If Henry Ford Could Pay a $15 Minimum Wage 100 Years Ago, So Can We

[n2doc]

By Michael Moore

te of the Union address tonight, President Obama is going to call for a national minimum wage of $10.10. Then in their response the Republicans will say that'd be a huge disaster that would make the Washington Monument fall over, Mt. Rushmore explode, etc. But here's what neither Obama or the GOP will tell you:

One hundred years ago this month Henry Ford began paying his workers a minimum of $15 an hour! (It was $5 for an eight hour day – which would be worth $116.48 now.) That's right – in a much poorer America, one without TV, radio, phones or House of Cards on demand, Ford could afford it. In fact, Ford later said, he couldn't afford not to: "The owner, the employees, and the buying public are all one and the same, and unless an industry can so manage itself as to keep wages high and prices low it destroys itself, for otherwise it limits the number of its customers. One’s own employees ought to be one’s own best customers."

Tell THAT to anyone who says we can't afford a minimum wage of $15 here in 2014 – 100 years later, in a country about eight times as rich per person. The CEOs will scream and weep now just like they did then, and just like then they'll be wrong. Not only would it not destroy American businesses, it might be the only thing that can save them.

(To learn more about the national movement to raise the minimum wage to $15, check out 15 Now, led by Seattle's new socialist city councilwoman Kshama Sawant; support Fast Food Forward; and follow Nick Hanauer, who was one of the first investors in Amazon and says that America's real job creators are middle class workers.)

http://www.michaelmoore.com/words/mike-friends-blog/if-henry-ford-could-pay-15-minimum-wage-100-years-ago-so-can-we

[LittleBlue]

1. That's a great quote

He makes the best argument against the current move toward neo feudalism:

"The owner, the employees, and the buying public are all one and the same, and unless an industry can so manage itself as to keep wages high and prices low it destroys itself, for otherwise it limits the number of its customers. One’s own employees ought to be one’s own best customers."

Interestingly it didn't seem to hurt his wealth as he was one of the wealthiest men in American history.

[madokie]

2. No doubt in my mind they couldn't

with the obscene pay the CEO's are being paid today there is no reason not to do this. Its a no-brainer for sure

[aristocles]

3. False analogy

Ford paid what was considered a high wage for the time. Today, that $5 would be worth over $90.
There was no national minimum wage until 1938.

[ConcernedCanuk]

6. Read it again - that's $5 per DAY

.
.
.

From the OP:

(It was $5 for an eight hour day – which would be worth $116.48 now.)

CC

[Art_from_Ark]

34. If that $5 was paid in gold,

it would be worth around $300 today.

[hack89]

4. Ford was not paying minimum wages

Last edited Wed Jan 29, 2014, 01:15 PM - Edit history (1)

he was paying high wages for his time.

[geek tragedy]

5. how does that compare with auto manufacturing jobs today? nt

[SidDithers]

12. Yup. That's the key question...nt

Sid

[joeglow3]

17. Did that $15 an hour include retirement and lifetime health benefits

I honestly don't know the answer. However, people mistake an hourly wage as a total compensation package.

[madville]

7. I agree with the idea but that's a poor example

Auto manufacturers today start employees at around $15-20 an hour, pretty much the same rate Henry Ford was paying back then. So those wages have kept up with inflation.

If we are comparing past and present minimum wage jobs the should be typical minimum wage jobs. What was a fry cook making 100 years ago or a bag boy at the grocery store? Those would be good industry comparisons.

[El_Johns]

9. The *average* manufacturing wage is $19.6. That means *starting* wages are less.

http://www.tradingeconomics.com/united-states/wages-in-manufacturing

[madville]

10. Less than what?

If the average manufacturing wage is $19.60 an hour wouldn't that mean it's more than the Henry Ford example in the article.

[El_Johns]

11. Less than $20. Manufacturing starting wages are more like $12 (the new floor after the auto

bankruptcies) to maybe $18 max.

Maybe lower, looking at this:

http://online.wsj.com/news/articles/SB10001424052702304065704577421960042778548

[El_Johns]

8. Ford was the leader in the leading industry of his day; $15/hour was what the "labor aristocracy"

was making, it wasn't analogous to a "minimum wage".

[another_liberal]

13. Years later Henry Ford said . . .

Did you realize years later Henry Ford said that, due to increases in worker productivity and retention of trained employees, his raising salaries to five dollars a day was, "The greatest cost-cutting measure I ever adopted."

[aristocles]

14. Indeed, but this has nothing to do with a minimum wage

Ford simply paid skilled workers what they were worth.

