The history of minimum wage is about the attempts and measures governments have made to introduce a standard amount of periodic pay below which employers could not compensate their workers.
New Zealand
New Zealand
New Zealand ( mi, Aotearoa ) is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and over 700 smaller islands. It is the sixth-largest island count ...
enacted the first national
minimum wage law Minimum wage law is the body of law which prohibits employers from hiring employees or workers for less than a given hourly, daily or monthly minimum wage. More than 90% of all countries have some kind of minimum wage legislation.
History
Until r ...
s in 1894 by the ''
Industrial Conciliation and Arbitration Act'', which, unlike the wages board of
Victoria
Victoria most commonly refers to:
* Victoria (Australia), a state of the Commonwealth of Australia
* Victoria, British Columbia, provincial capital of British Columbia, Canada
* Victoria (mythology), Roman goddess of Victory
* Victoria, Seychelle ...
, established arbitration boards to enforce
compulsory arbitration
Compulsion may refer to:
* Compulsive behavior, a psychological condition in which a person does a behavior compulsively, having an overwhelming feeling that they must do so.
* Obsessive–compulsive disorder, a mental disorder characterized by i ...
.
[
]
Australia
In 1896, Victoria
Victoria most commonly refers to:
* Victoria (Australia), a state of the Commonwealth of Australia
* Victoria, British Columbia, provincial capital of British Columbia, Canada
* Victoria (mythology), Roman goddess of Victory
* Victoria, Seychelle ...
, Australia
Australia, officially the Commonwealth of Australia, is a Sovereign state, sovereign country comprising the mainland of the Australia (continent), Australian continent, the island of Tasmania, and numerous List of islands of Australia, sma ...
, amended the ''Factories and Shops Act'' to create a wages board. The wages board did not set a universal minimum wage
A minimum wage is the lowest remuneration that employers can legally pay their employees—the price floor below which employees may not sell their labor. Most countries had introduced minimum wage legislation by the end of the 20th century. Bec ...
; rather it set basic wages for six industries that were considered to pay low wages. First enacted as a four-year experiment, the wages board was renewed in 1900 and made permanent in 1904; by that time it covered 150 different industries.[Waltman, Jerold. "The Politics of the Minimum Wage." University of Illinois Press. 2000]
By 1902, other Australian states, such as New South Wales
)
, nickname =
, image_map = New South Wales in Australia.svg
, map_caption = Location of New South Wales in AustraliaCoordinates:
, subdivision_type = Country
, subdivision_name = Australia
, established_title = Before federation
, es ...
and Western Australia
Western Australia (commonly abbreviated as WA) is a state of Australia occupying the western percent of the land area of Australia excluding external territories. It is bounded by the Indian Ocean to the north and west, the Southern Ocean to th ...
, had also formed wages boards.[
In 1907, the Harvester decision was handed down in Australia. It established a ']living wage
A living wage is defined as the minimum income necessary for a worker to meet their basic needs. This is not the same as a subsistence wage, which refers to a biological minimum, or a solidarity wage, which refers to a minimum wage tracking labor ...
' for a man, his wife, and three children to "live in frugal comfort".
On 14 December 2005, the Australian Fair Pay Commission
The Australian Fair Pay Commission was an Australian statutory body that existed from 2006 to 2009. It was created under the Howard Government's "''WorkChoices''" industrial relations laws in 2006 to set the minimum pay for workers. Established t ...
was established under the Workplace Relations Amendment (WorkChoices
WorkChoices was the name given to changes made to the federal industrial relations laws in Australia by the Howard Government in 2005, being amendments to the ''Workplace Relations Act 1996'' by the ''Workplace Relations Amendment (Work Choices ...
) Act 2005. The responsibility of the commission includes the setting of the standard federal minimum wage, replacing the role of the Australian Industrial Relations Commission
The Australian Industrial Relations Commission (AIRC), known from 1956 to 1973 as the Commonwealth Conciliation and Arbitration Commission and from 1973 to 1988 as the Australian Conciliation and Arbitration Commission, was a tribunal with powers ...
that took submissions from a variety of sources to determine appropriate minimum wages.
The Australian Fair Pay Commission was replaced by Fair Work Australia
The Fair Work Commission (FWC), until 2013 known as Fair Work Australia (FWA), is the Australian industrial relations tribunal created by the ''Fair Work Act 2009'' as part of the Rudd Government's reforms to industrial relations in Australia ...
in 2010.
