MINIMUM-WAGE LEGISLATION. These laws specify the minimum amount that employers may pay their employees for doing a specified type of work. The first minimum-wage laws in the United States were passed by state legislatures in the mid-nineteenth century and applied only to women and children. For example, in 1842 Connecticut passed a wage and hour law for children.
The concept of minimum-wage legislation gained popularity during the first two decades of the twentieth century, often referred to as the Progressive Era. In general, people who considered themselves progressives advocated using governmental authority to limit some of the negative effects of rapid industrialization and urbanization brought about by the growth of large-scale corporate capitalism. One of the evils they hoped to combat through legislation consisted of hourly wages that were often below the minimum necessary for subsistence.
The Problem of Liberty of Contract
During the Progressive Era minimum-wage legislation generally did not grant protections to men in ordinary occupations, but only to women and children, or to men in especially dangerous occupations. Men did not fall with in the scope of legislation regulating the pay or conditions of employment because they were thought to possess the constitutional right to enter into any contract they chose. This right was known as "liberty of contract." This doctrine held that parties who were legally able to enter into contracts should not have their freedom interfered with by the state unless such interference was necessary to protect the health, welfare, or morals of the community. For example, in Lochner v. New York (1905), the Supreme Court struck down a New York law limiting the working hours of bakers. While the case did not involve a minimum-wage law, it did establish that legislation regulating the terms of employment contracts represented an unconstitutional interference by government into the marketplace and thus violated the Fourteenth Amendment.
Despite the doctrine of liberty of contract, legislators and courts believed that contracts involving women could be governmentally regulated because of women's status as mothers. For example, in Muller v. Oregon (1908) the U.S. Supreme Court upheld an Oregon statute that set a maximum limit to the number of hours that women could work. This case demonstrated that the constitutional right to liberty of contract was a right possessed only by men. Nevertheless, even minimum-wage laws directed toward female employees remained controversial. Such legislation was held invalid in New York in 1901, Indiana in 1903, and Nebraska in 1914. Between 1914 and 1920, however, judges in Oregon, Minnesota, Arkansas, Washington, and Massachusetts upheld minimum-wage laws for women, reasoning that the physical condition of women required special legislative protection through the use of the state's police powers.
After women gained the right to vote in 1920, the Supreme Court altered its jurisprudence and held in Adkins v. Children's Hospital (1923) that a federal minimum-wage provision for women unconstitutionally violated their right to freedom of contract. Adkins involved a minimum-wage rate set by the District of Columbia that was based on detailed studies of prices for food, housing, clothing, and other budget items. The defendant, Children's Hospital, claimed it could not afford to pay its female housekeepers the statutory minimum wage. In Adkins, a majority of the Supreme Court, in a close decision, refused to follow the Muller decision and made no reference to the burdens of motherhood on women workers. Instead it relied on the Lochner case for authority for its decision, stating that the legal and political differences between the sexes "have now come almost, if not quite, to the vanishing point." The Court majority relied on the passage of the Nineteenth Amendment giving women the right to vote to demonstrate this legal and political equality. According to the Court, this revolutionary change in women's legal status now granted women the same rights to liberty of contract as men, including the right to agree to work for less than the state-sanctioned minimum wage.
Passage of Federal Minimum-Wage Legislation
As the economy worsened during the Depression, many states once again attempted to enact minimum-wage legislation. The federal government also became an advocate of a national minimum wage. In 1933 as a part of President Franklin Roosevelt's New Deal, Congress passed the National Industrial Recovery Act (NIRA). This legislation attempted to stimulate business recovery by allowing individual industries to draft codes of fair competition. A number of these codes set minimum-wage levels for particular types of work. In 1935 the Supreme Court struck down the NIRA in Schechter Poultry Corp. v. United States, finding that among other defects, the legislation could not be supported by Congress's power under the commerce clause because the employees and the company violating the code were not engaged in inter-state commerce.
Soon afterward the Court demonstrated that it was willing to strike down state as well as national legislation imposing a minimum wage. In 1936 in Morehead v. New Yorkex rel. Tipaldo, the Supreme Court narrowly voted to strike down a New York minimum-wage law for women and children. Relying on Adkins, the Court again held that the right to contract freely for wages is protected by the Constitution, and that this right applied to women and children as well as to men. One of the dissenters in the case, Justice Harlan Fiske Stone, noted that "there is grim irony in speaking of the freedom of contract of those who, because of their economic necessities, give their services for less than is needful to keep body and soul together." Many members of the public strongly criticized the decision.
The following year in a dramatic reversal of policy, the Court upheld a Washington State minimum-wage law for women. The law at issue in West Coast Hotel v. Parrish (1937) closely resembled the law the Court had struck down in Morehead v. New Yorkex rel. Tipaldo only the year before. Justice Roberts, the key swing vote in the More-head case, switched sides and voted to uphold the law. Many observers attributed Jackson's decision to change his vote to the fact that the decision was handed down less than two months after President Franklin D. Roosevelt announced his plan to pack the Supreme Court with justices more supportive of New Deal economic regulation. For this reason the decision is sometimes called "the switch in time that saved nine." Yet whether a direct causal link actually existed between the two events is less than clear.
In Parrish, the Court explicitly overruled the Adkins decision, holding that liberty of contract, while protected by the Constitution, was subject to reasonable regulation in the interest of the community. Justice Hughes, who authored the opinion, stated that "the Constitution does not speak of freedom of contract" and noted that "the Constitution does not recognize an absolute and uncontrollable liberty."
The decision in Parrish opened the door for both states and the federal government to pass legislation regulating the wages and hours of employees. In 1938 Congress passed the Fair Labor Standards Act (FLSA) that established a federal minimum wage. The FLSA originally applied to industries whose combined employment represented only about one-fifth of the labor force. In those industries it banned oppressive child labor and set the minimum hourly wage at 25 cents and the maximum work week at 44 hours. In 1941 the Supreme Court upheld the constitutionality of the FLSA. Because the FLSA covered only employees engaged in activities in interstate commerce, many states also enacted their own minimum wage laws. The FLSA provides that when state and federal minimum wage legislation both apply, the higher standard governs.
After passage of the FLSA, questions arose as to which types of work-related activities were covered by the act. In 1947 Congress amended the FLSA by enacting the Portal-to-Portal act, which overturned a Supreme Court decision permitting extra pay for employees engaged in preparation and clean-up work. Under the act, only work that is an integral and indispensable part of the employee's principal activities is entitled to compensation. Over the years Congress has amended the FLSA to add categories of employees covered by its provisions and to raise the level of the minimum wage. The minimum was raised to $5.15 hour, effective as of 1 September 1997.
In 1963 Congress passed the Federal Equal Pay Act, which provides that men and women must receive equal pay for equal work in any industry engaged in interstate commerce. Congress has also passed additional legislation that covers the federal government as both an employer and a purchaser of goods and services. This legislation requires it to pay preestablished minimum wages to its employees (Davis-Bacon Act of 1931) and requires that parties holding government contracts do the same (Walsh Healey Public Contracts Act of 1936).
Cox, Archibald, et al., eds. Labor Law: Cases and Materials. 13th ed. New York: Foundation Press, 2001.
Hall, Kermit L. The Magic Mirror: Law in American History. New York: Oxford University Press, 1989.
Irons, Peter H., and Howard Zinn. A People's History of the Supreme Court: The Men and Women Whose Cases and Decisions Have Shaped Our Constitution. New York: Penguin, 2000.
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