Abstract
The paper examines changes in wage and hour labor regulation between 1898 and 1938. Many see the 1905 Lochner Supreme Court decision striking down hours limits for men as the beginning of 30 years in which labor regulation was stymied by the doctrine of “freedom of contract.” That issue played a role but judges often weighed it against safety issues. As a result, hours limits for men in dangerous industries were found to be constitutional. The debates over minimum wages for women also centered on these issues. These laws passed muster in state supreme courts and initially at the US Supreme Court. In 1923, a majority of Supreme Court judges emphasized freedom of contract in declaring a female minimum wage unconstitutional. Seeing close votes and substantial turnover of judges on the Supreme Court, many states continued promulgating advisory minimums and passed new laws. Ultimately, turnover on the Court and a renewed emphasis on the role of minimum wages in ensuring health and safety of women and children during the Depression led the Court to declare minimums for women constitutional. This opened the door for federal minimum wage legislation for all workers.
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Notes
- 1.
The information on state laws throughout the paper was compiled by Rebecca Holmes (2003, 2005) for her award-winning dissertation on the development of state labor legislation. Holmes et al. (2008) and Fishback et al. (2009) have developed summary indices and explored a number of correlations with various measures of labor markets during the period.
- 2.
Cushman (1998, 57–58) cites a series of Supreme Court decisions related to these issues and affirming the legislation.
- 3.
In an odd contrast in Table 1, Justice William Day voted against the railroad hours limits in Wilson even though he had supported the hours limits in Lochner, Muller, and Bunting, as well as the minimum wage in Stettler.
- 4.
Prior to Muller, state courts in Massachusetts, Nebraska, Oregon, and Washington had supported the constitutionality of the limits on women’s hours, while in Illinois it was declared unconstitutional. See Commonwealth v. Hamilton Mfg. Co., 120 Massachusetts 383; Wenham v. State, 65 Nebraska 394, 400, 406; State v. Buchanan, 29 Washington 602; Commonwealth v. Beatty, 15 Pa.Sup.Ct. 5, 17; against them is the case of Ritchie v. People, 155 Illinois 98.
- 5.
Cushman (1998, 247n59) cites Bosley v. McLaughlin (236 US 3851915), Miller v. Wilson (236 US 373, 1915), Hawley v. Walker (232 US 718, 1914), and Riley v. Massachusetts (232 US 671, 1914).
- 6.
The states were Massachusetts and Ohio in 1912; California, Colorado, Minnesota, Nebraska, North Dakota, Oregon, Utah, Washington, and Wisconsin in 1913; Arkansas in 1915; Arizona in 1917; D.C. in 1918; and Texas in 1919. Ohio passed a constitutional amendment but never enforced the law and Nebraska never put it into operation. All of the rest except Colorado set specific rates, generally through commissions. Violations were treated as misdemeanors in which the court could award back wages in most states. Massachusetts differed in that it reported the names of violators in newspapers instead. Nebraska in 1919 repealed the law but then adopted a constitutional amendment in 1920 that authorized legislation, while Texas in 1921 repealed its law. See Clark (1921, 10–12) and Smith (1932) for descriptions of the laws at various times.
- 7.
See Elizabeth Brandeis (1935, 499–539) for discussions of the application of the laws.
- 8.
See US Bureau of Labor Statistics, “Minimum Wage Legislation in the United States.” Monthly Labor Review 37 (1933): 1344–1354. The Kansas case was Topeka Laundry Col v. Court of Industrial Relations (119 Kans. 13) and the Minnesota case was Stevenson v. St. Clair (161 Minn. 444).
- 9.
See US Bureau of Labor Statistics, “Minimum Wage Legislation in the United States.” Monthly Labor Review 37 (1933): 1344–1354. In Washington see Larsen v. Rice (100 Wash. 642 in 1918; Spokane Hotel v. Younger (113 Wash. 359 in 1920; Sports. v. Moritz (141 Wash. 417). In North Dakota, it was Northwestern T.E. Co. v. Workmen’s Compensation Bureau (47 N.D. 397). In Massachusetts the case was Holcombe v. Creamer (231, Mass 99) in 1918.
- 10.
See US Bureau of Labor Statistics. Handbook of Labor Statistics, 1931, Edition. Bulletin No. 541, 1931, p. 448. The ruling is Folding Furniture Works v. Industrial Commission (300 Fed. 991, 1924, US District Court, W.D., Wisconsin).
- 11.
“Legislative Notes.” American Labor Legislation Review 14 (1924), p. 203
- 12.