United Kingdom
The minimum wage was a major factor in British industrial relations from 1909 until the 1930s.
After a study of the minimum wage laws in Australia and New Zealand The Liberal Party
The Liberal Party is any of many political parties around the world. The meaning of ''liberal'' varies around the world, ranging from liberal conservatism on the right to social liberalism on the left.
__TOC__ Active liberal parties
This is a li ...
acted to set up a minimum wage in the most heavily sweated or underpaid industries, as part of a broad range of social reforms. Winston Churchill
Sir Winston Leonard Spencer Churchill (30 November 187424 January 1965) was a British statesman, soldier, and writer who served as Prime Minister of the United Kingdom twice, from 1940 to 1945 Winston Churchill in the Second World War, dur ...
, president of the Board of Trade, introduced the Trade Boards Act in 1909. It created boards that set minimum wage criteria that were legally enforceable. The main provision was to set minimum wages in certain trades with the history of low wages, because of surplus of available workers, the presence of women workers, or the lack of skills. At first it applied to four industries: chain-making, ready-made dresses, paper-box making, and the machine-made lace and finishing trade. About 70 per cent of their 200,000 workers were women.
Coal mining was added in 1912, after a major strike. In 1913, five additional wage boards were set up that covered hollow ware making, shirt making, sugar confectionery and food preserving, tin box making, and linen and cotton embroidery, along with a portion of the laundry industry. These extensions led to an additional 140,000 being covered by minimum wage legislation. Unions pushed for the 1918 Act to greatly extend the coverage of minimum wages In 1917, Whitley councils or Joint Industrial Council A joint industrial council (JIC) or national joint industrial council (NJIC), known as a Whitley council in some fields, especially white-collar and government, is a statutory council of employers and trade unions established in the United Kingdom ...
s were established in 41 industries with over 2 million employees to bring together unions and management to discuss not only wages and conditions but also a wide range of related issues such as jobs, security, benefits and technical education.
Starting in 1909, Liberals, led especially by Lloyd George, promoted the idea of a minimum wage for farm workers. Resistance of landowners was strong, but success was achieved by 1924. According to Robin Gowers and Timothy J. Hatton, the impact In England and Wales was significant. They estimate that it raised wages for farm labourers by 15 per cent by 1929, and by more than 20 per cent in the 1930s. It reduced the employment of such labourers by 54,000 (6.5 per cent) in 1929 and 97,000 (13.3 per cent) in 1937. They argue, "The minimum wage lifted out of poverty many families of farm labourers who remained employed, but it significantly lowered the incomes of farmers, particularly during the 1930s."
By the 1920s, a new perspective was offered by reformers to emphasize the usefulness of family allowance
Child benefit or children's allowance is a social security payment which is distributed to the parents or guardians of children, teenagers and in some cases, young adults. A number of countries operate different versions of the program. In most cou ...
targeted at low-income families was the best way to relieve poverty without distorting the labour market. The trade unions and the Labour Party adopted this view. In 1945, family allowances were introduced; minimum wages faded from view. Talk resumed in the 1970s, with an agricultural minimum wage remaining, but in the 1980s the Thatcher administration made it clear it would not accept a national minimum wage. Finally, with the return of Labour, the National Minimum Wage Act 1998
The National Minimum Wage Act 1998 creates a minimum wage across the United Kingdom.. E McGaughey, ''A Casebook on Labour Law'' (Hart 2019) ch 6(1) From 1 April 2022 this was £9.50 for people age 23 and over, £9.18 for 21- to 22-year-olds, £6. ...
set a minimum of £3.60 per hour, with lower rates for younger workers. It largely affected workers in high turnover service industries such as fast food restaurants, and members of ethnic minorities.
United States
In 1912, the state of , United States, set minimum wages for women and children, and some states enacted similar protective laws
Protective laws were enacted to protect women from certain hazards or difficulties of paid work. These laws had the effect of reducing the employment available to women, saving it for men. These were enacted in many jurisdictions in the United S ...
. Under the Massachusetts laws, there was "the power only to investigate conditions and recommend changes".
In the United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
, statutory minimum wages were first introduced nationally in 1938 by president Franklin D. Roosevelt.[ ''Note: Date enacted was 1 April 1999'']
In addition to the federal minimum wage, nearly all states within the United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
have their own minimum wage laws with the exception of Alabama
(We dare defend our rights)
, anthem = "Alabama (state song), Alabama"
, image_map = Alabama in United States.svg
, seat = Montgomery, Alabama, Montgomery
, LargestCity = Huntsville, Alabama, Huntsville
, LargestCounty = Baldwin County, Al ...
