THE FIRST MINIMUM WAGE LAWS

Clifford F. Thies

Overview

The first minimum wage law was enacted in 1912 by Massachu-setts. Like most of the other early minimum wage laws, this lawprovided for the establishment ofregulatory boards that set minimumwages for women equal to the cost of living as determined by thehoard 2 Alco hL-e moot

0t 1-he other earl,, miruin-ulim ~uacte ionic 1-he

ment, it is not unreasonable to say that these differences have nowcome almost, if not quite, to the vanishing point.

Chief Justice William Howard Taft, dissenting in Adkins, stated:“Legislatures, in limiting freedom of contract between employerand employee by a minimum wage proceed on the assumption thatemulovees, in the class receiving the least nay. are not unon a full

Arizona 1917 Overturned by Supreme Court in 1925 inMurphy v. Sardell, followingAdkins.

Arkansas 1915 Overturned by Supreme Court in 1927 inDonham v. West Nelson Manuf. Go.,following Adkins.

California 1913 Waited until Supreme Court upheld

South Dakota 1923 Never enforced.

Texas 1919 Never enforced, repealed in 1921.

Utah 1913 Set low minimums, believed not effective

in raising wages, repealed in 1929.

Washington 1913 Upheld by Supreme Court on a 5-4 vote

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not believe the “new design” law to be substantively different, hebelieved that the Adkins decision was itself wrong (Levitan andBelous 1979, p. 30). Accordingly, the next year, the Supreme Courtcalled up another minimum wage case, this one dealing with Wash-ington’s longstanding minimum wage law. In this case, West Goast7_I//I_-a f-’.. D_-./.~./L •1_-~~/~ f-’_-~.i- ~ ~ A ~n-_-.

neaiey nncis unanimous support tnat ireeiy entereci into contractsdetermined the just wage. Among those who considered whetherpeople could freely enter into onerous contracts, all agreed that the“use of physical force against a workerto elicit consent toa particularwage was condemned.” Nevertheless, some held that it was notunjust “to profit by the inner compulsion of a worker’s hunger”

~ccorcung to r~yani~nflu~i,pp. io—i 1), tne inaustriai revoiution was“aperiod ofhorror,” characterized by “wage slavery.” If this analysisis to be believed, common people lived well in pre-capitalist times,and capitalists were morally obliged to pay workers at least whatthey would have earned if capitalism had not arrived on the scene.6

The obvious fact is that workers cannot be long employed at less~ ~ ~ ~..

store to report for work at9a.m. Such is herround—her life boundedby the jewelry counter in the store and the crowded room in thequestionable section of the city [pp. 1678—79].

These are not descriptions of below subsistence wages. They aredescriptions of low, but still above subsistence, wages and of stan-dards of living below the expectations of the middle-class social

a;;ro;;at:naddon to differences in the cost ofli;ing dueto “economies” workers can make in their own living expenses, thecourt further noted that workers can make “cooperative economies”by living in family groups.

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Due to limitations in the gathering, processing, and reporting ofthese data, it is not clear who exactlywere low-wage women workers.Often, only the overall distribution of wages are reported, so that itis impossible to tell if low wages were due to part-time work, toinexperienced, aged, or handicapped workers, to nonwage benefits

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Industry Industry Kansas OhioExperience 1915” 1919’ 1921~

1923d

0—3 mos. $4.98 $ 8.67 $ 9.65 $11.953—6 mos. 4.98 8.67 10.05 11.956—12 mos. 4.98 10.23 10.45 13.151—2 yrs. 5.69 10.52 11.10 13.75

¶p. ~Z).

In spite of the high correlation of wages with experience andoccupational skill level, the Women’s Bureauasserted, “Wagesettingseems to be more or less a matter of chance” (p. 20). Furthermore,without identifying why productivity should be correlated with ageor familial responsibilities, the Women’s Bureau wenton to state that~f f,-~,.,-,,1 “n,~ l,n~t~,.n1~ ks~1-~~,aane,ca~,o~,,l ,~niiL~1~,~~.-n~,-rni- “

e;amiriing the distribution of wages inMassachusetts using that state’s annual census of manufacturing.

The annual census of manufacturing conducted by the state ofMassachusetts is a unique data source. During the time period underinvestigation, Massachusetts conducted its own census of manufac-tnrin~in those ve~rcin which the federnl government did not conduct

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try in these two years rose to 84 and 90 percent of the mean weeklywage of women employed in all manufacturing industries.

