FAIR LABOR STANDARDS ACT

Fair Labor Standards Act



Fair Labor Standards Act

Introduction

In the 1930's the United States was in the throws of a great depression. Unemployment had sky rocketed, and many people were left homeless as a result of this depression. Lines miles long wove down streets as people waited to get free meals because they could not find meaningful employment. Those who did find employment were forced to work for miniscule amounts, and many children were forced to find employment to help out their struggling families. A large majority of those children, who did find employment, were forced to work many hours for barely a livable wage.

Fair Labor Standards Act

In 1937, President Franklin Roosevelt declared that "All but the hopeless reactionary will agree that to conserve our primary resources of manpower, government must have some control over maximum hours, minimum wages, the evil of child labor, and the exploitation of unorganized labor." (Alexander, 2004, 10) In 1938 the Fair Labor Standards Act (FLSA) was passed with immense pressure from organized labor as a primary means to conserve that "primary resource of manpower", but instead drove out hundreds of thousands of workers in order to force higher wages for other people. Though the unemployment rate around that time was 18%, the Federal Government decided it wanted to flex its political muscle and drive wages higher. In those times, the FLSA established a twenty-five cents minimum wage, and mandated a 40-hour workweek. Any time spent over 40 hours per week paid out as time and a half.

The original intent of the FLSA was to decrease the advantage that lower paying southern factories had over northern factories. Puerto Rico was devastated as a result of the new law as Economist Benjamin Anderson noted, "unemployment resulted there through the sheer inability of important industries to pay the twenty-five cents an hour." (Alexander, 2004, 12)

Some studies suggest that raising the minimum wage results in many layoffs throughout the country. When Congress raised the minimum wage 46 cents between 1977 and 1981, some estimate that the minimum wage hikes resulted in the loss of 644,000 jobs, including jobs that were not created. (Alexander, 2004, 21) Some estimate that as a result of the minimum wage laws that "Teenage workers have greater job losses, relative to their share of the population or the employed work force, than adults. (Alexander, 2004, 16)

FLSA and Unions

A March 1977 editorial piece from the New York Times chimed that, (Alexander, 2004, 19) Organized labor favors a high minimum wage because that reduces management's resistance to union recruiting. Where cheap alternative sources of labor are eliminated, high-priced union labor no longer looks so bad to a company's managers. The main union players in the birth of the FLSA were the AFL and CIO unions. The AFL was unhappy with the Roosevelt proposal and felt that the bill favored industrial over craft unions, and fought for a substitute bill that call for a 40 cent wage across the board, and a flat 40 hour ...