Friday, June 28, 2013

The FLSA at 75

On June 25, 2013, we saw the 75th anniversary of the Fair Labor Standards Act ( FLSA ), a landmark piece of legislation signed by President Roosevelt in 1938. What did it do? Basically, it outlawed "oppressive child labor", imposed a federal minimum wage of 25 cents an hour, and limited work hours to 40 a week. A diamond jubilee later, we look into how well the FLSA in currently working.

Turn the clock back to 1938. Child labor is rampant, worker rights are being abused and conditions are terrible, and America still finds itself mired in one of the greatest economic collapses in history. This law was necessary to restore some sort of stability to the industry, but now it is not so favored among employers and employees alike.

On the employee side, the minimum wage of $7.25 per hour is viewed as inadequate and insufficient for workers to escape the poverty level. Particularly galling to employee advocates is the "tipped minium wage" for restaurant waiters that is only $2.13 per hour in many states.

On the employer side, employees are being overworked ( over 40 hours ), with the misconception that if white-collar employees are paid a salary, then the 'overtime' rule does not apply. This has led to hundreds of FLSA cases and tens of millions of dollars of losses to companies.

But let me get to my real point - Child labor. A flurry of similar legislation in the 1930s helped almost completely get rid of this menace in the United States, but it wasn't just about the law - It was more about how well they enforced. Developing countries could do well to take after the US's war against child labor and poverty in the 1930's. With child labor still a prominent issue around the world, law enforcement, education, and alternative income are the most important things at hand right now.

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