When Harry Truman Nearly Doubled the Minimum WageRoundup
tags: minimum wage, Truman
One of the arguments against raising the federal minimum wage from $7.25 an hour today to $15 an hour over five years is that the United States has never had an increase that large. There is solid research to show that modest increases in the minimum help low-wage workers without harming low-wage employers. But there is no similarly rigorous research on the effects of large increases.
There is, however, the example of 1950, when the minimum wage went from 40 cents an hour to 75 cents an hour, an increase of 87.5 percent.
The entire raise took effect on Jan. 25, 1950, just 90 days after the passage of the law that authorized it. Some 1.5 million workers saw their wages rise.
What happened then? Data sources from that era do not allow for the kinds of analyses that economists have used to evaluate the impact of more recent minimum wage increases. Moreover, in 1950, several industries were still exempt from having to pay the minimum wage, so direct comparisons between then and now are not feasible.
But this much is known: In December 1949, the month before the raise kicked in, the national unemployment rate was 6.6 percent. By December 1950, when the 75-cent minimum had been in place for nearly a year, it had fallen to 4.3 percent. By December 1951, it was 3.1 percent and by December 1952, it was 2.7 percent....
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