Minimum wage challenge: Why did Henry Ford double his employees wages?

[vinny9698]

History and facts are hard to argue against. If raising the minimum wage would bankrupt, lead to massive layoffs, how did Henry Ford's doubling his employees wages worked out?
http://corporate.ford.com/news-center/press-releases-detail/677-5-dollar-a-day
Historical proof that raising the minimum wage helps instead of hurts the economy.

I am trying to prove that raising the minimum wage is not going to bankrupt or lead to massive layoffs. That's the point I am trying to make.

[dlwickham]

1. everything I've ever read

states that he increased his employees' wages so they could afford the cars they were building

[ScreamingMeemie]

3. Me too.

He was kind of a jerk. It was not motivated out of concern for the full tummies of his employees' children.

[Behind the Aegis]

13. He was a raging anti-Semite.

The International Jew is a four volume set of booklets or pamphlets originally published and distributed in the early 1920s by Henry Ford, an American industrialist and automobile manufacturer.

In Spring 1920, Henry Ford made his personal newspaper The Dearborn Independent chronicle what he considered the "Jewish Menace". Every week for 91 issues, the paper exposed in a headline, some sort of Jewish-inspired evil major story. The most popular and aggressive stories were then chosen to be reprinted by Ford into four volumes called the "International Jew". [1]

It is to be distinguished from The International Jew: The World's Problem which was the headline in The Dearborn Independent and is the name of a collection of articles serialized in The Dearborn Independent. It is also to be distinguished from the title of the first volume of the series, namely The International Jew, The World's Foremost Problem (note the absence or presence of the word "Foremost" as the distinguishing mark in the subtitle).

more: http://en.wikipedia.org/wiki/The_International_Jew


When you have some free time, you should read it. It's a hoot (in a bad way, but it is so over the top).

[ScreamingMeemie]

22. Wow... How amazing is it that I spent 27 years living within 20 miles

of the Henry Ford Museum and Greenfield Village and this is not referenced there? Go figure.

Thanks for sharing it.

[Recursion]

26. He bankrolled the publication of the "Protocols" libel

And, on his "peace tour" in Europe blamed the continent's slow shift towards a world war on... take a quick guess who?

[bluestate10]

30. Henry Ford was a brilliant business person, but he was a corrosive ant-semite and

a big time racist. Interestingly, the industry that Ford made big, including his own named company, became the top channel for Blacks reaching the middle class.

[Taitertots]

2. Henry Ford increased wages because he couldn't get employees without doing it.

I always laugh when people (not accusing you) think Henry Ford did it for any reason other than basic economic need. As if paying people an increasing market wage is an act of benevolence.

[shraby]

10. To work at Ford motors when Henry was running it, was to lose your job if you

so much as took a half day off to go to the doctor. So many wanted to work there that he had no shortage of replacements for someone who was fired.
It was only because by paying them enough to buy his cars, he increased his profits.

Another thing that's not well known, is he sent people out to the junk yards to inspect the Fords in it. If an old Ford that was junked was there, they checked to see which parts were still good on it. That way they could figure out what parts could be made with cheaper materials so they didn't outlive the car and could save the company money at the same time.

Edited to add.

[hack89]

31. He wanted a stable and experienced labor force

Constant turnover led to quality and productivity problems that negatively impacted his profits.

[arthritisR_US]

4. To keep his labour force, turnover was too high

and productivity time would be radically reduced by his trained/repetitive workforce. Second benefit, his employees could then afford to buy his vehicles.

[leftstreet]

23. +1 The myth of happy consumers is just myth

It was the high turnover rate and cost of downed production lines

[arthritisR_US]

29. Ya, that was my understanding. I don't think he had an

altruistic bone in his body

[demosincebirth]

5. Union organizers were creeping around the corner.

[former9thward]

19. Not really.

The UAW did not try and organize at Ford until a generation later.

[demosincebirth]

25. I was not referring to the UAW

[former9thward]

28. Its telling that you don't say who you were referring to...

Or give any link. There was no union organizing at Ford during that time period.

