The first map above show the differences between the current minimum wage rate by state in 2024 with the inflation adjusted original Federal Minimum Wage of 25¢ per hour, equivalent to $5.60 per hour in October 2024, for jobs covered under the Fair Labor Standards Act of 1938.
The second map shows the difference between the original proposed Federal Minimum Wage wage rate of 40¢ per hour, equivalent to $8.96 per hour in October 2024 with those of states in 2024.
In the first map, every state has a higher inflation adjusted minimum wage in 2024 than they did in 1938.
However, as is discussed below, the 25¢/hour was a compromise solution, and if they had gone for the original proposed plan of 40¢/hour many states would have a lower minimum wage today than they would have had in 1938.
It was created in response to some comments on reddit that my previous map showing the Difference In Inflation Adjusted Minimum Wage Rate By State Between 2024 and 1968 may have been an unfair starting point.
So why not use 1938, when the minimum wage was introduced, as the starting point?
1968 was the inflation adjusted highpoint of the Federal Minimum Wage of $1.60 per hour in 1968 dollars or the equivalent of $14.82 an hour in 2024.
However, the reason for picking 1968 wasn’t ideological, but simply based on the starting date for state level data from the Department of Labour.
Therefore, the maps above are comparing the Federal Minimum Wage rates in 1938 (Actual & Proposed) with State level minimum wage rates in 2024.
And it does not take into account any higher state level minimum wage rates in 1938 that may have existed in any state (more that below as well).
Also each state uses the lowest minimum wage possible in states under jobs covered under the Fair Labor Standards Act.
For example, Arkansas, Minnesota, Missouri, New Jersey, Ohio and West Virginia all have higher different minimum wage rates depending on the size and/or turnover of their employer.
The state of Arkansas is a good example, the minimum wage of rate of employers with more than 4 employees is $11/hour whereas those with fewer employees can use the Federal Minimum Rate of $7.25/hour.
The problem is 49% of businesses with employees have only 1-4 employees, making the higher wage rate look higher than it is for many employers.
One additional interesting thing I found while researching this is that the growth in average hourly wage rates in the US has significantly outpaced inflation between 1938 and 2024.
For example, in 1938 the average US manufacturing job paid 63.9¢ per hour ($14.20 in 2024 dollars), while the average manufacturing job in October 2024 paid $28.19 per hour, almost twice amount in inflation adjusted terms.
Here are the maps in larger size and followed by the data tables. Also, below them there’s a bit more of on the background on the minimum wage and the proposed vs actual rate chosen.
Differences In The Inflation Adjusted Original Minimum Wage (25¢/Hour) By State Between 1938 and 2024
| State | 1938 Minimum Wage (Non-Inflation Adjusted) | 1938 Minimum Wage Inflation adjusted | 2024 Minimum Wage | Difference Between 2024 and 1938 |
|---|---|---|---|---|
| Federal Minimum Wage | $0.25 | $5.60 | $7.25 | $1.65 |
| Alabama | $0.25 | $5.60 | $7.25 | $1.65 |
| Alaska | $0.25 | $5.60 | $11.73 | $6.13 |
| Arizona | $0.25 | $5.60 | $14.35 | $8.75 |
| Arkansas | $0.25 | $5.60 | $7.25 | $1.65 |
| California | $0.25 | $5.60 | $16.00 | $10.40 |
| Colorado | $0.25 | $5.60 | $14.42 | $8.82 |
| Connecticut | $0.25 | $5.60 | $15.69 | $10.09 |
