Industry and Labor Under the Wage-Hour Act

Report Outline
Putting the Law into Effect
Coordination of State and Federal Laws
The Constitutionality of Labor Standards Legislation
Criticisms and Disputed Interpretations of the Act

Putting the Law into Effect

Reports of the first week under the Fair Labor Standards act of 1938, which went into effect on October 24, indicate that its immediate results were considerably less far reaching than bad been anticipated in many quarters. In a few industries, notably pecan-shelling, tobacco-stemming, and lumber manufacturing in the South, there were extensive layoffs of employees, but the total number is small compared with the generally accepted estimate of 11,000,000 workers who are covered by the provisions of the new law.

A compilation of average weekly earnings in manufacturing industries prepared by the Department of Labor shows that the average in every state during the month of August was higher than the present legal minimum. It seems probable that the estimates of Administrator Andrews of the newly created Wage and Hour division of the Department of Labor that 1,500,000 employees would benefit immediately from the maximum hour provisions, and 750,000 from the minimum wage provisions, were too high. The real effectiveness of the law will be felt much more widely next year when weekly hours are shortened to 42 and the minimum wage raised to 30 cents an hour. When the 40-hour week becomes the standard in 1940, and the minimum wage is 40 cents an hour in 1945 or before if recommended by industry committees, millions of workers will be directly affected.

In the meantime, the chief source of confusion created by the act is uncertainty as to which industries are subject to its provisions. The Administrator is given no discretion to decide this and other disputed points, which cannot be authoritatively clarified until test cases have been ruled upon by the Supreme Court. Employee suits will undoubtedly be brought in numerous cases involving a question as to whether a particular business is or is not engaged in interstate commerce.