In 1929, the stock market crashed, and over the next few years, the GNP (gross national product) fell off the map, and unemployment soared. By 1933, the country was in a Great Depression. About 15 million American workers were unemployed and banks all over the country were failing. For ten years, the world felt what is known as the Great Depression. Back then, if you were cheated out of wages, you probably would not have been able to seek legal help through an unpaid overtime lawsuit, because overtime wasn’t recognized.
Millions of people were homeless and hungry. But, farmers had been suffering from drought throughout the 1920s, and by the middle of the Great Depression, those that had been able to grow crops weren’t able to harvest them. Farmland across the country went fallow, while millions were out of work and starving, and were forced to stand in bread lines and soup lines to keep their families from starving.
President Roosevelt’s New Deal help spur the country out of the depression with programs like the Works Project Administration (WPA) put more than eight million people to work while the Tennessee Valley Authority (TVA) started building dams and hydroelectric plants to control flow and reduce flooding as well as bring jobs and electric power to the impoverished south.
In 1935, congress passed the Social Security Act which for the first time in our country’s history provided a financial security net for those who were unemployed, disabled, or too old to work. In 1938, the Fair Labor Standards Act (FLSA) was passed that defined the maximum work week as 44 hours over a seven-day work week. The act also created an overtime law that required certain employers to pay “time and a half” for work performed over 44 hours, and the law stopped child labor practices.
The law also established the first national minimum amount that a worker could be paid in the United States. At the time, the cost of living was a whole lot less than it is today.
- 10 cents for a gallon of gas
- 9 cents for a load of bread
- A gallon of milk costs 50 cents
- Eggs were 18 cents a dozen
- One pound of ground beef cost about 13 cents
- 15 cents per pound for pork loin
- 25 cents for three packages of Kellogg’s Corn Flakes
- $5.00 for a new blanket
- A new car would set you back about $800
- Less than $4,000 bought you a new house
- The average rent for a house was about $27.00 a month
While the amount the average worker brought home each year was about $1,700, the law set the first minimum wage at 25 cents per hour, or about $11 bucks per week, or less than $600 per year. While this was mostly aimed at stopping child labor abuses, it also provided a pathway to the law as it stands today with minimum wage, overtime pay protections, recordkeeping rules, and child worker standards.
Want to learn more about the FLSA and your right to a fair minimum wage, overtime pay for hours worked over 40-hours per week, and accurate worker classifications that provide additional benefits. To learn more about how the FLSA protects you today.