Fair Labor Standards Act Summary

  • Last updated on November 10, 2022

The federal Fair Labor Standards Act, passed during the Great Depression, stipulated minimum wages and maximum hours of work for employees of firms engaged in interstate commerce in the United States.

Summary of Event

Enacted into federal law on June 25, 1938, the Fair Labor Standards Act (FLSA) was part of a package of reform legislation characterizing the so-called Second New Deal Second New Deal of President Franklin D. Roosevelt that began with his landslide reelection in 1936. It applied to all businesses that were engaged in or that affected interstate commerce. Article I, section 8 of the U.S. Constitution, the “commerce clause,” provided the legal grounds granting federal jurisdiction to effectuate the act. Because the U.S. Supreme Court had begun giving broad construction to what was meant by interstate commerce (as it did in decisions regarding the Wagner Act, for example), the Roosevelt administration believed it would have wide latitude in applying the act. [kw]Fair Labor Standards Act (June 25, 1938) [kw]Labor Standards Act, Fair (June 25, 1938) [kw]Act, Fair Labor Standards (June 25, 1938) Fair Labor Standards Act (1938) Labor law;minimum wage Minimum wage legislation Labor law;maximum hours [g]United States;June 25, 1938: Fair Labor Standards Act[09790] [c]Laws, acts, and legal history;June 25, 1938: Fair Labor Standards Act[09790] [c]Business and labor;June 25, 1938: Fair Labor Standards Act[09790] [c]Social issues and reform;June 25, 1938: Fair Labor Standards Act[09790] Roosevelt, Franklin D. [p]Roosevelt, Franklin D.;Fair Labor Standards Act Perkins, Frances Stone, Harlan Fiske Green, William Walsh, Thomas J. Black, Hugo L.

The Fair Labor Standards Act placed a floor under wages and a ceiling over hours for those workers covered by the law. Initially, it established a minimum wage of forty cents an hour, with provisions for subsequent increases, and mandated a maximum forty-hour workweek. To smooth the act’s implementation, the provisions for both wages and hours were to be phased into effect over eight years. The act also placed national authority behind the abolition of child labor. The labor of children under sixteen years of age was forbidden, and persons under eighteen years of age were prohibited from working in hazardous occupations, including mining. In the act’s original form, however, workers in a number of occupations were exempted from coverage, notably farm laborers, professional workers, and domestic servants, although these exemptions would be altered in time. The original bill before Congress envisaged a special board to administer the law. In subsequent years, however, oversight of the act fell to the Department of Labor’s Employment Standards Administration.

President Roosevelt had given little thought to placing his political prestige behind a wages and hours bill until 1937. In efforts to combat the Depression, the National Industrial Recovery Act National Industrial Recovery Act (1933) of 1933 (NIRA), sponsored by Roosevelt during his “First New Deal,” sought to increase purchasing power by establishing minimum wages among the NIRA’s participating businesses and industries. Along with several other major pieces of early New Deal legislation, however, the NIRA was declared unconstitutional by the Supreme Court in 1935.

By 1935, however, prolabor legislation and support for the incomes of disadvantaged groups were popular in Congress. The Guffey Coal Act of 1935 Guffey Coal Act (1935) and the Merchant Marine Act of 1936, Merchant Marine Act (1936) for example, each contained provisions to limit hours and raise wages. The institution of Social Security in 1935 was still another attempt to raise the incomes of disadvantaged groups. The National Labor Relations Act National Labor Relations Act (1935) (Wagner Act) of 1935 Wagner Act (1935) threw federal protection around union organization and collective bargaining. The principles of a wages and hours bill were further vindicated in 1936 with congressional passage of the Walsh-Healy Act. Walsh-Healy Act (1936)[Walsh Healy Act] Guided through Congress chiefly by Montana’s Democratic senator Thomas J. Walsh, long an enemy of child labor, the act mandated that a prevailing minimum wage, as determined by the secretary of labor, was to be paid to workers on all jobs performed under federal contracts worth more than ten thousand dollars. Work hours were limited to eight per day, and the labor of boys under the age of sixteen and girls under the age of eighteen was prohibited.

Even with these enactments in the mid-1930’s, the United States continued to differ from other advanced economies in regard to promulgating national standards for wages and hours. The American version of laissez-faire economics was deeply rooted in an endemic individualism coupled with a widespread fear of peacetime government intervention. Consequently, the Roosevelt administration faced serious difficulties in persuading Congress to pass the Fair Labor Standards Act.

These difficulties were compounded by Roosevelt’s shift into a spirited campaign of reform following his 1936 reelection. The president was eager to defuse his growing popular opposition and restore the essence of several key programs of his first administration that had been held to be unconstitutional by the Supreme Court. He was also faced with a secondary economic depression that threatened to be as deep as the one he had inherited in 1933.

