MINIMUM WAGE. A wage-rate fixed either by collective agreement, or (more commonly) by legal enactment, or by some other means, as the lowest wage payable to workers either gen erally or in a particular craft or grade. The phrase is most fre quently used in connection with the various minimum wage laws passed by numerous countries in recent years, and especially in Australia and Great Britain. But it has no necessary reference to a legal minimum; and the phrase is also used to describe wages arrived at by collective bargaining. These other uses, however, raise no special problem and this article is concerned with the discussion of the legal minimum wage.
The idea of enforcing a legal minimum wage is closely bound up with the idea that society has certain obligations to safeguard the life-standard of its members. "Free" contract, without State interference, has been, under capitalism, the normal method of determining the conditions of employment, but exceptions to this rule are more and more widely recognized. Just as one country after another has been driven, by the hard compulsion of facts, to build up a system of factory and similar legislation for the purpose of preventing inhuman and anti-social conditions of em ployment, so the evil of "sweated labour" has compelled them to legislate for the enforcement of minimum wage-rates. Great progress has been made towards the laying down of minimum wage-rates in the United States under the "New Deal", and France in the years 1936-8 also moved towards a system of state regulation of wages under the Matignon Agreements and the laws based upon them.
While this has been the outstanding motive behind legislation for the enforcement of a minimum wage, it has in certain cases been intertwined with another—that of checking the development of strikes and industrial unrest. In Australia especially the laying down of enforceable minimum rates has been often combined with the prohibition of strikes and lock-outs and the enactment of compulsory arbitration. Where this is the case the rates of wages enforced by law are in effect maximum as well as minimum rates, whereas under systems of pure minimum wage legislation there is nothing to prevent the demanding or payment of higher rates. Thus, under the British Trade Boards Acts, only pure minimum rates are prescribed, and the workers, or their trade unions, are left perfectly free to claim, and, if they think fit, strike for, higher rates. On the other hand, the rates of wages fixed by
the justices after the Black Death and in Elizabethan times began as maximum rather than minimum rates, and only came later to be minima as well as maxima. At the time of their institution, the object was to prevent, not sweating or underpayment, but the rise of wages above a conventionally accepted standard.
The Elizabethan wage legislation, which fell gradually into disuse during the 17th and i8th centuries, was finally repealed in 1813, after the weavers and other classes of workers, whose wage standards had been depressed by the Napoleonic wars and the Industrial Revolution, had vainly attempted to use it for the raising of wages by State aid. A minimum wage bill introduced by Samuel Whitbread in 1795, largely on behalf of the agricultural workers, was thrown out in face of the dominance of the ideas of free contract and the iron law of wages. Not for more than a century after Whitbread's failure was the British State to begin the direct legal regulation of wage-rates, though factory legisla tion made a timid beginning in 1819, and important truck acts, regulating the form in which wages might be paid, were passed early in the 19th century. In Great Britain, until the Trade Boards Act of 1909, the State contented itself with legislating against truck, and with the provision of purely voluntary machinery for conciliation and arbitration under such acts as the Conciliation Acts of 1867 and 1896.
Minimum Wage Acts.—The provision by law of machinery for prescribing legally enforceable minimum rates of wages began in 1896 in the Australian State of Victoria. Under the act of 1896, with later amendments, wages boards were set up in one trade after another, consisting of equal numbers of employers and workers, with an im partial chairman. These boards were given power to fix minimum rates enforceable on the employer ; and provision was made for a court of industrial appeals. South Australia followed Victoria's lead, and established boards of a broadly similar type. Other Australian States, and later the Commonwealth of Australia followed a different plan, already started by New Zealand in 1894, and introduced in varying forms the system of compulsory conciliation and arbitration, under which the rates fixed were binding on both parties, and not as minima on the employer alone.