The Weekly Quill — Make Labor Day Great Again
“It is not the employer who pays the wages. Employers only handle the money. It is the customer who pays the wages.”
Henry Ford
The good news was productivity was roaring. What had taken 12.5 hours to build now took 93 minutes. The bad news: Workers wanted no party of this miracle. The year was 1913. Turnover at Ford Motor Corporation was rife. At 370%, each assembly line position saw more than three individuals cycle through in a calendar year. Such was the mind-numbing and physically grueling nature of rote. To Henry Ford, the solution was simple. And so, he doubled his employees pay to $5 a day while cutting their workday to eight hours from nine. To his benefit, the two-shift capacity became three. Within a year, turnover had collapsed to 16%. Throughput, meanwhile, jumped by 40%. In 1919, as the Roaring Twenties beckoned, a Model T that had once fetched an $800 price now cost only $350.??
To Henry Ford’s way of thinking, “We believe in making 20,000 employees prosperous and contented rather than just making a few of our executives millionaires.”?
George Pullman did not share Ford’s philosophy: “You give workers only as much as they basically need to survive. Thriving is something that management should do and that workers don’t have a right to do.” Following the depression of 1893, Pullman cut already low workers’ wages by 25% but did not reduce rents in its company town near Chicago. Starvation threatened many a family. The strike that followed the following summer was “resolved” when federal troops intervened, killing 30 men and wounding 57. As a conciliatory gesture, President Grover Cleveland designated Labor Day a federal holiday.
Danielle DiMartino Booth is founder and Chief Strategist at?Quill Intelligence
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Financial Advisor - Stifel
2 年Good article - what company is willing to follow Ford now?
Founding Principal at Tannh?user Financial
2 年It’s about that time again… https://mises.org/library/markets-not-unions-gave-us-leisure