In 1938 President Franklin D. Roosevelt signed the Fair Labor Standards Act (FLSA). “The Act provided sweeping regulations to protect American workers from exploitation in sweat-shops and factories-including workplace protection provisions and a ban on child labor” (Raising the minimum wage). With slowly recovering from the Great Depression and employers paying substandard wages in an effort to provide lower priced goods, Congress found “that these decreased wages caused one-third of the U.S. population to be ill-nourished, ill-clad and ill-housed” (Minimum Wage Overview). President Roosevelt and Congress believed the Fair Labor Standards Act (FLSA) and a minimum wage of $0.25 an hour, would not only boost the economy but also provide healthier living conditions for the low-skilled workers. Nearly 75 years after FLSA was enacted the Bureau of Labor Statistics reports,”75.3 million workers in the United States age 16 and older were paid at hourly rates, representing 59 percent of all wage and salary” (Raising the Minimum Wage). 1.6 million of those workers earned minimum or near minimum wages and 2 million earned less than the minimum wage. The two largest groups of people earning minimum wage or slightly higher, are unskilled teenagers, who make up …show more content…
In fact, recent research has concluded that overall, if done correctly and in moderate increments, increasing the minimum wage could have little to no negative effects and even possibly positive effects on employment. “It is important to note that the possibility of increased employment only applies for moderate increases in the minimum wage-employment must fall if the wage increase is too high” (To,
In 1933 President Franklin D. Roosevelt produced a progression of economic policies called The New Deal. One of those policies which, became known as the minimum wage, guaranteed that all workers in America earn enough pay to provide for their families. The New Deal marked the beginning of federal control of wages to make certain every worker be able to earn a living wage. The economic system was created by people, is maintained by people, and is constantly modified by people (Cunningham 52).
Depression; because Roosevelt felt that an action need to be taken about the long hours and starvation wages.Before the FLSA , “it was common for workers to experience cruel work environments.” (Dugger 1) President Roosevelt was handed a message by a girl stating “We have been working in a sewing factory... and up to a few months ago we were getting our minimum pay of $11 a week.... Today the 200 of us girls have been cut down to $4 and $5 and $6 a week.” (Dugger 2). Consequently, Roosevelt worked to pass a legislation that would protect Americas laborers.
Even the president said, "Something has to be done about the elimination of child labor and long hours and starvation wages" (Roosevelt). People worked to their breaking points and then still not being able to provide for their families. People were paid “starvation wages”, which are wages that are not high enough to pay for necessities (“Merriam-Webster”). Hoovervilles, otherwise known as hobo-camps or squatter-camps, began to arise (“Hoovervilles”). Obviously, extreme poverty and famine were a huge problem. The government got involved. FDR stated, "Do not let any calamity-howling executive with an income of $1,000 a day, ...tell you...that a wage of $11 a week is going to have a disastrous effect on all American industry" (Roosevelt). As a result, the Fair Labor Standards Act went into effect. Moreover, the Fair Labor Standards Act established minimum wage to prevent starvation wages, record keeping to avoid long hours, and regulations on child labor to prevent the labor abuse of children (“Fair Labor Standards Act (FLSA) of 1938”). It also put standards on how much employers had to provide. For example, things such as vacation, sick days, or raises are not required underneath the Fair Labor Standards Act (“Fair Labor Standards Act (FLSA) of 1938”). Through placing regulations on labor practices, the Fair Labor Standards Act helped people begin to have rights in their jobs, therefore making work be little
Unlike any president before him, President Roosevelt faced the Great Depression and created the New Deal to try and ensure the economic and political wealth of the United States. In 1935, the federal government guaranteed unions the right to organize and bargain collectively, and the Fair Labor Standards Act of 1938 established minimum wage and maximum outs. Beginning in 1933, the government also helped rural and agricultural American with development programs and assume responsibility for the economy of the United States. Essentially, the New Deal sought to ensure that the benefits of American capitalism were spread equally amongst the many diverse peoples of the United States. Even though Roosevelt's New Deal failed to cure completely the economy of the Great Depression, his governmental policies during it established a new norm for succeeding governments to
The FLSA began on a Saturday, June 25, 1938, President Franklin D. Roosevelt signed 121 bills, one of them being the landmark law in the Nation's social and economic development the Fair Labor Standards Act of 1938 ( Grossman, 1978). This law did not come easy, wage-hour and child-labor laws had made their way to the U.S. Supreme Court in 1918 in Hammer v. Dagenhart in which the Court by one vote held unconstitutional a Federal child-labor law. Similarly in Adkins v. Children's Hospital in 1923, the Court voided the District of Columbia law that set minimum wages for women, during the 1930's the Court's action on other social legislation was even more devastating (Grossman, 1978). Then came the New Deal Promise in 1933, President Roosevelt's idea of suspending antitrust laws so that industries could enforce fair-traded codes resulting in less competition and higher wages; It was known as the National Industrial Recovery Act (NRA) ( Grossman, 1978). The President set out "to raise wages, create employment, and thus restore business," the Nation's employers signed more than 2.
