Fair Labor Standards Act (1938)

President Roosevelt signed the Fair Labor Standards Act (popularly known as the Wages and Hours Bill) on June 25, 1938. The law established a minimum wage (25 cents per hour, soon to rise to between 30 and 40 cents per hour), a standardized 44-hour work week (which would later drop to 40 hours), a requirement to pay extra for overtime work, and a prohibition on certain types of child labor [1].

The day before he signed the law, Roosevelt told the American people: “Except perhaps for the Social Security Act, [this] is the most far-reaching, far-sighted program for the benefit of workers ever adopted here or in any other country. Without question it starts us toward a better standard of living and increases purchasing power… Do not let any calamity-howling executive with an income of $1,000 a day, who has been turning his employees over to the Government relief rolls in order to preserve his company’s undistributed reserves, tell you, using his stockholders’ money to pay the postage for his personal opinions, that a wage of $11 a week is going to have a disastrous effect on all American industry [2].”

The Fair Labor Standards Act was promoted by Secretary of Labor Frances Perkins, the National Child Labor Committee, and Sidney Hillman – a union leader who had for many years advocated “national action on unemployment insurance, low-cost housing, public works, the five-day week and minimum wages”. Workers, unions and reformers across the country had long been demanding an end to abusive conditions, which included long hours, low wages, unsafe workplaces, and child labor “in mines, glass factories, textiles, agriculture, canneries, home industries, and as newsboys, messengers, bootblacks, and peddlers” [3]. State and federal labor laws passed during the Progressive Era had not proved sufficient to stop these abuses.

The Fair Labor Standards Act created a Wage and Hour Division within the U.S. Department of Labor to carry out the provisions of the law. Elmer F. Andrews was the first administrator (1938-1939), followed by Philip B. Fleming (1939-c.1942). Between October 24, 1938 and June 30, 1940, the Division received 43,715 complaints against businesses for violation of the Act. Nearly three-quarters of these complaints came from employees, and the remainder from unions, trade associations, other businesses, and anonymous individuals. Few cases required litigation or criminal proceedings, and these frequently ended with fines or consent decrees in which the employer agreed to pay back wages and obey the law [4]. The Wage and Hour Division still operates today, enforcing the “Federal minimum wage, overtime pay, recordkeeping, and child labor requirements of the Fair Labor Standards Act,” as well as other labor laws, such as the Family and Medical Leave Act [5].

The Fair Labor Standards Act is one of the New Deal’s shining achievements. Some business leaders did, of course, “howl”, as Roosevelt warned in his Fireside Chat. But the law survived a constitutional challenge in 1941 [6] and helped dramatically improve the working conditions and average standard of living of Americans in the postwar era. The Minimum Wage increased through the 1960s, but languished thereafter, falling in real terms (adjusted for inflation) by almost half by the year 2000. It was raised again in 2007 but remains effectively lower than during most of its history, which is why there has been a nationwide movement in recent years to raise state and local minimum and “living wage” levels to $10-15 per hour [7].

Sources: (1) See, e.g., Ross Eisenbrey and Nathaniel Ruby, “Celebrating 75 Years of the Fair Labor Standards Act,” Economic Policy Institute, June 25, 2013, http://www.epi.org/blog/celebrating-75-years-fair-labor-standards/, accessed August 12, 2015. (2) “Fireside Chat, June 24, 1938,” American Presidency Project, University of California – Santa Barbara, http://www.presidency.ucsb.edu/ws/?pid=15662, accessed August 12, 2015. (3) Howard D. Samuel, “Troubled passage: the labor movement and the Fair Labor Standards Act,” Monthly Labor Review, December 2000, pp. 33-35, http://www.bls.gov/opub/mlr/2000/12/art3full.pdf, accessed August 12, 2015; “About Us,” National Child Labor Committee, http://www.nationalchildlabor.org/history.html, accessed August 12, 2015; “Child Labor in U.S. History,” Child Labor Public Education Project, sponsored by the University of Iowa Labor Center and The University of Iowa Center for Human Rights’ Child Labor Research Initiative, http://www.continuetolearn.uiowa.edu/laborctr/child_labor/about/us_history.html, accessed August 12, 2015. (4) “Annual Report, Wage and Hour Division, For the Fiscal Year Ended June 30, 1940,” Washington, DC: U.S. Government Printing Office, 1941, pp. 91-96; “Twenty-Seventh Annual Report of the Secretary of Labor,” Washington, DC: U.S. Government Printing Office, 1939, pp. 203-206 (both reports are available at http://www.hathitrust.org/). (5) “Wage and Hour Division Mission Statement,” Wage and Hour Division, U.S. Department of Labor, http://www.dol.gov/whd/about/mission/whdmiss.htm, accessed August 12, 2015. (6) See, “United States v. Darby,” Oyez, http://www.oyez.org/cases/1940-1949/1940/1940_82, accessed August 12, 2015. (7) For a graph of the federal minimum wage, see http://www.worldalmanac.com/blog/2007/06/not_yet_3.html, accessed August 13, 2015.