The US has nearly doubled its minimum wage before

In 1949, President Truman prevailed over critics who said going from 40 cents to 75 cents an hour would be a disaster. It was anything but.

By Jason Notte Aug 29, 2013 7:05AM
People at work in the Hitchcock chair factory on May 1, 1949 (© Martha Holmes/Time Life Pictures/Getty Images)With fast-food and retail workers striking on Thursday and over Labor Day weekend in an effort to raise the federal minimum wage from $7.25 an hour to $15, surely they realize the daunting odds against them.

After all, it's not as if the nation has ever raised the minimum wage by nearly that much, right?


Well, not in a while, but it has happened. As The Huffington Post pointed out with some help from historians, President Harry Truman got the nation's lowest-paid workers an 87.5% raise in 1949 despite a faltering economy and staunch political opposition.


The U.S. had gone into its second deep recession in a four-year span. Congress had refused to raise the minimum wage from its 1938 level in both 1947 and 1948, while the coalition of Southern Democrats and Republicans that controlled both chambers outwardly resisted Truman's extension of Franklin Delano Roosevelt's New Deal, with the so-called Fair Deal.


Regardless, Truman proposed nearly doubling the minimum wage from 40 cents an hour to 75 cents. That would be the equivalent of raising a $5.70 minimum wage today to $10.70.


Considering the absolutely frigid reception President Barack Obama received when he recently suggested raising the minimum wage to $9, Truman's gambit would be a long shot even today.


But he wasn't going to budge on the 75-cent figure, so Truman surrounded his proposed minimum wage hike in other ideas that made it seem downright conservative by comparison. The original White House bill sought industry-specific rates as high as $1 per hour. It wanted to extend minimum wage protections, from one-third of the labor force to nearly a half of all workers.


In a master stroke, Truman included language that would have allowed government agents to sue employers for back wages.


That last bit put all of the suits out of sorts. Big companies including S.C. Johnson, Metropolitan Life Insurance, Standard Oil and General Motors (GM), lobbied against the proposal. The U.S. Chamber of Commerce -- which is still the dummy to corporate ventriloquists -- wailed that both inflation and unemployment would rise if the minimum ent up.


In negotiating with Congress, Truman simply used the other portions of the proposal as leverage. If they'd allow the minimum-wage hike, he'd strip away the other parts that offended them. By the time the bill came up to a vote, the minimum wage clauses were protected. The measure passed the Senate by 50 to 23, and Truman signed it into law on Oct. 26, 1949.


Of course, the minimum wage hike came with just about none of the negative effects critics had predicted. Unemployment didn't rise, business kept chugging along and a 1954 Labor Department study found at least 1.3 million people received immediate raises when the increase took effect.


Truman wasn't nearly as successful with the rest of his labor agenda and found himself bogged down by the Korean War, but he still scored enough bragging rights to say during his last State of the Union address in 1952 that "our democracy has not forgotten how to use the powers of the government to promote the people's welfare and security."


A two-decade boom followed.


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477Comments
Aug 29, 2013 10:42AM
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Remember when working fast food jobs and low end retail sales was for teens and  high school/ college students (kids first jobs) with the exception of a few manager slots. With all the manufacturing and technology jobs being sent overseas a desperate public is now forced to try to earn a living, raise a family and build a future with part time minimum wage jobs. Pease bring the the real jobs back to America, the teens need their jobs back, and the middle class needs its future back.  
Aug 29, 2013 10:28AM
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Minimum wage was never supposed to be able to support a family, where did this notion come from?  Minimum wage jobs were meant for young workers (high school entry jobs, and retired seniors).  They are meant as a stepping stone to the workplace, where you gain experience and work to better yourself and your career.