“Franklin Roosevelt’s 1937 impassioned speech calling on Congress to help the one-third of Americans who were “ill-housed, ill-clad, and ill-nourished” heralded in the Fair Labor Standards Act of 1938 and with it a national minimum wage. Echoes of that speech are still heard today. Senator Edward Kennedy (1989: S14707), in his criticism of the most recent increases in the minimum wage, declared:
Many people against raising the minimum wage create arguments such as, “it will cause inflation”, or, “ it will result in job loss.” Not only are these arguments terribly untrue, they also cause a sense of panic towards the majority working-class. Since 1938, the federal minimum wage has been increased 22 times. For more than 75 years, real GDP per capita has consistently increased, even when the wage has been
Minimum wage is a difficult number to decide on because it affects different income earning citizens in different ways. According to Principles of Microeconomics, by N. Gregory Mankiw, minimum wage is a law that establishes the lowest price for labor that and employer may pay (Mankiw 6-1b). Currently, the minimum wage in the United States is $7.25 per hour. For many years politicians and citizens have argued on what should be the minimum wage that would benefit the economy and society in general. A minimum wage was first established in 1938 to increase the standard of living of lower class workers. To discuss what is better for the country and its citizens, people have to understand what is a minimum wage and what are its effects.
The Fair Labor Standards Act The Fair Labor Standards Act (FLSA) was passed by Congress on June 25th, 1938. The main objective of the act was to eliminate “labor conditions detrimental to the maintenance of the minimum standards of living necessary for health, efficiency and well-being of workers,”[1] who engaged directly or indirectly in interstate commerce, including those involved in production of goods bound for such commerce. A major provision of the act established a maximum work week and minimum wage. Initially, the minimum wage was $0.25 per hour, along with a maximum workweek of 44 hours for the first year, 42 for the second year and 40 thereafter. Minimum wages of $0.25 per hour were established for the first year, $0.30 for the second year, and $0.40 over a period of the next six years.
Transition: Last year the federal minimum wage celebrated its 75th birthday last week as part of the federal 1938 Fair Labor Standards Act. The Act banned child labor, set a 44 hour maximum workweek, and guaranteed a minimum wage of 25 cents an hour. (Hitzik) Since then Congress has raised the rate 23 times. (USDOL)
Some think that the minimum wage should not be raised, but others think that the minimum wage should be raised. If one had to be chosen, raising the minimum wage would be better. The minimum wage should be raised because if you were to work full time on minimum wage, you are below the poverty line; Also states that did raise the minimum wage above the federal standard have had more job growth than states that did not. Finally, "Minimum wage workers are much more likely to immediately go out and spend that extra money in the economy," says Heidi Shierholz of the Economic Policy Institute, which favors raising the minimum. "That's because they're often living paycheck to paycheck."
"Raising the minimum wage will benefit about 28 million workers across the country. And it will help businesses, too - raising the wage will put more money in people's pockets, which they will pump back into the economy by spending it on goods and services in their communities." -- President Obama
According to Principles of Macroeconomics by Gregory Mankiw, “The U.S. Congress first instituted a minimum wage with the Fair Labor Standards Act of 1938” (Mankiw 4-119). Minimum wage is used to set a limit of pay employers must pay their employees. Through the years the minimum wage has raised as productivity has raised. The minimum wage has constantly fluctuated and changed multiple times.
Today the federal minimum wage is $5.15, but should be about $8.50 if Congress had adjusted it for inflation over the past 35 years. While $5.15 may not seen that bad, when factoring in such variables as sky rocketing gas prices, budgets can get pretty tight. David Shepard, a sophomore at Wayne State University, worked at a Meijer Retail and Grocery Superstore for over two years while in high school. At the time Shepard lived with his parents and didn’t have to worry about paying rent or buying groceries, all that he had to pay for was filling up his gas tank and paying for his car insurance. Shepard recalled, “It was all I could do to pay for the basics like gas and bill’s, I barely had any money to have fun on the weekends”. This is only an example of a high school student that can nearly slip by on minimum wage with only a few expenses. There are 1.8 million people in America with children under the age of 18 that would benefit from an increase in minimum wage (Minimum).
However, there are those who see it completely the opposite way. Stating that by raising the minimum wage the economy would be better. More people would be able to support themselves; therefore lowering the percentage of poor people and raising the middle-class numbers. It is also argued that this change would not increase the number of unemployment, instead it could potentially raise employment by creating more jobs. Holly Sklar states in her research article, “Research by Fiscal Policy Institute and others showed that states that raised their minimum wages above the federal level experienced better employment and small business trends than states that did not.”