[another_liberal]

29. They weren't "skilled workers."

They were merely trained men, the run-of-mill production line workforce.

[happyslug]

32. But he did not lose money training people all the time

Training takes time, and when an employee leaves, he or she takes his training with him. Ford had a problem keeping his employees. They would work for him for a couple of months, then leave for a better paying job. Job turnover was killing Ford, for every time someone left, his replacement had to be trained and that took time and money.

Thus Ford's solution to his problem of high employee turnover was to make sure no one would out bid him for those employees. Thus his offer of high wages. The reduction in down time while he trained new employees more then compensated for the high wages.

[Javaman]

15. Ford was a control freak.

While 5 bucks a day back then was fantastic almost unbelievable money it did come with a hitch. Just remember, Ford was massively anti-union. Also if one wanted that 5 bucks a day, you had to agree to a list of things such as no drinking or smoking. And also one had to have no issue with one's private life being subject to investigation by Ford.

Check out the wiki link but more over read the book "Fordlandia" for a much better picture of Mr. Fords hiring and firing practices. 5 bucks a day sounds great on the surface, but that's all it was; surface. Dig deeper for the real story.

Anyway, here's the wiki, which treats kindly...

http://en.wikipedia.org/wiki/Henry_Ford#The_five-dollar_workday

The five-dollar workday

Time Magazine, January 14, 1935.
Ford was a pioneer of "welfare capitalism", designed to improve the lot of his workers and especially to reduce the heavy turnover that had many departments hiring 300 men per year to fill 100 slots. Efficiency meant hiring and keeping the best workers.[21]

Ford astonished the world in 1914 by offering a $5 per day wage ($120 today), which more than doubled the rate of most of his workers.[22] A Cleveland, Ohio newspaper editorialized that the announcement "shot like a blinding rocket through the dark clouds of the present industrial depression."[23] The move proved extremely profitable; instead of constant turnover of employees, the best mechanics in Detroit flocked to Ford, bringing their human capital and expertise, raising productivity, and lowering training costs.[24][25] Ford announced his $5-per-day program on January 5, 1914, raising the minimum daily pay from $2.34 to $5 for qualifying workers. It also set a new, reduced workweek, although the details vary in different accounts. Ford and Crowther in 1922 described it as six 8-hour days, giving a 48-hour week,[26] while in 1926 they described it as five 8-hour days, giving a 40-hour week.[27] (Apparently the program started with Saturday being a workday and sometime later it was changed to a day off.)

Detroit was already a high-wage city, but competitors were forced to raise wages or lose their best workers.[28] Ford's policy proved, however, that paying people more would enable Ford workers to afford the cars they were producing and be good for the economy. Ford explained the policy as profit-sharing rather than wages.[29] It may have been Couzens who convinced Ford to adopt the $5 day.[30]

The profit-sharing was offered to employees who had worked at the company for six months or more, and, importantly, conducted their lives in a manner of which Ford's "Social Department" approved. They frowned on heavy drinking, gambling, and (what today are called) deadbeat dads. The Social Department used 50 investigators, plus support staff, to maintain employee standards; a large percentage of workers were able to qualify for this "profit-sharing."

Ford's incursion into his employees' private lives was highly controversial, and he soon backed off from the most intrusive aspects. By the time he wrote his 1922 memoir, he spoke of the Social Department and of the private conditions for profit-sharing in the past tense, and admitted that "paternalism has no place in industry. Welfare work that consists in prying into employees' private concerns is out of date. Men need counsel and men need help, often special help; and all this ought to be rendered for decency's sake. But the broad workable plan of investment and participation will do more to solidify industry and strengthen organization than will any social work on the outside. Without changing the principle we have changed the method of payment."[31]

[Hestia]

33. Also, he had a henchman who's crony's would go to each workers house and grade them on

sanitation, personal hygiene, whether they went to church, etc. That $5 came at a very high personal cost. I think the company still had problems with turnover after the $5 announcement.

Oh yeah, $5 wasn't starting wages, you had to work your way up to $5 which took quite awhile - 18 months (?)

Workers were not allowed to talk to each at work - at all - due to union organizing fears. Anyone who was suspected of being a union sympathizer was followed and beaten.

