When Was The First Federal Minimum Wage Created In The US And How Much Was It Per Hour?

One of the most pivotal moments came in 1938 when the U.S. government implemented the first federal minimum wage through the Fair Labor Standards Act (FLSA). This article will explore the history of this legislation, its impact on workers and the economy, and how it has evolved over time.

What Is the Federal Minimum Wage?

The federal minimum wage is the lowest wage that employers in the United States are required to pay their workers, as mandated by the government. It is set by federal law, and while individual states and cities can set their own minimum wages that are higher than the federal rate, employers must comply with the federal minimum at a minimum.

The Birth of the First Federal Minimum Wage

Before the introduction of the federal minimum wage, there was no nationwide standard for wages in the U.S. Workers, particularly in industries like manufacturing and agriculture, often faced exploitative conditions, working long hours for extremely low pay. In response to these challenges, the Fair Labor Standards Act (FLSA) was signed into law by President Franklin D. Roosevelt on June 25, 1938.

The act was a part of Roosevelt’s broader effort to address the economic challenges of the Great Depression and to promote fair labor practices. The minimum wage provision was designed to ensure workers received fair pay for their labor, thereby improving working conditions and reducing exploitation.

How Much Was the First Minimum Wage?

When the Fair Labor Standards Act became law, the federal minimum wage was set at $0.25 per hour. While this figure may seem incredibly low by today’s standards, it represented a significant improvement at the time, offering workers a more stable and standardized wage.

To put this in perspective, in 1938, the average cost of living was much lower than today. For example, the price of a loaf of bread was around $0.09, and the average price of a car was about $700. Despite the low rate, the minimum wage helped many workers secure a more predictable income during a period of great economic uncertainty.

Key Provisions of the Fair Labor Standards Act

Beyond the establishment of the minimum wage, the FLSA also introduced other critical labor protections that are still in place today:

Overtime Pay: The FLSA required that employees working more than 40 hours per week be paid overtime at a rate of 1.5 times their regular pay.
Child Labor Laws: The act restricted the employment of minors in certain industries and set age requirements for workers, aiming to eliminate the exploitation of children in the workforce.
Record-Keeping Requirements: Employers were required to keep detailed records of employee hours worked and wages paid, promoting transparency and accountability.

The Economic and Social Impact

The introduction of the minimum wage had profound implications for workers in the U.S. While the wage was modest by today’s standards, it provided greater financial stability to countless families during a time of economic hardship. It also helped establish the groundwork for future labor protections that would evolve over time, such as increased wage rates and improved working conditions.

However, the 1938 minimum wage also faced significant criticism. Many businesses, particularly in industries such as agriculture and retail, argued that the wage was too high and would lead to increased costs and fewer job opportunities. Some even claimed that it would hurt the economy by driving small businesses out of business. Yet, despite these criticisms, the FLSA and the minimum wage provision remained in place and continued to evolve.

The Evolution of the Minimum Wage

Since 1938, the federal minimum wage has been raised numerous times, with changes reflecting inflation and the growing demands for fairer wages. Over the decades, the wage has gradually increased, and today it stands at $7.25 per hour, as set by the last increase in 2009.

While the federal minimum wage has remained at this level for more than a decade, many states and cities have implemented higher minimum wages to reflect the cost of living in their areas. As of 2025, California’s minimum wage stands at $15.50 per hour, while New York City has a minimum wage of $15 per hour.

The Continuing Debate on Minimum Wage

The debate surrounding the federal minimum wage continues to this day. Advocates argue that the current wage is not sufficient to meet the basic needs of workers, particularly in high-cost areas, while critics claim that raising the minimum wage could harm small businesses and lead to job losses.

Proposals for a $15 per hour minimum wage have gained traction in recent years, with some states and local governments implementing such rates independently of federal law. The ongoing conversation highlights the complexities of balancing fair wages with economic growth and the needs of businesses.

Conclusion

The establishment of the first federal minimum wage in 1938 marked a pivotal moment in U.S. labor history. The Fair Labor Standards Act not only set a wage floor but also introduced key protections for workers, which have influenced labor laws for decades. While the minimum wage has evolved and will likely continue to do so, its introduction during the Great Depression remains a testament to the ongoing struggle for fair wages and better working conditions in the United States.

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