 

Aug 29, 2013 10:23AM
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My first paycheck job was when I was 14 years old. I worked for 3.35 an hour. It taught me that I NEEDED a SKILL to make MORE. This meant I was motivated to go to a  community college out of high school. I studied welding engineering at a community college. The skills I learned opened many doors for me. Currently I have been working for a Class 1 Railroad for the last 11 years. My union wage is $29.08 an hour.  If you WORK AND LEARN you understand that there are better paying JOBS.   
Aug 29, 2013 7:31AM
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These kinds of apples to oranges comparisons are useless.  It is a very different time today than it was in 1949.  Most importantly, the birth rate and rate of household creation today isn't even close to what it was back then. We also weren't running a massive trade deficit, and it wasn't at all feasible for most US employers to ship jobs overseas...
Aug 29, 2013 8:11AM
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Everytime they raise minimum wage the cost of goods goes up accordingly.  In the long run you actually lose money.  Not too mention those of us who already make just slightly more than the new minimum, we see no raise, so we actually take a loss. 
Aug 29, 2013 10:24AM
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As long as we have free trade with other countries who are taking advantage of the arrangement by importing little FROM us and  exporting massive amounts of goods TO us, we are putting the United States on a level playing field with countries that use child labor and pay workers $10.00 a week. 
This very arrangement in and of itself forces employers in the USA to cut wages and abuse workers in order to compete in the national market. 

FREE TRADE SUCKS. 
OUR ANCESTORS FOUGHT AND DIED TO CREATE THE AMERICAN MARKETPLACE, AND OTHER COUNTRIES SHOULD PAY TO BE A PART OF IT. DOING BUSINESS IN THE UNITED STATES IS A PRIVILEGE. WE ARE DESTROYING OUR OWN COUNTRY. 
Aug 29, 2013 10:25AM
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The basic problem that now exists with these minimum-wage type jobs is that they no longer are just filled by young high school kids looking for some spending money. The elimination of manufacturing and other mid-range employment has forced many people to either take, or stay at these low-paying entry-level type jobs, and if you look at the people doing them, you will see a more mature crowd, with different reasons for working there than just earning gas money for the car daddy bought them. Almost all of the financial problems that now exist in this country can be attributed to a steady declining job market, and stagnation of wages, especially for the middle and lower class. Unfortunately, unless some sort of job bonanza occurs, this trend is going to continue, as even the job growth numbers reflect part time and more entry level type of employment. I usually advocate for minimum wage increases, but in this case, the demands are a bit out of line. Most companies are not going to voluntarily pay their workers more, but perhaps a pay scale that reflects higher wages for years worked, or merit would be a good way to keep good employees content, and provide them with a more livable income. When I ran a small business, I would evaluate everything and everybody once a year, and I would either give each employee a small wage in appreciation of their work and service, or I would get rid of them and replace them with a new face. I found that by doing this, the work force seemed more stable, more productive, and less combative. Minimum wage standards should be adequate, but $15.00 an hour is off the charts.
Aug 29, 2013 10:05AM
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The Aussies have a $16/hour minimum wage for age 20 and older, and their Government does not have to pay subsidies and give food stamps to their WalMart and McDonalds employees. Both of these businesses are doing fin in Austrailia. 93% of the cash in the country is held by the top 1% of the population. (That's about $28.8 trillion) To end the recession the money has to be circulated again. The best way is by increasing wages. The rich are crying poor. This is ridiculous.
Aug 29, 2013 1:07PM
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So what happens with "skilled workers" making $15 an hour? Do they get bumped to $30 and hour?

And the $30 and hour people? Do they get raised to $60?. Most construction jobs don't reach the $15 range until a skill set has been established. Does a new minimum wage give all workers an automatic raise in appropriation?

Aug 29, 2013 10:16AM
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Let's do an actual comparison vs. a pick and choose that the author chose for this article. How much in taxes did employers have to pay back then, and include everything. I.E. federal, state and local taxes.  Plus you also have to consider that the U.S. was the only country not devastated by WW II, so we had the market to sell to the world.
Aug 29, 2013 10:06AM
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Raising the min wage would benefit everyone except 1% of our population.  I think its stupid to pay someone an unlivable wage and then turn around and run massive gov't programs to issue them welfare.  Why not just have the companies pay their workers a livable wage, cut back on the gov't assistance to these folks and try to get some balance in our society.  Yes, the corporations will have to adjust their pay, and hopefully it starts at the top.  I think our model of capitalism has gone wack.  I don't see how anyone is worth millions and millions to run a company.  The ones who invented something (i.e. bill gates, Henry Ford, ect.) yes then I agree, but for CEO's of utilities, phone companies, banks, ect. should not be making 20 million dollars a year.  WE need too get realistic.
Aug 29, 2013 10:26AM
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A federal minimum wage does not make sense. In places like New York and California workers might need $15/hr just to get by but in the midwest that is more than enough to live comfortably. This issue should be settled at the state or even city level. Professional careers in the midwest pay less than those in California and mcdonalds shouldn't be forced to pay teenagers in the midwest the same as those in california.

