History of the minimum wage

From Wikipedia, the free encyclopedia
Jump to: navigation, search

The history of minimum wage is about the attempts and measures governments have made to introduce a standard amount of periodic pay below which employers could not compensate their workers.

Nineteenth century[edit]

New Zealand enacted the first national minimum wage laws that, unlike the wages board of Victoria, were enforced by compulsory arbitration.[1] In 1896 in Victoria, Australia, an amendment to the Factories Act provided for the creation of a wages board.[1] The wages board did not set a universal minimum wage; rather it set basic wages for six industries that were considered to pay low wages.[2] First enacted as a four year experiment, the wages board was renewed in 1900 and made permanent in 1904; by that time it covered 150 different industries.[3] By 1902, other Australian states, such as New South Wales and Western Australia, had also formed wages boards.[1]

Twentieth century[edit]

In 1907 Ernest Aves was sent by the British Secretary of State for the Home Department to investigate the results of the minimum wage laws in Australia and New Zealand. In part as a result of his report, Winston Churchill, then president of the Board of Trade, introduced the Trade Boards Act on March 24, 1909. It became law in October of that year, and went into effect in January 1910.[citation needed]

In the United States, statutory minimum wages were first introduced nationally in 1938;[5][6] some states enacted them as protective laws starting in 1912 until they were ruled illegal, but they applied only to women and children.[7] For example, Massachusetts was the first and its laws "had the power only to investigate conditions and recommend changes".[8]

In the European Union, 18 out of 27 member states currently have national minimum wages.[9] Many countries, such as Norway, Sweden, Finland, Denmark, Switzerland, Germany, Austria, Italy, and Cyprus have no minimum wage laws, but rely on employer groups and trade unions to set minimum earnings through collective bargaining.[10] In May 2014 Switzerland overwhelmingly defeated in a referendum a proposal to set the minimum wage at 22 Swiss francs ($25) which would have made it the world's highest.[11]

In addition to the federal minimum wage, nearly all states within the United States have their own minimum wage laws with the exception of South Carolina, Tennessee, Alabama, Mississippi and Louisiana.[12] Sixteen states have a minimum wage that is higher than the federal minimum wage. [13]

The first moves to legislate wages did not set minimum wages, rather the laws created arbitration boards and councils to resolve labour conflicts before the recourse to strikes. There used to be more heavy reliance on collective bargaining, with specific sectors. In 1896, New Zealand established such arbitration boards with the Industrial Conciliation and Arbitration Act. In 1899, the state of Victoria, Australia established similar boards. In 1907, the Harvester decision was handed down in Australia. It established a 'living wage' for a man, his wife and two children to "live in frugal comfort". In 1909, the Trade Boards Act was enacted in the United Kingdom, establishing four such boards. In 1912, the state of Massachusetts, United States, set minimum wages for women and children. In the United States, statutory minimum wages were first introduced nationally in 1938 by president Franklin D. Roosevelt.[14] In the 1960s, minimum wage laws were introduced into Latin America as part of the Alliance for Progress; however these minimum wages were, and are, low.[15]

See also[edit]


  1. ^ a b c Charles Henry Verrill, Charles Henry Verrill (1915). Minimum-wage Legislation in the United States and Foreign Countries Bulletin of the United States Bureau of Labor Statistics: Miscellaneous series. U.S. Government Printing Office. p. 105. 
  2. ^ Starr, Gerald (1993). Minimum wage fixing : an international review of practices and problems (PDF) (2nd impression (with corrections) ed.). Geneva: International Labour Office. p. 1. ISBN 9789221025115. 
  3. ^ Waltman, Jerold. "The Politics of the Minimum Wage." University of Illinois Press. 2000
  4. ^ Tritch, Teresa (March 7, 2014). "F.D.R. Makes the Case for the Minimum Wage". New York Times. Retrieved March 7, 2014. 
  5. ^ Sanjiv Sachdev (2003). "Raising the rate: An evaluation of the uprating mechanism for the minimum wage". Employee Relations. 
  6. ^ "History of the National Minimum Wage". Employment Matters. United Kingdom Department of Trade and Industry. 17 June 2006. Retrieved 2006-06-22.  Note: Date enacted was 1 April 1999
  7. ^ Folbre, Nancy, Greed, Lust and Gender: A History of Economic Ideas (Oxford: Oxford Univ. Press, 2009 (ISBN 978-0-19-923842-2)), p. 276 & n. 37 (author prof. economics, Univ. of Mass. Amherst).
  8. ^ "Both sides a debate: Minimum wage legislation". The Independent. Dec 14, 1914. Retrieved July 24, 2012. 
  9. ^ Eurostat (2006): Minimum Wages 2006 - Variations from 82 to 1503 euro gross per month(PDF)
  10. ^ Ehrenberg, Ronald G. Labor Markets and Integrating National Economies, Brookings Institution Press (1994), p. 41
  11. ^ "Swiss voters reject world's highest minimum wage proposal". Switzerland News.Net. Retrieved May 21, 2014. 
  12. ^ DOL WHD: Minimum Wage Laws in the States
  13. ^ Minimum Wage Rates in the United States
  14. ^ Sanjiv Sachdev (2003). "Raising the rate: An evaluation of the uprating mechanism for the minimum wage". Employee Relations. 
  15. ^ Bethell, Leslie (June 29, 1990). The Cambridge History of Latin America. Cambridge University Press. ISBN 0-521-24518-4.  p. 342.

External links[edit]