| Delaware | $0.25 | $5.60 | $13.25 | $7.65 |
| Florida | $0.25 | $5.60 | $13.00 | $7.40 |
| Georgia | $0.25 | $5.60 | $7.25 | $1.65 |
| Hawaii | $0.25 | $5.60 | $14.00 | $8.40 |
| Idaho | $0.25 | $5.60 | $7.25 | $1.65 |
| Illinois | $0.25 | $5.60 | $14.00 | $8.40 |
| Indiana | $0.25 | $5.60 | $7.25 | $1.65 |
| Iowa | $0.25 | $5.60 | $7.25 | $1.65 |
| Kansas | $0.25 | $5.60 | $7.25 | $1.65 |
| Kentucky | $0.25 | $5.60 | $7.25 | $1.65 |
| Louisiana | $0.25 | $5.60 | $7.25 | $1.65 |
| Maine | $0.25 | $5.60 | $14.15 | $8.55 |
| Maryland | $0.25 | $5.60 | $15.00 | $9.40 |
| Massachusetts | $0.25 | $5.60 | $15.00 | $9.40 |
| Michigan | $0.25 | $5.60 | $10.33 | $4.73 |
| Minnesota | $0.25 | $5.60 | $8.85 | $3.25 |
| Mississippi | $0.25 | $5.60 | $7.25 | $1.65 |
| Missouri | $0.25 | $5.60 | $7.25 | $1.65 |
| Montana | $0.25 | $5.60 | $10.30 | $4.70 |
| Nebraska | $0.25 | $5.60 | $12.00 | $6.40 |
| Nevada | $0.25 | $5.60 | $12.00 | $6.40 |
| New Hampshire | $0.25 | $5.60 | $7.25 | $1.65 |
| New Jersey | $0.25 | $5.60 | $13.73 | $8.13 |
| New Mexico | $0.25 | $5.60 | $12.00 | $6.40 |
| New York | $0.25 | $5.60 | $15.00 | $9.40 |
| North Carolina | $0.25 | $5.60 | $7.25 | $1.65 |
| North Dakota | $0.25 | $5.60 | $7.25 | $1.65 |
| Ohio | $0.25 | $5.60 | $7.25 | $1.65 |
| Oklahoma | $0.25 | $5.60 | $7.25 | $1.65 |
| Oregon | $0.25 | $5.60 | $14.70 | $9.10 |
| Pennsylvania | $0.25 | $5.60 | $7.25 | $1.65 |
| Rhode Island | $0.25 | $5.60 | $14.00 | $8.40 |
| South Carolina | $0.25 | $5.60 | $7.25 | $1.65 |
| South Dakota | $0.25 | $5.60 | $11.20 | $5.60 |
| Tennessee | $0.25 | $5.60 | $7.25 | $1.65 |
| Texas | $0.25 | $5.60 | $7.25 | $1.65 |
| Utah | $0.25 | $5.60 | $7.25 | $1.65 |
| Vermont | $0.25 | $5.60 | $13.67 | $8.07 |
| Virginia | $0.25 | $5.60 | $12.00 | $6.40 |
| Washington | $0.25 | $5.60 | $16.28 | $10.68 |
| West Virginia | $0.25 | $5.60 | $7.25 | $1.65 |
| Wisconsin | $0.25 | $5.60 | $7.25 | $1.65 |
| Wyoming | $0.25 | $5.60 | $7.25 | $1.65 |
| District of Columbia | $0.25 | $5.60 | $17.50 | $11.90 |
Differences In Proposed Inflation Adjusted Original Minimum Wage (40¢/Hour) By State Between 1938 and 2024
| State | 1938 Proposed Min Wage (Non-Inflation Adjusted) | 1938 Proposed Min Wage Inflation adjusted | 2024 Minimum Wage | Difference Between 2024 and 1938 |
|---|---|---|---|---|
| Federal Minimum Wage | $0.40 | $8.96 | $7.25 | $-1.71 |
| Alabama | $0.40 | $8.96 | $7.25 | $-1.71 |
| Alaska | $0.40 | $8.96 | $11.73 | $2.77 |
| Arizona | $0.40 | $8.96 | $14.35 | $5.39 |
| Arkansas | $0.40 | $8.96 | $7.25 | $-1.71 |
| California | $0.40 | $8.96 | $16.00 | $7.04 |
| Colorado | $0.40 | $8.96 | $14.42 | $5.46 |
| Connecticut | $0.40 | $8.96 | $15.69 | $6.73 |
| Delaware | $0.40 | $8.96 | $13.25 | $4.29 |
| Florida | $0.40 | $8.96 | $13.00 | $4.04 |
| Georgia | $0.40 | $8.96 | $7.25 | $-1.71 |
| Hawaii | $0.40 | $8.96 | $14.00 | $5.04 |
| Idaho | $0.40 | $8.96 | $7.25 | $-1.71 |
| Illinois | $0.40 | $8.96 | $14.00 | $5.04 |
| Indiana | $0.40 | $8.96 | $7.25 | $-1.71 |
| Iowa | $0.40 | $8.96 | $7.25 | $-1.71 |
| Kansas | $0.40 | $8.96 | $7.25 | $-1.71 |
| Kentucky | $0.40 | $8.96 | $7.25 | $-1.71 |
| Louisiana | $0.40 | $8.96 | $7.25 | $-1.71 |
| Maine | $0.40 | $8.96 | $14.15 | $5.19 |
| Maryland | $0.40 | $8.96 | $15.00 | $6.04 |
| Massachusetts | $0.40 | $8.96 | $15.00 | $6.04 |
| Michigan | $0.40 | $8.96 | $10.33 | $1.37 |
| Minnesota | $0.40 | $8.96 | $8.85 | $-0.11 |
| Mississippi | $0.40 | $8.96 | $7.25 | $-1.71 |
| Missouri | $0.40 | $8.96 | $7.25 | $-1.71 |
