England and the United States both have had their own unique developments of how minimum wage laws came into being.
England
If you look at the history of England, you’ll find that for the longest time, there was a price ceiling on how high you could pay workers, and there would be fines and penalties for employers who were paying above that amount. This was called the Statute of Laborers, passed in 1351 under England’s King Edward III. As time went on, there became a need to set a formal minimum wage amount. In 1604, under England’s King James I, they passed the Act Fixing a Minimum Wage.
In the 1800’s, though, things started to change. England became increasingly capitalistic. Many businesses were starting to produce things, and sell those things. A larger market economy was being born. In fact, many believed that the best approach was a laissez-faire free-market setup where market supply and demand would determine prices of labor, and having labor prices, either low or high limits to labor costs, would only hinder the flourishing of the open market. So, many people, particularly business owners, became increasingly opposed to having upper or lower limits on wages for workers.
There’s another element at play here. Trade unions started to come about in the nineteenth century as well, which meant that there tended to be collective agreements between businesses and their workers, through their trade unions, that controlled wages to their employees. This way of setting wages sounds about right to those of you who support unions, and the collective bargaining that can take place by unions to improve their members’ wages. The problem, though, is that this approach meant that there was not a uniform minimum wage, because that wasn’t possible under these kinds of conditions.
The United States
You’ll find that political and social activists started advocating for minimum wage laws beginning in the late 1800’s, and organizations such as the National Consumer League were formed, in response to the harsh working conditions and low wages in sweat shops. Massachusetts passed the first minimum wage legislation in the United States on June 4, 1912, and by 1923, fifteen US states, and the District of Columbia, had passed their own minimum wage laws, only to have those laws get struck down by the US Supreme Court. For example, in that same year of 1923, a U.S. Supreme Court decision, Adkins v. Children’s Hospital, struck down minimum wage legislation for women based on the idea that it was an infringement of their freedom to negotiate their own wage contracts with their employers, based on the idea that this freedom infringed on their Fifth Amendment rights as found in the due process clause.
In fact, US President Franklin D. Roosevelt, during the Great Depression, attempted to create a federal minimum wage in the early days of his New Deal programs, with his National Industrial Recovery Act, only to have it struck down by the same US Supreme Court, too, in Schechter Poultry Corp. v. United States (1935). Finally, in 1937, after Roosevelt “packed the court” with several more judges, all of which supported his politics and causes, the US Supreme Court took up the issue again, and this time, with many more judges on his side, upheld the constitutionality of Washington state’s minimum wage law, and so, with that in mind, Roosevelt came back in 1938, passing the Fair Labor Standards Act, which set the national minimum wage at the time at 25 cents per hour.
Today
Over the years, the minimum wage amount has increased so that by 2019 the federal minimum wage amount was set at $7.25 per hour, although many states, 29 by January of 2020, had state minimum wages higher than the national standard. And some cities and municipalities have imposed minimum wages that are even higher than their state’s minimum wage standard.
That’s the story of how minimum wage laws came into being in both England and the United States.
