some Southern employers told the Department of Labor that they could not live with a 25 cent an hour minimum wage. They would have to fire all their people” (Grossan 27). If businesses could not operate paying out the minimum wage then having a minimum wage would destroy jobs and cause more harm than good. The FLSA was altered again and “set a minimum wage for men and women of 25 cents an hour for the first year it was in effect, with a rise in the wage floor to 30 cents an hour the second year, and a goal of a “universal minimum” of 40 cents an hour in the seventh year” (Grossan 28). This created a slower growth to reach Roosevelt’s 40 cents an hour goal, giving businesses the opportunity to adjust to the new standards. As a backup, the FLSA added a provision stating that “wages would not rise if evidence showed that higher rates would destroy jobs” (Grossan 28). As anyone can see from the history of our country that the job market did not crash and America has been growing ever since.
Government Regulations 