| Montana | $0.40 | $8.96 | $10.30 | $1.34 |
| Nebraska | $0.40 | $8.96 | $12.00 | $3.04 |
| Nevada | $0.40 | $8.96 | $12.00 | $3.04 |
| New Hampshire | $0.40 | $8.96 | $7.25 | $-1.71 |
| New Jersey | $0.40 | $8.96 | $13.73 | $4.77 |
| New Mexico | $0.40 | $8.96 | $12.00 | $3.04 |
| New York | $0.40 | $8.96 | $15.00 | $6.04 |
| North Carolina | $0.40 | $8.96 | $7.25 | $-1.71 |
| North Dakota | $0.40 | $8.96 | $7.25 | $-1.71 |
| Ohio | $0.40 | $8.96 | $7.25 | $-1.71 |
| Oklahoma | $0.40 | $8.96 | $7.25 | $-1.71 |
| Oregon | $0.40 | $8.96 | $14.70 | $5.74 |
| Pennsylvania | $0.40 | $8.96 | $7.25 | $-1.71 |
| Rhode Island | $0.40 | $8.96 | $14.00 | $5.04 |
| South Carolina | $0.40 | $8.96 | $7.25 | $-1.71 |
| South Dakota | $0.40 | $8.96 | $11.20 | $2.24 |
| Tennessee | $0.40 | $8.96 | $7.25 | $-1.71 |
| Texas | $0.40 | $8.96 | $7.25 | $-1.71 |
| Utah | $0.40 | $8.96 | $7.25 | $-1.71 |
| Vermont | $0.40 | $8.96 | $13.67 | $4.71 |
| Virginia | $0.40 | $8.96 | $12.00 | $3.04 |
| Washington | $0.40 | $8.96 | $16.28 | $7.32 |
| West Virginia | $0.40 | $8.96 | $7.25 | $-1.71 |
| Wisconsin | $0.40 | $8.96 | $7.25 | $-1.71 |
| Wyoming | $0.40 | $8.96 | $7.25 | $-1.71 |
| District of Columbia | $0.40 | $8.96 | $17.50 | $8.54 |
Minimum Wage Rates Before 1938
The sections below are based on the excellent article by Price V. Fishback and Andrew J. Seltzer: The Rise of American Minimum Wages, 1912–1968, which you should definitely read if you have any interest in the topic.
And supplemented by some data from the U.S. Department of Labor, Bureau of Labor Statistics.
The table below shows which states passed minimum wage laws prior to 1938, in most cases it only covered women and/or children.
| State | Date(s) | Coverage | Exceptions (1938) |
|---|---|---|---|
| Arizona | 1917–25, 1937 | W, C21 | A, B |
| Arkansas | 1915–27, 1937 | W | B, C, D |
| California | 1913 | W, C18 | NONE |
| Connecticut | 1933 | W, C18 | A, B |
| Colorado | 1913 | W, C18 | NONE |
| District of Columbia | 1918–23, 1938 | W, C18 | A |
| Illinois | 1933 | W, C18 | A, B |
| Kansas | 1915–27, 1938 | W, C21 | NONE |
| Kentucky | 1938 | W, C21 | A, B, E |
| Louisiana | 1938 | W | A, B, I |
| Massachusetts | 1912–34, 1934 | W, C21 | A, B |
| Minnesota | 1913–25, 1937 | W | NONE |
| Nebraska | 1913–19 | W | |
| Nevada | 1937 | W, C21 | A |
| New Hampshire | 1933 | W, C21 | A, B |
| New Jersey | 1933 | W, C21 | A, B, F |
| New York | 1933–36, 1937 | W, C18 | A, B |
| North Dakota | 1919 | W, C21 | A, B |
| Ohio | 1933 | W, C21 | A, B |
| Oklahoma | 1937 | All | B |
| Oregon | 1913 | W, C18 | NONE |
| Pennsylvania | 1937 | W, C21 | A, B, G, H |
| Rhode Island | 1936 | W, C21 | A, B |
| South Dakota | 1923 | W | A, B |
| Texas | 1919–21 | W, C15 | |
| Utah | 1913–29, 1933 | W, C18 | NONE |
| Washington | 1913 | W, C18 | NONE |
| Wisconsin | 1913–24, 1937 | W, C21 | NONE |
| Source: United States Bureau of Labor Statistics (1933b), Phelps (1939), p. 60, and Seltzer (1994). Note: W – women, C21 (C18) – children 21 (18) years of age or less, A – domestic service, B – agricultural labor, C – cotton factories, D – railroads covered by federal laws, E – firms regulated by the state Public Service Commission, F – hotels, G – religious or charitable organizations, H – sale and delivery of newspapers and magazines, I – municipalities with a population under 10,000. |
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In the early 1900s, labor laws in the United States were primarily governed by state and local authorities.