, Louisiana
Louisiana , group=pronunciation (French: ''La Louisiane'') is a state in the Deep South and South Central regions of the United States. It is the 20th-smallest by area and the 25th most populous of the 50 U.S. states. Louisiana is borde ...
, Mississippi
Mississippi () is a state in the Southeastern region of the United States, bordered to the north by Tennessee; to the east by Alabama; to the south by the Gulf of Mexico; to the southwest by Louisiana; and to the northwest by Arkansas. Miss ...
, South Carolina
)''Animis opibusque parati'' ( for, , Latin, Prepared in mind and resources, links=no)
, anthem = " Carolina";" South Carolina On My Mind"
, Former = Province of South Carolina
, seat = Columbia
, LargestCity = Charleston
, LargestMetro = ...
, and Tennessee
Tennessee ( , ), officially the State of Tennessee, is a landlocked state in the Southeastern region of the United States. Tennessee is the 36th-largest by area and the 15th-most populous of the 50 states. It is bordered by Kentucky to th ...
. Twenty-nine states have a minimum wage that is higher than the federal minimum wage.
Latin America
In the 1960s, minimum wage laws were introduced into Latin America
Latin America or
* french: Amérique Latine, link=no
* ht, Amerik Latin, link=no
* pt, América Latina, link=no, name=a, sometimes referred to as LatAm is a large cultural region in the Americas where Romance languages — languages derived f ...
as part of the Alliance for Progress
The Alliance for Progress ( es, Alianza para el Progreso, links=no), initiated by U.S. President John F. Kennedy on March 13, 1961, ostensibly aimed to establish economic cooperation between the U.S. and Latin America. Governor Luis Muñoz Marín ...
; however these minimum wages were, and are, low.[ p. 342.]
European Union developments
In the European Union
The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been des ...
, 21 member states currently have national minimum wages.Eurostat
Eurostat ('European Statistical Office'; DG ESTAT) is a Directorate-General of the European Commission located in the Kirchberg, Luxembourg, Kirchberg quarter of Luxembourg City, Luxembourg. Eurostat's main responsibilities are to provide statis ...
(2006): ''Minimum Wages 2006 - Variations from 82 to 1503 euro gross per month
(PDF)
Many countries, such as Norway
Norway, officially the Kingdom of Norway, is a Nordic country in Northern Europe, the mainland territory of which comprises the western and northernmost portion of the Scandinavian Peninsula. The remote Arctic island of Jan Mayen and t ...
, Sweden
Sweden, formally the Kingdom of Sweden,The United Nations Group of Experts on Geographical Names states that the country's formal name is the Kingdom of SwedenUNGEGN World Geographical Names, Sweden./ref> is a Nordic country located on ...
, Finland
Finland ( fi, Suomi ; sv, Finland ), officially the Republic of Finland (; ), is a Nordic country in Northern Europe. It shares land borders with Sweden to the northwest, Norway to the north, and Russia to the east, with the Gulf of B ...
, Denmark
)
, song = ( en, "King Christian stood by the lofty mast")
, song_type = National and royal anthem
, image_map = EU-Denmark.svg
, map_caption =
, subdivision_type = Sovereign state
, subdivision_name = Danish Realm, Kingdom of Denmark
...
, Germany
Germany,, officially the Federal Republic of Germany, is a country in Central Europe. It is the second most populous country in Europe after Russia, and the most populous member state of the European Union. Germany is situated betwe ...
, Austria
Austria, , bar, Östareich officially the Republic of Austria, is a country in the southern part of Central Europe, lying in the Eastern Alps. It is a federation of nine states, one of which is the capital, Vienna, the most populous ...
, Italy
Italy ( it, Italia ), officially the Italian Republic, ) or the Republic of Italy, is a country in Southern Europe. It is located in the middle of the Mediterranean Sea, and its territory largely coincides with the homonymous geographical re ...
, and Cyprus
Cyprus ; tr, Kıbrıs (), officially the Republic of Cyprus,, , lit: Republic of Cyprus is an island country located south of the Anatolian Peninsula in the eastern Mediterranean Sea. Its continental position is disputed; while it is geo ...
have (or had) no minimum wage laws, but rely on employer groups and trade union
A trade union (labor union in American English), often simply referred to as a union, is an organization of workers intent on "maintaining or improving the conditions of their employment", ch. I such as attaining better wages and benefits ( ...
s to set minimum earnings through collective bargaining
Collective bargaining is a process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, benefits, and other aspects of workers' compensation and rights for workers. The i ...
