Ford can't sustain its workforce
This isn't how communities are stabilized. It's how they're eviscerated.
There was a time when Ford took a diametrically opposite approach to its workers, a trailblazing recognition that well-paid employees make for a more stable and productive company.
Those days are gone. But it's worth one last look in the rear-view mirror to see if any lessons can be learned as Ford and other automakers adjust to a new world order.
"The idea of treating workers better is still very much relevant today," said Howard Segal, a history professor at the University of Maine and author of "Recasting the Machine Age: Henry Ford's Village Industries."
"Henry Ford understood this," he said. "He knew that you have to make workers feel appreciated if you want a stable workforce."
As 1913 was drawing to a close, though, Ford was troubled. His introduction of the assembly line had allowed his namesake firm to crank out Model T cars every
24 seconds. But employee absenteeism was running about 10 percent a day, turnover was soaring and productivity was lagging.
Ford needed a way to attract the best workers and keep them steadily on the payroll, which in turn would improve the quality of his vehicles and thus increase market share.
His solution: In January 1914, Ford introduced a minimum wage of $5 a day, or about twice what other automakers were offering.
"The commonest laborer who sweeps the floor shall receive his $5 per day," Ford explained at the time. "We believe in making 20,000 men prosperous and contented rather than follow the plan of making a few slave drivers in our establishment millionaires."
He also believed in messing with people's lives through what Ford Motor Co.
called its Sociological Department. This was a team of investigators who visited workers' homes to ensure that they were living the sort of upright lifestyles that Henry Ford approved of.
Unless the Sociological Department signed off on a worker's moral qualifications, that $5 daily wage would remain out of reach.
David Gartman, a sociology professor at the University of South Alabama who has studied the auto industry, noted that Ford's workforce at this time was comprised largely of immigrants.
"Ford was concerned that just throwing money at people wouldn't do the trick,"
he said. "He wanted to introduce them to the American way of life -- buying houses, buying cars, taking care of their families. This in turn would tie them more tightly to the workplace."
Ultimately, he and other academics say that Ford was acting primarily out of economic self-interest when he doubled the pay of virtually his entire workforce.
They argue that stability for both employees and their employer comes only when both sides prosper. This creates a sense of mutual respect and a shared commitment to facing whatever challenges may come.
"The $5 minimum wage was a moment of real innovation," said Thomas Sugrue, a professor of history and sociology at the University of Pennsylvania who has written extensively about the auto industry.
"Ford created a stable, loyal workforce by paying more than a living wage to employees," he said. "This benefited the company but it also transformed the lives of working-class folk."
On the other hand, the $5 wage ended up going only part way toward achieving its goals. What Ford hadn't also addressed was the way his assembly lines had changed the workplace.
"It was brutal," said Segal at the University of Maine. "You were literally a cog in a machine. After a few years, Ford discovered that $5 a day would get people through the door, but it didn't guarantee a happy workforce."
Labor upheaval and unionization would gradually follow, accompanied by a shifting of the industry's focus away from employee well-being and toward increased automation.
"Since the 1950s, there's been very little innovation on the human-capital side," noted Sugrue at the University of Pennsylvania, "and it's hard to imagine it ever happening again."