Fair Labor Standards Under Attack

"The proposal is unworkable, un-American, impractical and dangerous to our institutions," said Representative Wade Kitchens, a Democrat from Arkansas, during the Congressional debate over the Fair Labor Standards Act. What were these radical ideas, guaranteed by the last great piece of New Deal legislation, that in Kitchens's view threatened the future of the Republic? A minimum wage, limits on overtime and a prohibition of child labor. In submitting the act to Congress on May 24, 1937, President Franklin Roosevelt succinctly explained its basic goal: "a fair day's pay for a fair day's work."

It's good to keep in mind some of the labor conditions in the United States before passage of the Fair Labor Standards Act. Workers were often forced to work ten to twelve hours a day, six days a week. They earned as little as twelve cents an hour. They were sometimes paid in scrip, redeemable at a company store, instead of money. A survey of American children conducted by the Labor Department found that one-quarter worked for sixty or more hours a week. The median wage for children was $4 a week. All of this was justified in the name of "freedom," as business groups championed the liberty of contracts and the liberty of employers to hire, fire and set wages without any restrictions. The Supreme Court had consistently upheld that notion of freedom, overturning a federal child labor law in 1922 and a local minimum wage law the following year.

The Court abruptly switched course in March 1937--amid Roosevelt's effort to pack it with sympathetic Justices--and affirmed the right of Washington State to require minimum wages for women and minors. Chief Justice Charles Evans Hughes argued that "the denial of a living wage" not only harmed workers but placed an unfair burden upon society. "What these workers lose in wages the taxpayers are called upon to pay," Hughes noted in his majority opinion. "The community is not bound to provide what is in effect a subsidy for unconscionable employers."

Two months later Roosevelt sent the Fair Labor Standards Act to Congress, launching one of the most bitter legislative battles of the New Deal. Despite overwhelming popular support, Southern Democrats joined forces with Republicans to oppose the act, forming a coalition that would thwart future New Deal legislation. Their spirited defense of low wages and the liberty of employers delayed passage of the bill for more than a year. The Fair Labor Standards Act of 1938, signed by Roosevelt that June, was a watered-down version of the original. It provided exemptions for agriculture and other industries, as well as a minimum wage of just 25 cents an hour. Nonetheless, it established fundamental economic rights for American workers.

Seventy years later, the Fair Labor Standards Act is still under attack. "A higher minimum wage equals less economic freedom," a Heritage Foundation essay claimed last year. Although the rhetoric is more subdued, the underlying attitude has changed little since Representative Kitchens railed against the bill. The minimum wage doesn't eliminate poverty; it creates poverty, we are told. When do-gooders demand a higher wage, poor workers lose their jobs. Countless studies are cited as proof. Yet the period of America's greatest economic growth coincided with its highest minimum wage rates. In 1956 the minimum wage in today's dollars was about $7.93 an hour. Adjusted for inflation, the minimum wage reached its peak in 1968, at about $9.91 an hour. During the decades that followed, its real value declined by almost 50 percent. That enormous pay cut for the nation's poorest workers benefited some industries enormously--supplying cheap labor to fast food restaurants, retail stores and farms--while imposing enormous costs on society. When the federal minimum wage hits $7.25 in July 2009, it will still not reach the level considered adequate by President Dwight Eisenhower.