American Experience on PBS has a great documentary about him. http://www.pbs.org/wgbh/americanexperience/films/henryford/player/

He was a raging asshole who literally killed his son Edsel, due to making fun of him for his digestive problems when Edsel had Stage 4 stomach cancer. The best years were when Edsel ran the company after the board kicked Henry off of it - Fordlandia being a part of it - but Henry would come into the office loudly berating Edsel for having a Ivy League degree, along with other upper tier management.

http://en.wikipedia.org/wiki/Edsel_Ford

[Javaman]

35. In the book Fordlandia, they talk about how ford would berate Edsel because he wasn't "tough enough"

ford had a hatchman, that was later sent to prison for his "techniques" to keep workers in line. I can't recall his name.

[happyslug]

36. Henry Bennet never went to jail, but was fired by Henry Ford II, when he became President of Ford

http://www.fmanet.com/montart/bennett.htm

http://en.wikipedia.org/wiki/Harry_Bennett

Henry Ford II, the grandson of Henry Ford the founder of Ford Motor Company, took over the company at age 28 at the insistence of his mother. Henry Ford had left Henry Ford II's father, Edsel Ford ran Ford in the 1930s when Henry Ford's health started to fade, but died in 1943 to stomach Cancer. Henry Ford took Ford back over, but he had suffered several strokes by then and could not do the job, This was clear by 1944, so in 1945 Henry Ford named his grandson President of Ford.

Henry Ford II's first act was to fire Henry Bennett. The UAW did not like Bennett and Henry Ford II saw that as so serious a problem that it had to be solved (and Henry Ford II accepted that the UAW was there to stay, so it was Bennett who had to leave).

[Javaman]

37. That's it. Thanks for the correction.

yeah, bennett was a bastard.

[1StrongBlackMan]

16. That seems factually incorrect ...

didn't Ford pay $5.00/day?

While that was significantly more than the pay of the day, the is a heck of a difference between $5.00 and $15.00.

[whopis01]

23. The math is a little bit off, but it is close

Ford paid $5.00 /day for an 8 hour workday.

$5.00 a hundred years ago is worth $116.48 today. So if you worked an 8 hour day and received $116.48, that would be $14.56 / hour.

So, the article certainly rounded up from $14.56 to $15.00 - so Ford would have had to pay them an extra 2 cents a day to make the math come out better - but that isn't too far off.

[1StrongBlackMan]

25. So the title should read ...

"If Henry Ford could pay what would be $15/hr today ..." Or, "If Henry Ford could pay the equivalent of $15/hr ..."

[whopis01]

30. You may want to tell that to the OP.

I can't do anything about it.

[RainDog]

18. k&r n/t

[FairWinds]

19. Part of a good liberals arts . .

education is the development of critical thinking skills
(aka, a "bullshit detector) which includes
an understanding of inflation.
You can make use of an inflation calculator
(goggle the term at the Bureau of Labor Statistics).
$5 in 1914 indeed is equal in purchasing power
to $116.48 today.

[2banon]

20. OP needs a Correction. Workers were paid $5 ph, not $15! Please correct.

[brett_jv]

21. It's inflation-adjusted n/t

[2banon]

22. S/b made clear in headline, then. No?

[whopis01]

24. per day, not per hour. n/t

[2banon]

31. Thanks for that correction! Apparently I misremembered from the Documentary recently on PBS.

[Drunken Irishman]

26. Agreed. Reading that headline made me think Ford paid $15 back then.

[FarCenter]

27. How do the wages that Apple or Google pay compare with those of Henry Ford?

I'd bet that very few, if any, US employees of Apple are paid less than $10/hr.

[RainDog]

28. Apple has the worst employee:profit ratio

Like Walmart and McDonald's, Apple pays extraordinarily low wages to its store workers, an average of about $12 per hour, or $24,000 per year for a full-time employee. In-store salespeople make up about half of the total workforce.

With 80,000 worldwide employees (50,000 in the U.S.) and a 2012 profit of $55 billion ($19 billion declared in the U.S.), Apple made an astonishing $697,000 per employee in 2012 (almost $400,000 in the U.S.).

Apple, more than the other two companies discussed here, has numerous high-paying positions in engineering, design, programming, marketing, etc. Reports by two independent salary trackers indicate that the overall average salary at Apple is about $50,000. Even with this much higher figure, Apple pays its U.S. employees only $1 for every $8 in profits.

So who's the biggest wage stiffer? Apple is by far the worst in rewarding profitability. But Walmart underpays the most people, and McDonald's pays the lowest wages. For those of us who subsidize these companies with tax dollars for their employees' food stamps and Medicaid, it doesn't matter who's worse. We're all getting stiffed.

http://www.alternet.org/labor/apple-walmart-mcdonalds-whos-biggest-wage-stiffer