Happy Birthday to the Minimum Wage!

One hundred years ago this week, on June 4, 1912, Massachusetts enacted the first minimum wage law in the United States – the first in a series of similar laws that states passed in the years before the federal minimum wage was established in the Fair Labor Standards Act (FLSA) of 1938. 

In honor of this milestone, I read up on the history of the minimum wage and was struck by how one old adage seems to apply: the more things change, the more they stay the same.  Here are a few facts about the minimum wage in its early days that remain just as true today.   

• The minimum wage is critical issue for women.  That first minimum wage law in Massachusetts set up a commission to determine a minimum wage only for women workers, who were especially vulnerable to exploitation by employers and regularly were paid less than men.  It was the first female Cabinet member – Frances Perkins, the Secretary of Labor under President Franklin D. Roosevelt (and an all-around rock star) who later advocated forcefully for the first federal minimum wage law, often citing the particularly deplorable wages and working conditions faced by women and children.
  Today, women are the vast majority of minimum wage earners across the country, which is one of the reasons that they still regularly earn less than men: in 2010, women working full time, year round were paid only 77 cents for every dollar paid to their male counterparts.  Raising the federal minimum wage from $7.25 to $9.80 per hour (and setting the minimum cash wage for tipped workers at 70 percent of the minimum wage, up from just $2.13 per hour), as proposed in the Rebuild America Act, would boost the earning power of millions of women and help close the gender wage gap.  

• A higher minimum wage promotes economic recovery.  Back in 1933, in the midst of the Great Depression, Secretary Perkins asserted that the time was right for a federal minimum wage.  In her essay titled “Why We Need a Minimum Wage Law,” Perkins observed that “[most] American business men… understand[] that security for [themselves] and for the country depends on building the purchasing power of the wage-earners.”

  The same is true today.  Minimum wage earners need virtually all of their income to make ends meet, so they spend it quickly, injecting money into our economy.  The Economic Policy Institute estimates that by the third year of its implementation, the minimum wage increase in the Rebuild America Act would generate about $25 billion in additional economic activity and around 100,000 jobs – jobs that are sorely needed in our slow recovery from the recession.

  If you hear arguments to the contrary about “job-killing” minimum wage hikes, consider the source.  As FDR sagely advised back in 1938, “Do not let any calamity-howling executive with an income of $1,000 [$16,308 in 2012] a day...tell you...that a wage of $11 [$179.50 in 2012] a week is going to have a disastrous effect on all American industry.”    

• States can lead the way to a higher minimum wage. One hundred years later, Massachusetts is again among the states at the forefront: its current minimum wage of $8.00 an hour is higher than the federal minimum, and a bill approved by the state’s Joint Committee on Labor and Workforce Development (S. 951) would gradually raise the state minimum wage to $10.00 per hour.  Bills to raise the state minimum wage are also pending in New Jersey, New York, and Illinois, and an increase looks likely to be on Missouri’s ballot in November.   

And one more thing: if Frances Perkins were alive today, I’m sure she’d agree that when it comes to raising the minimum wage, women’s voices matter.