Wages and Hours of Labor, Regulation of
Wages and Hours of Labor, Regulation of
WAGES AND HOURS OF LABOR, REGULATION OF
WAGES AND HOURS OF LABOR, REGULATION OF. The historical pattern of hourly wages in the United States—rapidly rising money wages, more slowly rising real wages, and persisting differences in occupational, industrial, and sectional wages—can largely be explained in terms of broad productivity trends and competitive market forces. The long-term, sometimes pronounced, decline in the workweek resulted as much from pressures exerted by organized labor, government, and society in general, as from the traditional influences of supply and demand.
The Fair Labor Standards Act of 1938 comprised the principal New Deal-era legislation aimed at regulating wages and hours after the U.S. Supreme Court invalidated the wage and hour codes under the National Industrial Recovery Act in 1935 (Schechter Poultry Corporation v. United States). With respect to wages, the 1938 law limited itself to fixing a minimum rate only, which rarely established more than an absolute floor for the least-skilled jobs. (As late as 1975, the minimum wage stood at only $2.10 per hour for nonfarm workers and $1.80 for farm workers, lower than the rates actually being paid in most fields.) In setting a maximum standard of forty hours per week and eight hours per day, beyond which it required employers to pay time-and-a-half wages, the 1938 law established a standard that remained close to the prevailing practice for the next half century. Only for employees in big-city offices and in a few fields, such as construction and the needle trades, did standard work-hour schedules fall below these levels.
At the beginning of the nineteenth century, the number of work hours ranged upward from twelve hours a day, six days a week. Public agitation in the 1820s eventually led to a new norm of ten hours a day and sixty hours a week in most industries. After the Civil War, the eight-hour day became the focus of a national movement, but this level was not widely adopted until the 1920s, and the working world did not generally accept the five-day work-week until the 1930s.
Before the founding of the American Federation of Labor in 1886, recurring efforts were made to pass federal and state laws limiting hours of work for all classes of labor. Resorting to legislation tended to be especially frequent when unemployment rates rose and direct bargaining prospects looked unfavorable. Employers vigorously resisted these efforts, and during the nineteenth century the courts struck down many of these laws on the grounds that they abridged freedom-to-contract rights.
State legislatures became increasingly active in limiting hours of work for women and children, and Massachusetts enacted the first enforceable lawin 1879. The courts, too, gradually began to reverse their position on such laws, and in 1908 the Supreme Court upheld Oregon's ten-hour law for women in mechanical establishments, laundries, and factories (Muller v. Oregon).
The legal regulation of hours of labor for men followed a different course because businesses mounted a much stronger resistance in the courts. One approach was for the federal, state, and local governments to establish shorter work hours for public employees; President Martin Van Buren, for example, issued an executive order in 1840 limiting work in navy yards to ten hours a day. In another more widely used approach, legislators enacted state and federal statutes limiting men's hours in specified industries, such as mining and railroads. A noteworthy event occurred in 1916 when Congress passed the Adamson Act, which provided for the eight-hour day for operating railroad employees, with time-and-a-half for over-time. Finally, the continuing effort to win court approval for general hours legislation succeeded in 1917 when the Supreme Court upheld an Oregon law establishing ten-hour days for most men in mills, factories, or manufacturing establishments (Bunting v. Oregon).
Government efforts to establish minimum wage standards traditionally centered on protecting women and children. The Supreme Court brought these efforts to a halt in 1923, when it ruled that such legislation deprived individuals of their freedom to contract (Adkins v. Children's Hospital). The demoralization of labor market standards with the onset of the Great Depression prompted further minimum wage action along more inclusive lines; in 1937 the Supreme Court upheld the authority of the states to enact such legislation (West Coast Hotel Company v. Parrish), and in 1941 it upheld the national minimum wage law as a valid exercise of the federal power to regulate interstate commerce (United States v. F. W. Darby Lumber Company). The federal government also established minimum wages for special categories of employment, such as airline pilots and construction workers under federal contracts.
Although Congress took a series of steps to increase the initial minimum rate set by the Fair Labor Standards Act in 1938 (25 cents per hour), the 1976 rate of $2.30 was actually no higher in relation to prevailing wages. The law's main economic impact resulted from its extended coverage rather than its level: by 1975 it applied to nearly 80 percent of all no nsupervisory employees in private industry; in 1960 it covered only about 55 percent. The newly covered workers, moreover, were in such low-wage industries as farming, where the law's effect was clearly greatest. Whatever broad social benefits may be achieved by the legislation, on the other hand, it is clear that it tends to reduce employment opportunities in low-paying fields by reducing the number of available jobs.
Government regulation of wages has largely been aimed at setting minimum rates only. Any effort to set maximum rates as a means of checking inflation has traditionally been limited to war periods. On 15 August 1971, however, the federal government adopted a policy of limiting most wage increases to 5.5 percent per annum, along with maximum ceilings on price increases, in hopes of checking inflationary pressures. These pressures soon reasserted themselves, and controls, which had begun to be phased out in late 1973, expired on 30 April 1974.
From 1976 to 1981, the federal minimum wage continued to rise each year, from $2.30 to $3.35. The federal minimum wage remained steady throughout the rest of the 1980s during the Reagan administration and did not increase again until the early 1990s, when it became $3.80 in 1990 and $4.25 in 1991. In 1996 it increased to $4.75, but a year later, the federal minimum wage rose yet again to $5.15, where it has remained ever since. Despite these recent increases, however, the federal minimum wage has not kept up with the rate of inflation. Although in the 1960s and 1970s, a full-time, year-round minimum-wage worker could make enough to support a family of three above the poverty level, that is no longer the case. By 1999 that same worker only made about $10,700 annually, which was more than $2,500 below the poverty line for a family of three. Eleven states, however, require higher minimum wages than the federal government does, and in those states, the greater state wage prevails.
Dankert, Clyde E., Floyd C. Mann, and Herbert R. Northrup, eds. Hours of Work. New York: Harper and Row, 1965.
Northrup, H. R., and G. F. Bloom. Government and Labor: The Role of Government in Union-Management Relations. Homewood, Ill.: R. D. Irwin, 1963.
Frank C.Pierson/c. w.; a. e.
See alsoAmerican Federation of Labor-Congress of Industrial Organizations ; Fair Labor Standards Act ; National Recovery Administration ; Price and Wage Controls ; Walsh-Healey Act andvol. 9:Women in Industry (Brandeis Brief) .