Henry Ford

In 1914, Henry Ford made a big announcement that shocked the country. 

 

That morning, Ford would begin paying his employees $5.00 a day, over twice the average wage for automakers in 1914.

In addition, he was reducing the work day from 9 hours to 8 hours, a significant drop from the 60-hour work week that was the standard in American manufacturing.

Ford believed he was buying higher quality work from all his employees. "If the floor sweeper's heart is in his job he can save us five dollars a day by picking up small tools instead of sweeping them out."

Higher wages were necessary, Ford realized, to retain workers who could handle the pressure and the monotony of his assembly line.

In 1919, Ford raised his minimum wage again, this time to $6.00 a day. Ford said "The payment of five dollars a day for an eight-hour day was one of the finest cost-cutting moves we ever made, and the six-dollar-a-day wage is cheaper than the five.

In the aftermath of the stock market crash, he raised wages to $7.00 a day, hoping it would spark an economic recovery. But this time, it didn't work. The fault lay in business leaders who were "continually putting the profit motive over what he called the wage motive." "When business thought only of profit for the owners 'instead of providing goods for all,' then it frequently broke down."