.
In July 2014 Germany
Germany,, officially the Federal Republic of Germany, is a country in Central Europe. It is the second most populous country in Europe after Russia, and the most populous member state of the European Union. Germany is situated betwe ...
began legislating to introduce a federally mandated minimum wage law, the ''Gesetz zur Regelung eines allgemeinen Mindestlohns (Mindestlohngesetz - MiLoG)'' (unofficial translation: "Act Regulating a General Minimum Wage (Minimum Wage Act)"), which came into effect on 1 January 2015. The minimum wage is set at €8.50 per hour. A French law passed in the National Assembly
In politics, a national assembly is either a unicameral legislature, the lower house of a bicameral legislature, or both houses of a bicameral legislature together. In the English language it generally means "an assembly composed of the repre ...
on 17 February 2015 and effective from the end of 2015 imposed statutory minimum wage regulations on foreign truck drivers plying international routes to and from France and undertaking cabotage
Cabotage () is the transport of goods or passengers between two places in the same country. It originally applied to shipping along coastal routes, port to port, but now applies to aviation, railways, and road transport as well.
Cabotage rights ar ...
in the country.
The European Commission
The European Commission (EC) is the executive of the European Union (EU). It operates as a cabinet government, with 27 members of the Commission (informally known as "Commissioners") headed by a President. It includes an administrative body o ...
introduced an infringement procedure
The European Court of Justice (ECJ, french: Cour de Justice européenne), formally just the Court of Justice, is the supreme court of the European Union in matters of European Union law. As a part of the Court of Justice of the European Un ...
against France and Germany on 19 May 2015, arguing that the application of these laws in the transport
Transport (in British English), or transportation (in American English), is the intentional movement of humans, animals, and goods from one location to another. Modes of transport include air, land (rail and road), water, cable, pipeline, an ...
sector had a disproportionately restrictive impact on the freedom to provide services and the free movement of goods, two of the principal freedoms on which the European Union
The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been des ...
is based. On 16 June 2016 the Commission sent a letter of formal notice to the French authorities on this subject and issued a supplementary letter to the German authorities, initiating two months' notice of potential legal action.[European Commission]
Press Release: Transport: Commission takes legal action against the systematic application of the French and German minimum wage legislation to the transport sector
accessed 6 August 2016
Switzerland
In May 2014, Switzerland
). Swiss law does not designate a ''capital'' as such, but the federal parliament and government are installed in Bern, while other federal institutions, such as the federal courts, are in other cities (Bellinzona, Lausanne, Luzern, Neuchâtel ...
was overwhelmingly defeated in a referendum
A referendum (plural: referendums or less commonly referenda) is a direct vote by the electorate on a proposal, law, or political issue. This is in contrast to an issue being voted on by a representative. This may result in the adoption of a ...
concerning a proposal to set the minimum wage at 22 Swiss franc
The Swiss franc is the currency and legal tender of Switzerland and Liechtenstein. It is also legal tender in the Italian exclave of Campione d'Italia which is surrounded by Swiss territory. The Swiss National Bank (SNB) issues banknotes and the f ...
s ($25), which would have given the country the world's highest minimum wage.
See also
* Barriers to entry
In theories of competition in economics, a barrier to entry, or an economic barrier to entry, is a fixed cost that must be incurred by a new entrant, regardless of production or sales activities, into a market that incumbents do not have or have ...
* Labour law
Labour laws (also known as labor laws or employment laws) are those that mediate the relationship between workers, employing entities, trade unions, and the government. Collective labour law relates to the tripartite relationship between employee, ...
* Minimum wage
A minimum wage is the lowest remuneration that employers can legally pay their employees—the price floor below which employees may not sell their labor. Most countries had introduced minimum wage legislation by the end of the 20th century. Bec ...
* Training wage
References
{{reflist, 2
External links
Federal Minimum Wage
United States Department of Labor Wage and Hour Division. As of July 24, 2009.
History of the United States' Minimum Wage
Minimum-Wage.org. Retrieved May 17, 2011.
Minimum wage
Minimum wage
A minimum wage is the lowest remuneration that employers can legally pay their employees—the price floor below which employees may not sell their labor. Most countries had introduced minimum wage legislation by the end of the 20th century. Bec ...
Australian labour law
United States labor law
Late modern economic history