Reformers aimed to eliminate “sweated” labor—arduous work for minimal pay under poor conditions—especially for women and children, framing it as a health and safety issue.
The U.S. Supreme Court had mixed rulings on such regulations: it upheld state laws limiting men’s working hours in hazardous industries in Holden v. Hardy (1898) but struck down a New York law limiting male bakers’ hours in Lochner v. New York (1905), citing a violation of freedom of contract.
Conversely, in Muller v. Oregon (1908), the Court upheld restrictions on women’s working hours, emphasizing the societal importance of women’s health for childbearing.
Due to challenges in regulating men’s labor conditions, reformers focused on establishing minimum wage laws for women and children.
Massachusetts enacted the first such law in 1912, followed by Oregon in 1913 and several other states over the next two decades.
These laws often created commissions to set minimum wages by industry, inspired by earlier legislation in Australia, New Zealand, and the United Kingdom.
Advocates argued that women had limited bargaining power and that minimum wages would prevent exploitation by “parasitic” employers who paid subsistence wages.
They believed that fair wages would promote the health and well-being of workers and, by extension, future generations.
Critics from the marginalist economic tradition warned that minimum wages could lead to reduced employment, as businesses might hire fewer workers if forced to pay higher wages.
Minimum wage laws faced continuous legal challenges.
While some state supreme courts upheld them, the U.S. Supreme Court declared the District of Columbia’s minimum wage law unconstitutional in Adkins v. Children’s Hospital (1923), reinforcing the doctrine of freedom of contract.
Despite this setback, several states continued to pass and enforce minimum wage laws throughout the 1920s and 1930s, albeit with limited enforcement capabilities.
In Morehead v. New York ex rel. Tipaldo (1936), the Supreme Court struck down New York’s minimum wage law.
However, a significant shift occurred in West Coast Hotel v. Parrish (1937), when the Court upheld Washington state’s minimum wage law.
The majority recognized that women were particularly vulnerable to exploitation and that inadequate wages had broader social implications, such as burdening the community with the support of underpaid workers.
This landmark decision reversed previous interpretations and opened the door for more comprehensive minimum wage legislation across the country. States quickly enacted new laws for women and children, and the foundation was laid for future federal minimum wage standards.
West Coast Hotel v. Parrish is interesting because the weekly pay was set at $14.50 per week of 48 hours or 30.2¢ per hour, higher than what the Minimum Wage Rate of 1938 would ultimately end up being set at.
And so I’m not sure if other states also had higher rates prior to 1938.
Why was the Minimum Wage Rate Set to 25¢ per hour rather than 40¢ in 1938?
President Franklin Roosevelt’s New Deal introduced the National Industrial Recovery Act (NIRA) of 1933, encouraging industries to adopt codes that included labor standards.
However, the Supreme Court struck down the NIRA codes in 1935, prompting the need for a constitutional federal minimum wage law.
In 1937, the Roosevelt administration proposed the Fair Labor Standards Act (FLSA), initially specifying a 40-cent per hour minimum wage.
This rate was significantly higher than both the estimated living wage and the prevailing wages in many industries, especially in the Southern states.
Nearly half of all Southern manufacturing workers earned less than 40 cents per hour in 1937.
Southern legislators vehemently opposed the 40-cent rate, fearing it would harm their regional economies by increasing labor costs, leading to unemployment, and putting Southern industries at a competitive disadvantage compared to the North.
The opposition from Southern Democrats was strong enough to stall the bill in Congress.
To ensure the legislation’s passage, a compromise was necessary.
The final version of the FLSA phased in the minimum wage starting at 25 cents per hour in October 1938, increasing to 30 cents in October 1939.
Industry Committees were given the discretion to raise it up to 40 cents per hour between 1940 and 1945. This gradual approach was designed to mitigate the economic impact on low-wage regions and industries, particularly in the South.
Setting the initial minimum wage at 25 cents per hour instead of 40 cents was a strategic decision to secure enough political support for the Act.
It addressed the concerns of Southern legislators by allowing their economies time to adjust to the new wage standards without immediate disruption.
The lower initial rate facilitated the bill’s passage by balancing the goal of improving workers’ wages with the practical need to accommodate regional economic disparities and political realities.
And to give you better idea on the vastly different wage rates in different parts of the county, the table below shows the average entrance wages for common labourers in cents per hour by state in 1935:
Special thanks to Datawrapper for the tools to create the maps and BLS Inflation Calculator.
Hope you enjoyed this brief history lesson in the US minimum wage. It was lot more complicated than I had originally thought.
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