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Today’s Pay Hike Recalls Great Depression
On June 16, 1933, Franklin D. Roosevelt signed the National Industrial Recovery Act — and the first federal minimum wage was established at 25 cents an hour.
Today, with the Fair Minimum Wage Act of 2007‘s latest increase going into effect, the nation’s minimum wage has risen to more than 26 times that amount — but taking inflation into account reveals that the real path of the American minimum wage has followed anything but a clear upward trend.
Federal minimum wage emerged as one of FDR’s many weapons to combat the economic woes of the Great Depression, and the 1933 President’s Reemployment Agreement, authorized by the aforementioned Recovery Act, outlined the United States’ first strict set of hours and wage guidelines for American employers.
But when the act was declared unconstitutional in 1935, minimum wage suffered the first of many blows, only entering back into legislation — this time to stay — in 1938.
Since then, the nominal dollar value has steadily risen. But despite surface numbers, it was President Lyndon B. Johnson who saw it at its highest value in 1968 — about $9.47 in 2007 dollars. As a congressman, Johnson had worked towards the first minimum wage law being passed, and in 1967, he declared his longtime support of the “workers that you rarely see” at a ceremony marking the increase to a new all-time high: $1.40.
After 1968, however, the real dollar value of the minimum wage has been locked in a downward slide. Today’s — and next year’s — increases have begun to reverse that trend — a move economists hope will help many of Johnson’s not-so-invisible workers battle our current economic slump.
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This post is part of a Miller-McCune.com series on intriguing, amusing,
and memorable moments of the American presidency inspired by the
American Presidency Project (www.americanpresidency.org) and running until the November election.
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