The following I copied from today's "THe Writer's Almanac" by Garrison Keillor:
It was on this day in 1914 that Henry Ford announced that he would pay his workers $5 for an eight-hour workday, up from an average of $2.34 for a nine-hour workday. This announcement was met with disbelief and criticism. The financial editor of the New York Times ran into the newsroom and said in a whisper: “He’s crazy, isn’t he? Don’t you think he’s crazy?” The Wall Street Journal accused Ford of bringing “biblical or spiritual principles into a field where they do not belong.” People were convinced that Ford would go bankrupt, and that the city of Detroit would collapse.
James Couzens, a Ford executive, said: “We want those who have helped us to produce this great institution and are helping to maintain it to share our prosperity.” However, Ford’s decision was primarily an economic one. He was experiencing high turnover rates, and on any given day 10 percent of the workforce didn’t show up. Men would sometimes walk away midday when they were sick of the job, which halted the entire assembly line. Ford identified two main reasons for his labor changes: he wanted to retain good workers who were invested in the company, and he wanted his workers to earn enough that they could buy their own automobiles.
Ford had built all sorts of strict rules into his plan; in order to earn the full five dollars a day, the men had to be sober, clean, not gamble or abuse their families, learn English (if they were immigrants), contribute to a savings account, and their wives could not work outside the home. A committee would visit employees’ homes to make sure they were following the rules. Despite these conditions, on January 12th, when the pay increase took effect, an estimated 12,000 job seekers waited in line outside the Ford plant ... despite the fact that it was close to zero degrees in Detroit that day.
Ford’s big idea paid off. Not only did turnover and truancy drop drastically, but between 1914 and 1916, the company’s profits also doubled from $30 million to $60 million.
He rewarded people for productive work.
Fast forward to today and our "give-away" government policies AKA welfare and look at Detroit today.
What is wrong with requiring people to work for sustenance?
To err is human...to forgive is devine.
Dave, do I have to spell it out for you ?
In spite of the cutesy spin, all men are NOT created equal. Some have drive and a sense of personal responsibility. Others are just plain parasites.
Pretty simple, if we just accept reality AS reality.
There was a program on public TV last night covering Henry's life from birth to death. This part of his life was certainly covered. It was said that all went well with the $5.00 a day pay until 1929 when Wall Street fell. Then, a day later, a third of all unemployed men on the street at soup lines were said to have been Ford employees. The show did paint Henry in some what of a bad light, focusing at times on his cruelty to Jews and immigrants. Although the show seemed to have the auditory facts correct, the visual facts left a little to be desired. Pictures of the wrong year Model T's were shown when the auditory facts said they were other year models. I think the program was called The American Experience.
I think, that it is quite possible that the $5 a day wage, was what helped make the middle class in America.
The benefits were almost immediate. Productivity surged, and the Ford Motor Co. doubled its profits in less than two years. Ford ended up calling it the best cost-cutting move he ever made.
It's widely believed that Henry Ford also upped wages to expand his market — paying employees enough to buy the cars they made. While that wasn't Ford's main motivation, it was a welcome byproduct, and a game changer, says University of California, Berkeley, labor economist Harley Shaiken.
"What that gave us was an industrial middle class, and an economy that was driven by consumer demand," Shaiken says.
The American Experience is an excellent series, but using pictures of the wrong year cars happens there and in a lot of other documentaries. I suspect the reasons are a shortage of the right pictures and/or a lack of attention to detail. The folks making the films are not usually specialists in Model T's or other old cars, and are not attuned to the differences we all notice.
As mentioned above, the workday was also shortened to 8 hours allowing the plants to run 3 shifts, 24 hours a day, thus also increasing production.
"James Couzens, a Ford executive, said: “We want those who have helped us to produce this great institution and are helping to maintain it to share our prosperity.”"
He wasn't talking about the share holders or the CEO. In todays business world this would never be said.
There's an old saying.."take care of those who take care of you"....too bad it isn't adhered to very much.
I brought up this example to my own employer. He said he would gladly pay me $5.00 a day.
Raise the wage and trained people would tend not to leave.(Lower operating costs). Shorten the work day from 9 to 8 hrs and you can now have 3 8 hour shifts keeping the factory open 24 hrs around the clock instead of a 6 hr "layover". Toss in a bit of spin and the whole thing comes out as a + in the public's eye. HF was not the Pope but was a good business man.
Years ago, on long time and very old Ford employee told me that $5 had strings attached.
He said he worked for $5 a day until 1933 and he didn't get a pay raise all that time.
If you had so many sick days or other absences, you never got the pay difference, which came as a bonus at the end of each year.
Yeah......and as long as his $5 a day employees danced to Henry's "Little Red Book".