The Minimum Wage in Historical Perspective: Progressive Reformers and the Constitutional Jurisprudence of "Liberty of Contract"

During the Progressive period of American history the debate over the minimum wage was often between those who clung to traditional economic theory as a reason for not having a minimum wage and those who saw the efficiency-wage benefits of adopting one. Although the latter argument proved quite effective in swaying many state legislatures, it may have also been a strategic argument for circumventing the Supreme Court's particular understanding of "liberty of contract." Under this doctrine, states could not pass any type of legislation that would interfere with the liberty of contract unless a compelling case could be made that such a wage would definitely serve the larger public interest. This paper argues that as much as efficiency-wage arguments might have been appealing, which no doubt appealed some reformers' sense of justice, they were ultimately employed as a disingenuous means by which "liberty of contract" arguments could be circumvented.