Minimum wage: A history

Feb. 11 , 2007
By JOSEPH M. DELEON News-Post Staff
jdeleon@fredericknewspost.com

      New Zealand was the first country to establish a national minimum wage in 1896, according to the European Foundation for the Improvement of Living and Working Conditions. Australia and Great Britain followed three and five years later, respectively.
     In 1938, the United States became the fourth nation to create a minimum wage.
     Supporters maintain minimum wage is a matter of social justice that helps reduce worker exploitation and ensure a living wage. Critics believe minimum wage slows economic growth and increases unemployment, especially among low-wage workers.
     The U.S. Congress passed the Fair Labor Standards Act of 1938 to protect workers from substandard living conditions, according to the U.S. Department of Labor.
     The act established a 44-hour work week at 25 cents per hour for workers engaged in interstate commerce, including those making goods bound for interstate business.
     The act was amended seven years later to 40 cents an hour and standardized the 40-hour work week.
     Some classes of workers, such as agricultural and seasonal laborers and handlers of perishable foods, initially were exempt from the act because they benefit ed from collective bargaining.
     Over the years, the act has been amended to cover more classes of workers, raise the minimum wage, balance pay between men and women and define the difference between regular and overtime pay to encourage the hiring of new workers and reduce loading extra work on the lowestpaid.
     Congress is considering increasing the minimum wage from $5.15 to $7.25 an hour over the next two years. The rate was last increased in 1997 from $4.75 to $5.15.
     In April, minimum wage in New Zealand will increase nearly 10 percent to NZ$11.25, equivalent to about $7.70 in the United States.
     Many European countries, such as Sweden, Germany, Italy and Norway, still have no minimum wage laws, preferring to rely on labor groups and trade unions to collectively bargain minimum earnings, according to the book “Labor Markets and Integrating National Economies.”