Minimum wage

The idea that governments should set a floor on wages gained traction in the late nineteenth century, driven by labor movements, religious organizations, and reformers who argued that market wages alone could not sustain a worker's basic needs. New Zealand enacted the first national minimum wage in 1894 through the Industrial Conciliation and Arbitration Act. Australia followed in 1896. In the United States, momentum built through decades of legislative struggle, court challenges, and political compromise.

The Fair Labor Standards Act, signed by President Franklin Roosevelt on June 25, 1938, established the first federal minimum wage at twenty-five cents per hour, alongside a forty-four-hour workweek (reduced to forty hours in 1940) and restrictions on child labor. The act initially covered only about twenty percent of the labor force, excluding domestic workers, agricultural laborers, and other groups. Frances Perkins, the first woman to serve as Secretary of Labor and a driving force behind the legislation, had been working toward labor protections since witnessing the Triangle Shirtwaist Factory fire of 1911.

The minimum wage has been raised twenty-two times since 1938, most recently to $7.25 per hour in July 2009. Its real purchasing power peaked in 1968 at $1.60, equivalent to approximately $14.81 in 2025 dollars. The current federal minimum is worth roughly forty-two percent less than that 1968 peak. As of 2025, approximately thirty states have set minimum wages above the federal floor, with some exceeding $15 per hour.

The debate over minimum wage policy has remained remarkably consistent across nine decades. Proponents argue it reduces poverty and supports consumer spending. Opponents argue it reduces employment, particularly for young and low-skilled workers. What has changed is the gap between the wage floor and the cost of living, which has widened steadily since the 1980s as congressional increases have become less frequent and inflation has eroded the real value of each adjustment.