Presuming that minimum wages truncate a normal distribution ofwages, Meyer and Wise (1983) analyze a sample of 4,000 16—24year old non-students drawn from the May 1978 Current PopulationSurvey. They estimate that 23 percent of people who would be

~~aoor I~io~k).‘.ai i,ioi responuents, o,wo or oi percent reporteasome kind of offset to the wages raised by the law. Among theseoffsets were reductions in daily wage guarantees and other wagepremiums, and reductions in fringe benefits. Also, there were reduc-tions in workers’ hours, the employment of extras, and meal andrest periods, and changes in work assignments. These offsets are

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Datapertaining to the economic effects of the first minimum wagelaws are fragmentary. In spite of the lack of data, advocates of mini-mum wageswere quick toproclaim their success. Generally, ifwagesrose following the issuance of a minimum wage decree, this wasattributed to the decree; and, if wages remained the same or fell, this

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claimed there was “abtindant evidence . . . that it has worked toincrease the wage level and that.. . the minimum wage has not ledtoany general or widespread discharge ofwomen” (Monthly Review,April 1917, p. 566).

In order to determine the economic effects ofthese wage deci-ees,1-ha etr,1-a ,,,n,1,~,-,4-a,l n-~,i~l~‘,.rn,a,, Uai-,~-,n~ai- ,.,a~a ,a,.a.,a/-l f,’an, 11Y7

Location Braindeis” Bureaub SteckeP

Arizona IneffectiveArkansas Effective EffectiveCalifornia Effective Effective EffectiveColorado Never EnforcedD.C. Effective Effective

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cent decline formales, and inspite ofa rising trend in female employ-ment as salespersons and clerks relative to males from the 1900 to1910 census. (3) Female payrolls dropped relative to male, fallingby 7.3 percent compared to 5.0 percent for males. (4) There wasconsiderable substitution of girls for women. (5) Other possibleooiioeo (~~ ~

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0n of nialeo for femalec ,-liirinii a

1000

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600 ~ ~-t

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Special licenses take care of some of these, but often neither theemployer nor the employeewishes them; in these cases, the commis-sion has waived even this requirement and recorded the case as a‘special license type,’ in order to prevent the discharge of olderwomen who would find greatdifficulty in getting new employment”1CI////L•/~. 1001 100\

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p. A34).The state of Oregon claimed that “the ‘liberty’ which Simpson

asserts is fictitious, theoretical and against her own interest” (p. A22).This claim assumed that Simpson would not be unemployed byminimum wage legislation, so that her appeal to the court was to

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the one hand, there were those who viewed minimum wages as away of providing a living wage to low-wage workers. On the other,there were those who viewed minimum wages as part of a programof keeping the destitute, including the aged, infirm, widowed, andimmigrant, segregated and offshore.’5

There really can be no wonder that the glue that held this coalition

Minimum Wage on Teenage Employment and Unemployment.” Journalof Economic Literature 20 (June 1982): 487—528.

Chafuen, Alejandro. “Wages.” In Christians for Freedom, pp. 123—31. SanFrancisco: Ignatius Press, 1986.

Commons, John B., and Andrews, J. B. Principles of Labour Legislation.New York: Harper and Bro., 1920.

Consumers League ofOhio. “An Analysisofthe Report ofthe Ohio Minimum

Wages and Conditions of Laborfor Women. Lansing, 1915.Miller, Roland M. “California’s Reasonable Minimum Wage.” Minimum

Wages and Maximum Hours, pp. 287—97. Edited by E. R. Nichols andJoseph H. Baccus. New York: H. W. Wilson, 1936.

Mincer, Jacob. “Unemployment Effects of Minimum Wages.” Journal ofPolitical Economy 84 (August 1976, supplement): 87—104.

Morris, Victor. Oregon’s Experience with Minimum Wage Legislation. New

U.S. Department of Labor, Iiureau 01 Labor Statistics. ~Irnimum WageLegislation in Various Countries.” Bulletin no. 467, 1928.

U.S. Department of Labor, Bureau of Labor Statistics. Monthly Review ofthe U.S. Bureau ofLabor Statistics. Various issues.

U.S. Department of Labor, Women’s Bureau, “Wages of Candy Makers inPhiladelphia.” Bulletin no. 4, 1919.

U.S. Department of Labor, Women’s Bureau. “Women’s Wages in Kansas.”