Minimum wage is the lowest possible salary that businesses can pay its employees whether per hour, per day, or per month, as mandated by law. In the same breath, it is also by law the lowest rate that a citizen can charge in exchange for his labor. Minimum wage is enforced to enable citizens to be able to cover basic living expenses and to avoid labor exploitation. If an employer pays wages lower than the mandated minimum wage, this can be grounds for penalization.
The concept of minimum wage was originally used to control the increase in the number of manufacturing sweat shops. The term sweat shop refers to factories that have compromised working conditions, whether on wages, sanitation or working hours. Minimum wage laws were not in place in the US until the 1930’s, and the wages that employees would get were usually determined by individual employers. Workers had to accept what was offered to them versus being unemployed.
US Democratic politicians were at the forefront in supporting organized labor unions in their push to standardize minimum pay for laborers. President Franklin D. Roosevelt in 1935 made the first minimum wage proposal under the National Recovery Act, which called for an hourly 25 cents pay. Subsequently, the Supreme Court deemed this unconstitutional. In 1938, the same minimum wage law was passed, initially covering the transportation and agricultural industries. Later, it would include other businesses.
Today, minimum wage is usually applicable to unskilled or semi-skilled workers. Currently, the federal minimum wage in the United States is at $7.25 per hour. According to the International Labour Office, around 90 percent of the world’s countries currently have legislations that aim to employ minimum wage.