Abstract Attention to the implicit and explicit wage theories articulated by economic actors and embedded in public policy reveals the underlying social norms and values in specific historical and industrial contexts. The Fair Labor Standards Act of 1938 (FLSA), the first federal minimum wage legislation in the United States, legitimated and institutionalized the idea that living standards and workers' needs matter in setting wages. They matter not simply in generating labor supply, but as the basis for government intervention in market mechanisms. Rather than viewing market mechanisms and government regulations dichotomously, economic actors debating the FLSA treated both market mechanisms and socially defined living standards as legitimate elements of wage-setting. Wage regulations also, by necessity, must grapple with issues of identity, that is, which workers (especially as defined by class, gender, and race ethnicity) are deserving of particular living standards. Debates over the language in the FLSA reveal the contested nature of masculinity during the period of economic crisis in the 1930s. Advocates responded by defining a multiplicity of living wages corresponding with different living standards, as well as a multiplicity of strategies for achieving them.
Keywords: minimum wage, living wage, New Deal, gender, masculinity, economic policy
Since the mid-1990s, coalitions of community groups, faith-based activists, and labor unions have worked to pass legislation called municipal "living wage ordinances," mandating that private businesses receiving public funds pay their own workers a "living wage" higher than the current federal minimum wage. The emphasis of the 1996 Personal Responsibility and Work Opportunity ("welfare reform") Act on labor market activity as the primary means of provisioning for single mothers, along with concerns about economic inequality and the privatization of public services, have provided support for the contemporary living wage movement. The dollar threshold typically sought is the hourly rate equivalent for one full-time earner to keep a family of three or four above the federal poverty line; the legislated compromise is usually lower, attempting to balance the family-sustaining threshold with the political realities of negotiating with local governments.
Living wage activists have revived arguments that firms whose employees are among the working poor are parasitic, linking this argument to the rise in what has been called corporate welfare. If private sector employers receive tax subsidies and other benefits from state and local government, then those same employers have a social obligation to pay employees a family-sustaining wage. Current living wage initiatives can therefore be seen as attempts to assert a view of economic activity as a process of provisioning, that is, of producing and reproducing human material life. Such policies give community interests and well-being primacy over market forces.
The context of these contemporary living wage campaigns is quite different than the context under which the first federal minimum wage was passed. The enactment of federal wage and hour legislation during the New Deal was significant on many levels. The Fair Labor Standards Act (FLSA) set the first federal minimum wage and established a 40-hour week as a social norm by mandating a higher overtime rate of pay for hourly wage workers. Beyond the concrete policy precedents it established, the FLSA was symbolically important. The symbolic importance of the minimum wage has kept it at the forefront of policy debates even as actual coverage under the policy has waxed and waned (Waltman 2000).
Nevertheless, there are threads of continuity. Living wage movements, past and present, provide an alternative theory of wages to the orthodox view of wage floors as rigid barriers to finding market equilibrium. Establishing a federal minimum wage legitimated the idea that living standards and workers' needs mattered in setting wages. …