Microsoft Corporation (NASDAQ:MSFT) generated $7.5 million in annual revenue the year before the PC. That number would grow nearly 20 times larger, to $140 million, by the time Windows 1.0 launched in 1985. Microsoft Corporation (NASDAQ:MSFT) had less reason to issue shares than 3M Co (NYSE:MMM), as it had always been phenomenally profitable, but Gates understood the importance of luring top talent with equity in his fast-growing company. The incorporation in Washington (it would later reincorporate in Delaware) helped advance that goal extraordinarily well; one Seattle-based economist would later estimate that approximately 10,000 Microsoft Corporation (NASDAQ:MSFT) employees became millionaires by the time the company’s stock peaked in 1999. Not all of them had been with Microsoft Corporation (NASDAQ:MSFT) since its private days, but it’s safe to assume that most of its roughly 1,400 full-time employees in 1986 were quite richly compensated with Microsoft Corporation (NASDAQ:MSFT)’s stock growth.
A new (minimum) deal for American workers
President Franklin D. Roosevelt signed the Fair Labor Standards Act, or FLSA, into law on June 25, 1938. It was the last major element in Roosevelt’s prewar New Deal era, and it became the first law to impose minimum-wage standards that withstood the judgment of the Supreme Court. Several earlier state and national minimum-wage laws had fallen before the Supreme Court in the preceding two decades, including one made law during Roosevelt’s first year in office. This law, to hold up, had to be both legally impeccable and backed by one of the strongest publicity campaigns of Roosevelt’s four-term tenure.
Roosevelt had campaigned ferociously for the bill, both during and after the election. Its first draft arrived in the Capitol with a message that all of America’s “able-bodied working men and women [should receive] a fair day’s pay for a fair day’s work.” This effort wound up watered down from $0.40 an hour and 40 hours a week, but it still couldn’t pass the House before its summer recess. Roosevelt pushed forward in the fall with a tighter message, railing against “the exploitation of child labor and the undercutting of wages and the stretching of the hours of the poorest paid workers in periods of business recession.” Despite congressional opposition, public-opinion polls showed strong backing for the President: One conducted in early 1938 found that a full two-thirds of the national populace supported minimum-wage standards.
The FLSA, in order to withstand Court scrutiny, initially applied to only a fifth of the nation’s workforce. It set the minimum wage at $0.25 per hour and restricted the workweek to 44 hours. However, the FLSA also benefited from the infamous “switch in time” that led to the Court’s liberalization on labor issues following Roosevelt’s threat to pack the court with additional liberal justices after his landslide 1936 electoral victory. Without this combination of restricted impact and liberalized attitudes in the Supreme Court, the FLSA might not have withstood scrutiny. Even so, Roosevelt acted quickly to avoid a pocket veto, and the act was signed in a massive wave of 121 bills nine days after the start of Congress’ 1938 recess.
The minimum wage has been raised many times since 1938. It was at its absolute highest on an inflation-adjusted basis in 1968, when the hourly minimum wage of $1.60 was equivalent to more than $10 an hour in present-day terms, or 90% of the federal poverty level. In 2007, Congress finally gave states the power to establish their own minimum-wage laws at higher rates than those imposed by federal law. Nine states have taken advantage of this freedom to raise their statewide minimum wage past the present federal level of $7.25 per hour.
The article Warren Buffett Gives It Away originally appeared on Fool.com is written by Alex Planes.
Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more insight into markets, history, and technology.The Motley Fool recommends 3M and Berkshire Hathaway. The Motley Fool owns shares of Berkshire Hathaway, International Business Machines, and Microsoft.
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