[Major Nikon]

27. I believe this is the right answer

There may have been other reasons as well, but unionization of factory workers was alive and well at the time, particularly in that part of the country. Trade unions (skilled workers) had been around longer, but industrial workers' unions (unskilled workers) were coming into their own at the time. Textile mills and other industries were seeing massive strikes. Had Ford not raised his wages his company would have been ripe for the picking from industrial unions. By raising his wages voluntarily, Ford headed this off for many years.
http://en.wikipedia.org/wiki/Industrial_Workers_of_the_World#Organizing

[RobertEarl]

6. Too much money!!

Let's say this company has ten employees.

Now let's say they give each employee a dollar an hour raise.

That would be 10 dollars an hour more!
80 dollars a day!

Companies would go broke in a week because that would be 400 dollars a week!

<heh>

[Kingofalldems]

7. Yeah but after he gave them a raise he had to lay them off.

The republicans said so!!

[Greybnk48]

8. So his workers could afford to buy the cars they were making (his cars).

That's the story I've always heard.

[BuelahWitch]

12. Me too

He wanted his workers to buy the cars.

[1000words]

15. Same here

His employees driving around his product was good for business.

[JaneyVee]

9. Higher min wage would lead to more job openings due to people being able to

Quit their 2nd and 3rd jobs.

[patricia92243]

11. Ford paid high wages to make a market for his products. Walmart does the same.

Of course, Walmart keeps it's employees' poor so they will have to buy Walmart's junk. It is actually starting to back fire. Their employees are so poor they are going to the Dollar Store, etc.

[libdem4life]

14. Because he was a socialist?

Just in case

[JVS]

16. So that he could rule over his employees with an iron fist.

Last edited Sat Nov 9, 2013, 05:37 PM - Edit history (1)

I like good wages, but as someone whose family had a lot of people working at Ford in the middle part of the 20th century, everything I've heard from them indicates that Henry Ford was what we'd call a control freak in modern parlance. The guy had an army of spies he sent around to snoop on employees, and it wasn't just union organizers he was after. I've heard of people being fired for offenses as small as putting salt and pepper on their food before tasting it (Ford thought it was wasteful to add to the food before tasting it to see if it was seasoned enough). You can't get away with such eccentricity paying the prevailing wage, you have to offer more to keep people lined up for your antics.

[dairydog91]

18. THIS

The "5 dollar a day" wage was composed of a low base wage and a good behavior wage. If you deviated from Ford's ideas about how you should run your life, then you would be denied your good behavior wage (If not fired outright). In order to get your good behavior wage, workers had to avoid things like gambling, drinking, or allowing their wives to work. Ford would send inspectors into workers' homes to see if they were following the good behavior rules.

[JVS]

21. Exactly. If your idea of how to spend your money was buying a Ford and driving out to the country..

for some picnicking or even better some camping, Ford loved you. My grandpa's family liked to spend the weekend playing records, smoking cigarettes, and having some drinks. They made damned sure not to live in Dearborn and instead lived near Hamtramck where they were among Chevy workers and not so close to the company's eyes.

[Incitatus]

24. I don't know about the salt thing, but he had a problem if you drank or if your wife had a job

http://www.forbes.com/sites/timworstall/2012/03/04/the-story-of-henry-fords-5-a-day-wages-its-not-what-you-think/

The $5-a-day rate was about half pay and half bonus. The bonus came with character requirements and was enforced by the Socialization Organization. This was a committee that would visit the employees’ homes to ensure that they were doing things the “American way.” They were supposed to avoid social ills such as gambling and drinking. They were to learn English, and many (primarily the recent immigrants) had to attend classes to become “Americanized.” Women were not eligible for the bonus unless they were single and supporting the family. Also, men were not eligible if their wives worked outside the home.

[snagglepuss]

17. He wanted them to be able to afford his cars.

[hughee99]

20. Ford raised wages because he had to. He also didn't have to answer to shareholders

since Ford didn't go public until the 50's. Now, if a company does something that people even PERCEIVE as hurting the profitability, they'll be a sell off (for public companies), and those who are currently running the company will be at risk of losing control of it. In the end, this can result in many companies failing to do proper long-term planning at the expense of short term profits. Yes, this is greatly oversimplified and not nearly covering ALL aspects of the issue, but it is one concern.