After initial rebuffs by Congress, the bill that became the Fair Labor Standards Act was introduced to the special congressional session called by Roosevelt in November, 1937. The bill was backed by the president’s message to the nation that a self-respecting democracy “can plead no justification for . . . child labor, no economic reason for chiseling workers’ wages or stretching workers’ hours.” Hugo L. Black, then a senator from Alabama and later a Supreme Court justice, had sponsored an earlier wages and hours bill. He chaired the joint congressional committees charged with conducting hearings on the bill. Backing his effort were socially conscious Progressives such as Secretary of Labor Frances Perkins, Leon Henderson, and White House aides Thomas Corcoran and Benjamin Cohen.

Opposition to the bill was intense. Critics branded the measure fascist, and the Chamber of Commerce and the National Association of Manufacturers National Association of Manufacturers (NAM) denounced the bill on both economic and constitutional grounds. Reflecting southern textile and lumber interests, congressmen from the South fought bitterly against prospective federal interference in or regulation of their industries. Nor was organized labor of one mind. The American Federation of Labor American Federation of Labor (AFL) and its president, William Green, seeking important changes in the bill, temporarily joined the NAM in opposition; the Congress of Industrial Organizations Congress of Industrial Organizations (CIO), under John L. Lewis, was split on the measure. A Gallup Poll indicated that most Americans, from the North and the South, favored the bill, as did many northern industries that competed with the low-wage, long-hour employment of southern workers. Amid such divisions, many of the bill’s original features were dropped or amended. On June 13, 1938, the House passed the bill by a vote of 291 to 97. The Senate accepted it without a recorded vote. Roosevelt signed the FLSA on June 25, and it became effective on October 24.

Significance

The FLSA reflected many debilitating and limiting congressional compromises, although over subsequent years amendments would remedy a number of these deficiencies. Leading economists in 1938 reckoned that in its original form the act covered fewer than eleven million workers, less than 25 percent of the employed labor force. Administration officials estimated that when the act took effect, nearly 300,000 workers covered by it were earning less than twenty-five cents an hour and 1.3 million workers normally labored more than forty-four hours a week. The national standard of a forty-hour workweek did not arrive until 1940.

The long battle to abolish child labor was also far from over. Entry into employment was restricted to those aged sixteen and over, and the act’s administrators could raise that age to eighteen for work in hazardous or unhealthy industries. Administrators could lower the age of employment to fourteen, however, in industries other than manufacturing and mining in some cases. In addition, the act’s coverage did not extend to agriculture, personal services, street trades, or retailing, which collectively were the largest employers of children.

The act proved to be the last of the Second New Deal’s major reform measures. It was also a popular law. A 1939 Gallup Poll showed that 71 percent of the country favored it, and it therefore came as a political blessing to an embattled President Roosevelt. The president’s own view of the measure was that it constituted “the most far-reaching and the most far-sighted program for the benefit of the workers ever adopted.”

One purpose of the law was to secure better terms of employment for workers than they could secure acting alone. It undoubtedly raised wages for the lowest-paid employees, particularly in the South. These included workers in sawmills, canneries, cigar factories, and textile mills. Depending on the degree of enforcement of the act, which generally was low, it shortened the hours of work where abuses were greatest. Its general effects varied widely, from very positive to negative, depending on a variety of factors including product prices, the extent of unionization and collective bargaining, and the state of the economy. Unions eventually applauded it because it curtailed competition from underpaid workers. The act also excluded from legal employment many people who wished to work, by putting their wages above what employers were willing to pay.

The last word on the act was that of the Supreme Court. Supreme Court, U.S.;labor law Until 1937, the Court had almost systematically eviscerated major New Deal programs. This had led President Roosevelt to launch an attempt to pack the Court with his own appointees—a legal, if unpopular, method of changing the Court’s conservative complexion by appointing additional justices. Politically, this unfolded as a battle that Roosevelt lost but a war—as a result of events beyond his control—that he won. Amid the controversy, five incumbent justices either died or retired before the constitutionality of the FLSA came before the Court in 1941, and Roosevelt had appointed five new, ostensibly liberal, justices to replace them. As a consequence, when redrafted, several major New Deal programs that earlier had been killed by the Court passed the test of constitutionality before the substantially reconstituted Court. Labor observers thought it a foregone conclusion that the FLSA would find Supreme Court approval, but at the time, the Roosevelt administration was not overly optimistic.

The test of the Fair Labor Standards Act came before the Supreme Court as United States v. Darby Lumber Company in 1941. United States v. Darby Lumber Company (1941) The Darby Lumber Company bought timber, transported it to its mill, and manufactured it into finished lumber entirely within the state of Georgia. The finished lumber, however, was thereafter shipped out of state, thereby entering interstate commerce. By FLSA criteria, Darby’s employees, who earned less than twenty-five cents per hour and who worked more than forty-four hours per week, were underpaid and overworked. Moreover, the company kept no records, as the Labor Department discovered when it tried to bring Darby into compliance with the FLSA. Darby’s rejoinder was that the FLSA was unconstitutional insofar as it sought to regulate manufacturing taking place entirely inside Georgia. A Georgia district court agreed with this reasoning. On appeal, the case went before the U.S. Supreme Court.