- 13.
Section 3d of the NIRA gave the president the authority to hold hearings and set up codes of fair competition “if complaint is made to the President that abuses inimical to the public interest and contrary to the policy herein declared are prevalent in any trade or industry or subdivision thereof, and if no code of fair competition therefor has theretofore been approved by the President.” Violations were misdemeanors with fines of up to $500 for each day an offense occurred. Section 3e gave the right to impose trade restrictions on foreign imports that violated the codes.
- 14.
Section 3d of the NIRA gave the president the authority to hold hearings and set up codes of fair competition “if complaint is made to the President that abuses inimical to the public interest and contrary to the policy herein declared are prevalent in any trade or industry or subdivision thereof, and if no code of fair competition therefor has theretofore been approved by the President.” Violations were misdemeanors with fines of up to $500 for each day an offense occurred. Section 3e gave the right to impose trade restrictions on foreign imports that violated the codes.
- 15.
Cushman (1998) suggests that a similar statement might be made about the 5–4 Supreme Court ruling in Carter v. Carter Coal Co. (298 US 238, 1936), which struck down the attempt in the Bituminous Coal Conservation Act of 1935 to reestablish a version of the NRA bituminous coal code that set prices, wages, and hours. The majority ruled that the excise tax in the act was a “penalty” designed to coerce compliance, and Congress did not have the power to control wages, hours, and working conditions because it has “no general power to regulate for the promotion of the general welfare” and cannot control production within a state before the coal is sold in interstate commerce (p. 298).
- 16.
Cushman (1998, 77) states that these included a unanimous decisions in Tagg Brothers & Moorhead v. United States (280 US 420, 1930) to allow the Secretary of Agriculture to set commissions for brokers in stockyards and a 5–4 majority decision on O’Gorman & Young, Inc. v. Hartford Fire Ins. Co., 282 US 251 (1931), written by Brandeis to limit commissions for agents selling fire insurance in New Jersey. In the insurance case, the claim was that insurance rates were already regulated and that the commissions were a large enough share of insurance rates that they could be regulated as well to prevent insurers from being driven out of their public service business. Justice Van Devanter’s dissent joined by McReynolds, Sutherland, and Butler argued that the state had the right to regulate the business but “it may not say what shall be paid to employees or interfere with the freedom of the parties to contract in respect of wages” (Cushman 1998, 77).Van Devanter did acknowledge that there might be special circumstances that would allow the freedom of contract to be abridged, but they had not occurred in the O’Gorman setting (Cushman 1998, 77).
- 17.
See Cushman 1998, 94–95. When reading Cushman about the New York case, it can be confusing because he refers to the case as Morehead and as Tipaldo.
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Acknowledgments
The author is also affiliated as Honorary Professor at Stellenbosch University. I would like to thank the Hoover Institution for funding to support the writing of this paper. Earlier drafts were presented at two conferences under the Regulation and Rule of Law Initiative at the Hoover Institution, the 2019 ASSA Meetings, and in seminars at UC-Davis, and UC-Irvine. I have received valuable comments from Lee Alston, Vellore Arthi, Will Baude, Dan Bogart, Charlie Calomiris, Greg Clark, Chris Demuth, Jesus Fernandez-Villaverde, Diana Furchtgott-Roth, Nicole Garnett, Gary Libecap, Christos Makridis, Mike McConnell, Alan Olmstead, Gary Richardson, Andy Seltzer, Bob Topel, and John Wallis. Special thanks go to Samuel Allen and Rebecca Holmes for all of their help in developing the data used in the paper.
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Appendix: Fishback on Murray
Appendix: Fishback on Murray
John Murray was an exemplary scholar and a great colleague. His journal articles about the experiences of workers, social insurance, public assistance, health, heights, and safety were all well conceived and well executed. John wrote marvelous books on sickness insurance in the early 1900s and the safety net for children in the early 1800s that showed how narrative and quantitative evidence could be brought together to provide a deep and readable analysis. Better yet, John was one of the kindest and most thoughtful people I have known. Each time we met, it was a joyous occasion and I miss him deeply.
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Fishback, P. (2022). Health and Safety vs. Freedom of Contract: The Tortured Path of Wage and Hours Limits Through the State Legislatures and the Courts. In: Gray, P., Hall, J., Wallis Herndon, R., Silvestre, J. (eds) Standard of Living. Studies in Economic History. Springer, Cham. https://doi.org/10.1007/978-3-031-06477-7_3
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