Henry Ford Did NOT Pay His Workers High Wages So They Could Buy His Cars
by John Spritzler
March 1, 2020
The URL of this article for sharing it is https://www.pdrboston.org/henry-ford-s-high-wages-explained
[Please also read, "Universal Basic Income: a Trap!"]
Forbes Magazine has an article online here titled "The Story of Henry Ford's $5 a Day Wages: It's Not What You Think." This article explains in some detail exactly why Henry Ford paid his workers a wage higher than other employers were paying. I encourage you to read the Forbes article first, before continuing to read what I write below.
Yes, Henry Ford paid his workers more than other employers. No, Ford didn't do this to enable his workers to buy his automobiles. Ford did it to REDUCE his labor costs. Read this Forbes article to understand this key fact.
Henry Ford's problem was high turnover--his employees quit after working only a short time, often causing the assembly line to shut down, and also resulting in too many of his workers being new and untrained and not yet profitable to employ. Ford needed to induce his employees to stay on the job long term; he did this by making the pay at the Ford Motor Company be higher than other employers were paying.
But note this important fact, which the Forbes article points out. Henry Ford needed his wage to be higher than other employers' wages; he did NOT need his employees to be highly paid per se. In other words, Ford needed all other employers to be paying LOWER wages than he was paying. This means that Ford would NOT have wanted other employers to also pay a higher wage. Ford would NOT have wanted there to be a minimum wage that would force other employers to pay the same wage that he was paying. Had there been a minimum wage law then, Ford would have wanted it to be as LOW as possible. ALL the capitalists, for this same reason, want the minimum wage today to be as LOW as possible (without, of course, provoking a revolution). And they are indeed correct in thinking this is in their class interest.
The moral of this story is that--contrary to the urban legend that says Ford raised his wage so that his workers could buy his cars, and hence contrary to the wrong notion that the interests of the capitalist class are really the same as those of the working class, and hence contrary to the wrong notion that the way to get improvements such as higher wages or better health care availability, etc. for working class people is by EXPLAINING to supposedly stupid capitalists why they need to pay their workers more so their workers will be able to buy their product--the only way working class people can win improvements for working class people is by FORCING capitalists to do what they otherwise have no interest in doing.
The false urban legend about Henry Ford is designed to obscure the moral of this story. It is designed to prevent people from understanding the need for an egalitarian revolution.