And another one bites the dust

Apparently some Lefties are lionising Henry Ford - of all people - on the grounds that back in 1914 he doubled his workers' wages to $5 a day so that they, themselves, could afford his cars.  Donald Boudreaux runs over this nonsense and squashes it flat, not in his car but in a letter to The Los Angelese Times reprinted at Cafe Hayek.  In doing so, he also points us to our very own Tim Worstall writing on the subject recently at The Adam Smith Institute.

Between them, they point out that in 1914, Ford employed 14,000 staff whilst his production was 170,000 cars per year, so hoping his employees would buy his cars was marginal.  Actually, Ford had huge problems with an excessive turnover in staff which was costing him in constant re-training and this was the main motive for the pay rise which in fact was not as straighforward  as it might appear.  Most of it was in the form of a bonus which was earned not so much on the shop floor but by the behaviour of his workers at home!  To earn it they had to live respectable lives and foreign immigrants had to learn English and the American way of life, as Tim Worstall quotes from the Michigan Historical Society:

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. 

If Lefties want to use Ford's example in support of things like increasing the minimum wage they should be careful what they wish for! 

 

Comments

[dearieme]

Almost everything that Americans commonly believe about their history is codswallop; why should Henry Ford be an exception?

[David Duff]

I suppose so, but I wonder what you make of the historical spat in the post below?