Aug 29, 2013 10:39AM
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Let's see, you didn't make the best choices but worked hard and are now up to $15 an hour.  Lower blue collar middle class, but with your spouse working, doing ok....BOOM.  You are now making minimum wage again, the same money that hamburger flipper is.  Your wages don't increase (and they won't!).  Congrats.  You're scr**ed as everything you now need to survive skyrockets.  But you can feel happy this won't affect the rich much.
Aug 29, 2013 10:50AM
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A slight increase in the minimum wage may have been warranted if there was not Obama Care.  Not only do employers have to pay for Obama Care but the other regulations and more aggressive tactics by the IRS in collecting penalties for being one day late in filing etc. has made it really rough time to be a small business.

 

The large companies or the 1% as a lot of you call them will not suffer.  They will move more jobs overseas if it saves them money and will make decisions that benefit them.  Those that will suffer are the middle class which is already shrinking.  One of the main components of the middle class still left is the small business owner.  This is just another way of throwing them under the bus.

 

The real issue in this country are simple.  1) There are families that are struggling with the high cost of health care, high energy costs, gasoline prices and rising rents. 2) The government is over spending and most of it is wasted. 3) The education system in this country is a mess where there are more administrators then teachers at all levels of the system from elementary school right up to colleges which are part of the ever increasing property taxes paid by home owners and landlords (economics 101 the renter eventually pays the property taxes via higher rent). 4) The salary levels and retirement benefits of government workers far exceed those of ordinary citizens who are struggling to survive. 5) Both political parties cater to the wall street bankers, lawyers, and others since their campaign contributions are what got them elected in the first place.  The president got more money from wall street and Hollywood then his challenger in the last election cycle. 

 

Higher wages are an additional way for the government to increase its tax coffers.  The Social Security taxes, Medicare taxes, and higher marginal rates benefit the government more than the individuals receiving them who will not benefit because of the inflationary pressure.

Aug 29, 2013 11:08AM
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So if I have a graduate degree and make a six figure income does this mean I would make approximately $200,000 a year now. If unskilled labor is worth twice the current rate then skilled labor certainly should be.

SCORE! I'm looking forward to that extra 100 grand. I'll need it for that $18 double cheese burger.

Aug 29, 2013 11:54AM
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Where is the money coming from to fund the organization of these minimum wage workers? It's coming from union organizers. They have been trying for years to infiltrate the restaurant and fast food business. Do people realize that unions have written into their contracts, clauses tied to the minimum wage? It is written as a percentage. So if minimum wage goes up by 100% then their pay increases by 100%. So all those public employee unions that are already a major burden of municipalities will put the final nail in the coffin.

Payroll, as with any expense in a company,  needs to measured for it's return on investment. If you provide the company a higher skill set you deserve more salary than another employee that cannot do the tasks you can. Regardless of the amount of time you have been doing the job. If you want to make more money, make yourself worth more to the employer.

Aug 29, 2013 10:35AM
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And there was no "Fast Food" Industry in 1949. Nearly all of the restaurants of that day had wait staff that depended on tips for their pay. They were not making minimum wage before, or after the increase you note.

Another revisionist history effort by MSNBC to support their position.

Aug 29, 2013 10:33AM
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Higher min wage means higher prices so nothing is gained and the people that are crying about it are the ones that need an education, if you depend on McDonalds to support a family maybe you should rethink your life choices. the other side is if you are going down that road then you need to increase social security too so they will be able to afford to eat there.
Aug 29, 2013 12:10PM
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The guy in the picture is building a chair.  That requires some skill.  Making a hamburger requires no skill. 
Aug 29, 2013 12:49PM
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Paying a burger flipper $15 per hour is rediculous.  My first job out of my 4 year B.s. program paid $10 per hour and required the degree, a high level of scientific knowledge, and A LOT more effort and motivation than working at McD's.  I do agree that the minimum wage needs to rise, but not $15 an hour, and not across the board. 

 

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