At the request of Chief Justice Charles Evans Hughes, Associate Justice Harlan Fiske Stone wrote the Court’s opinion, principally because Hughes deemed it to be a “great” case and because it involved issues that long had concerned Stone. In his opinion, Stone sought first to reassert the absolute nature of congressional power over interstate commerce. In effect, this was designed to return the Court to the sweeping mandate it received from Chief Justice John Marshall in Gibbons v. Ogden in 1824, a position that had been eroded by Supreme Court decisions such as Hammer v. Dagenhart in 1918 that separated actual manufacturing activities from the stream of interstate commerce. Stone declared that congressional authority over interstate commerce, on the contrary, was “complete in itself . . . and acknowledges no limitations other than are prescribed by the Constitution.” That power, he argued, was not susceptible to modification by states. He granted that although manufacturing was not commerce, the shipment of manufactured goods outside a state was commerce and thus fell under national authority.

In order to restore federal power over the regulation of child labor, Stone made his second assertion, namely, that congressional power to regulate child labor was “plenary.” Such power was not limited to child labor in hazardous or unhealthy occupations. On both points and contrary to Darby’s plea, the Supreme Court was unanimous. The Fair Labor Standards Act survived its constitutional test and gained additional strength from Stone’s reaffirmation of Congress’s complete authority over interstate commerce. Fair Labor Standards Act (1938) Labor law;minimum wage Minimum wage legislation Labor law;maximum hours

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Babson, Steve. The Unfinished Struggle: Turning Points in American Labor, 1877-Present. Lanham, Md.: Rowman & Littlefield, 1999. Concise and comprehensive history of the American labor movement. Includes notes and index.
  • citation-type="booksimple"

    xlink:type="simple">Bernstein, Irving. A Caring Society: The New Deal, the Worker, and the Great Depression. Boston: Houghton Mifflin, 1985. Examination of the New Deal by a leading labor historian maintains a critical balance despite a clear pro-New Deal bias. Chapter 5 presents an informative narrative history of the adoption of the FLSA.
  • citation-type="booksimple"

    xlink:type="simple">Card, David, and Alan B. Krueger. Myth and Measurement: The New Economics of the Minimum Wage. Princeton, N.J.: Princeton University Press, 1995. Controversial study reports on data from interviews that suggest that increases in the minimum wage do not decrease employment. Includes references and index.
  • citation-type="booksimple"

    xlink:type="simple">Douglas, Paul H., and Joseph Hackman. “The Fair Labor Standards Act of 1938 I.” Political Science Quarterly 53 (December, 1938): 491-515.
  • citation-type="booksimple"

    xlink:type="simple">_______. “The Fair Labor Standards Act of 1938 II.” Political Science Quarterly 54 (March, 1939): 29-55. Two concise articles by a distinguished economist and a labor expert assess the immediate impact of the FLSA on the American workforce. Very informative.
  • citation-type="booksimple"

    xlink:type="simple">Felt, Jeremy P. “The Child Labor Provision of the Fair Labor Standards Act.” Labor History 11 (Fall, 1970): 477-481. Clear and concise scholarly assessment of the subject examines three decades of the FLSA’s child labor provisions at work.
  • citation-type="booksimple"

    xlink:type="simple">Levin-Waldman, Oren M. The Case of the Minimum Wage: Competing Policy Models. Albany: State University of New York Press, 2001. Discusses the evolution of minimum wage policy and law in the United States, focusing on how the nature of arguments concerning a minimum wage has changed over time. Includes tables and figures, bibliography, and index.
  • citation-type="booksimple"

    xlink:type="simple">Levitan, Sar A., and Richard S. Belous. More than Subsistence: Minimum Wages for the Working Poor. Baltimore: The Johns Hopkins University Press, 1979. Brief, clearly written work presents narrative, analysis, and advocacy concerning the minimum wage.
  • citation-type="booksimple"

    xlink:type="simple">Nordlund, Willis J. The Quest for a Living Wage: The History of the Federal Minimum Wage Program. Westport, Conn.: Greenwood Press, 1997. Traces the process through which the U.S. government attempted to develop a fair method of ensuring that workers receive a living wage. Gives an overview of the first fifty years of the operation of the FLSA. Includes tables and figures, bibliography, and index.
  • citation-type="booksimple"

    xlink:type="simple">Rauch, Basil. The History of the New Deal. New York: Capricorn Books, 1963. Fine summary of the New Deal by an important historian presents discussion of the work of Roosevelt’s “Brain Trust” in writing and fighting for the president’s legislation. Addresses the FLSA as part of a complex political picture in chapter 13.
  • citation-type="booksimple"

    xlink:type="simple">Wilcox, Clair. Public Policies Toward Business. 3d ed. Homewood, Ill.: Richard D. Irwin, 1966. Excellent and authoritative work provides an overview of expanding government controls over American economic and social life. Chapter 32 deals with the FLSA in the context of previous domestic and foreign legislation on wages and hours.

Children’s Bureau Is Founded

Massachusetts Adopts the First Minimum Wage Law in the United States

U.S. Supreme Court Rules Against Minimum Wage Laws

Great Depression

Supreme Court-Packing Fight

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