History of the minimum wage facts for kids
The minimum wage is the lowest amount of money an employer can legally pay their workers for an hour or a day of work. Governments introduce minimum wage laws to make sure people earn enough to live on and are not paid unfairly. This idea has a long history, with different countries trying out various ways to set these basic pay rates.
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New Zealand: First in the World
New Zealand was one of the first countries to create national minimum wage laws. This happened in 1894 with a law called the Industrial Conciliation and Arbitration Act. Instead of just setting wages, this law created special boards. These boards helped solve disagreements between workers and employers about pay.
Australia: Setting Basic Wages
In 1896, the state of Victoria in Australia started using "wages boards." These boards did not set a minimum wage for everyone. Instead, they set basic pay for six industries where workers were paid very little.
This idea was first a four-year test. But it worked well and became a permanent system by 1904. By then, it covered 150 different types of jobs. Other Australian states, like New South Wales and Western Australia, also started using wages boards by 1902.
In 1907, a famous decision called the Harvester decision was made in Australia. It set a "living wage." This was meant to be enough money for a man, his wife, and three children to live comfortably.
Later, in 2005, the Australian Fair Pay Commission was created. Its job was to set the national minimum wage. This commission was replaced by Fair Work Australia in 2010.
United Kingdom: Protecting Low-Paid Workers
The idea of a minimum wage was very important in the United Kingdom from 1909 to the 1930s. After studying how minimum wage laws worked in Australia and New Zealand, the Liberal Party decided to act.
In 1909, Winston Churchill introduced the Trade Boards Act. This law created special boards that set minimum wages. These wages were legally binding. The law first applied to four industries known for very low pay. About 70% of the 200,000 workers in these jobs were women.
More industries were added later, including coal mining in 1912. By 1913, five more wage boards were set up. These covered an extra 140,000 workers. In 1917, "Whitley councils" were formed. These councils brought together unions and managers to talk about wages, working conditions, and other important issues.
From 1909, politicians like Lloyd George also pushed for a minimum wage for farm workers. This was difficult because landowners did not want it. But by 1924, they succeeded. This helped many farm worker families.
By the 1920s, some people thought that "Family Allowance" (now called "Child Benefit") was a better idea. This money was given to low-income families to help them. This way, poverty could be reduced without changing the job market too much. In 1945, family allowances were introduced, and the focus on minimum wages faded.
However, in the 1970s, people started talking about minimum wages again. Finally, in 1998, the National Minimum Wage Act 1998 was passed. It set a minimum wage of £3.60 per hour. Younger workers had slightly lower rates. This law mostly helped workers in fast food restaurants and other service jobs.
United States: A National Standard
In 1912, the state of Massachusetts in the United States set minimum wages for women and children. Other states also passed similar laws to protect workers. These early laws often only allowed officials to investigate pay and suggest changes.
It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country.
The first national minimum wage in the United States was introduced in 1938 by President Franklin D. Roosevelt.
Most states in the United States also have their own minimum wage laws. Some states, like Alabama and Mississippi, do not have their own state minimum wage. Twenty-nine states have a minimum wage that is higher than the national federal minimum wage.
Latin America: Early Efforts
In 1930, Getúlio Vargas set up a minimum wage in Brazil. This was part of new work laws for the country.
In the 1960s, minimum wage laws were also brought into Latin America. This was part of a program called the Alliance for Progress. However, these minimum wages were, and still are, quite low.
European Union: Different Approaches
In the European Union, 21 member countries currently have national minimum wages. But some countries, like Norway, Sweden, Finland, and Denmark, do not have specific minimum wage laws. Instead, they rely on groups of employers and trade unions to agree on minimum pay through talks called collective bargaining.
In July 2014, Germany started making a law for a national minimum wage. This law came into effect on January 1, 2015. The minimum wage in Germany was set at €8.50 per hour.
A French law passed in 2015 also set minimum wage rules for foreign truck drivers. This applied to drivers traveling to and from France.
The European Commission later questioned these laws in France and Germany. They argued that these rules made it harder for businesses to offer services and move goods freely across Europe. These are two main freedoms in the European Union.
Switzerland: A High Proposal
In May 2014, Switzerland had a vote about setting a very high minimum wage. The proposal was to set it at 22 Swiss francs (about $25) per hour. This would have been the highest minimum wage in the world. However, the people of Switzerland voted against this proposal.
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