In “We need Labor Day marches”, columnist Robert Reich pads a shorter version of his column appearing on his web site with the following: “Last year, Ford reinstated merit-pay raises and matching 401(k) contributions for its salaried workers, but not hourly workers – further widening the gap between the top and everyone else…
“That’s in stark contrast to Henry Ford’s decision almost a century ago to pay his hourly workers three times what the typical factory employee earned then. He was roundly criticized by other executives, but the founder of Ford Motor knew it was a cunning move. The higher wage turned Ford’s autoworkers into customers who eventually could afford to buy the Model Ts they were making.”
WATCHDOG: Growl! We agree with the thrust of the article but Robert Reich must know better and should be ashamed of himself for repeating a long standing myth about the reason for Ford’s action.
Henry Ford introduced the assembly line to the auto industry (although butchering operations at stock yards predated the innovation.) Although times were tough, factory workers were quitting after short periods of employment because they were trained to be artisans and were not prepared for the tedium of a repetitive action over the work day. Ford finally raised their pay so that the inducement was sufficient to overcome skilled workers’ distaste for the assembly line and thus stabilized his work force.
Incidentally, the assertion does not appear in the column posted at Reich’s web site. Apparently he needed to pad out the columns length for syndication purposes.