Henry Ford’s Revolution for the Worker
 | | Ford around 1919. | | (LIBRARY OF CONGRESS) |
Come Christmas 1913, Henry Ford had a problem. His introduction of the automated assembly line that year had enabled him to turn out a Model T every 24 seconds, but the overall productivity per worker wasn’t much better than the very first year Model Ts were made. He sent his labor expert, John Lee, to find out why. What Lee discovered seems obvious in retrospect: The men hated the repetitive assembly-line work. Absenteeism had reached 10 percent a day, and turnover had climbed to 370 percent. Put simply, though Ford had invented a model of organizational efficiency, he had ignored a main factor: his human employees. As the year ended and a new one began in snowy Detroit, he mulled over a plan that would remedy the situation and satisfy his moral principles.
On January 5, 1914, the Ford Motor Company announced what one Ford biographer called “the most advanced labor policy in the world.” One week hence the automaker would establish a minimum wage of $5 a day, twice the industry standard. But in the frenzy that followed, few noticed the fine print. Ford would indeed improve the lives of thousands with increased wages, but not before they conformed to his social ideals.
When Ford thought about Lee’s findings in late December, an incident earlier in the year began to make sense. On a tour of the Highland Park plant just outside Detroit, he had seen two workers get into a fistfight. Ford’s embarrassment had turned to dismay when he realized that his men were discontented enough to become violent. Those two men were on his mind at a director’s meeting in the first days of January 1914. With the United States in the midst of a depression, the company had had a net income of more than $27 million and paid dividends of over $5 million in the previous year. As the discussion turned to projected expenditures for 1914, Ford began scrawling wage figures on a blackboard. He started with $2.34, the current base pay. The directors all agreed it could be increased. He calculated what $3 a day would cost, then $3.50, then $3.75, and on up to $4.75. Finally, as legend goes, his financial manager, James Couzens, dared him to raise it to $5. He did.
The high figure met with some resistance that day, but when the directors met again on January 5, everyone had warmed to the idea. According to the minutes, “The plan was gone over at considerable length,” after which the directors unanimously approved it. The company invited reporters from three local papers to the factory that very day for an announcement. As Ford gazed out Couzens’s office window, the reporters gathered behind him. Couzens read from a two-page typed statement that showed the company did not mistake the scope of its undertaking.
”The Ford Motor Company, the greatest and most successful automobile manufacturing company in the world, will, on January 12, inaugurate the greatest revolution in the matter of rewards for its workers ever known in the industrial world,” he began. He explained the details: Not only would the plant switch from two nine-hour shifts to three eight-hour ones, allowing it to run around the clock, but each man over 22 would receive the minimum wage of $5 a day, and ones under 22 would qualify if they had dependents. “The commonest laborer who sweeps the floor shall receive his $5 per day,” Ford told the reporters. “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.”
The story hit Detroit newsstands late that afternoon, and by early morning the next day it topped the front page of every major paper in ecstatically hyperbolic headlines. The Michigan Manufacturer and Financial Record called Ford’s plan “the most generous stroke of policy between captain of industry and worker that the country has ever seen,” while the Toledo Blade deemed it “a lordly gift” and the New York Evening Post “a magnificent act of generosity.” One paper declared that the “World’s Economic History Has Nothing Equal to Ford Plan.”
The publicity turned Ford into a national celebrity overnight. After 1914 his company would spend almost nothing on advertising; it got all the free press it needed. The $5-a-day wage announcement lit a halo above Ford’s head—he was now the millionaire folk hero, the unassuming champion of the laborer—that he burnished with homespun comments like “I believe it is a disgrace for a man to die rich.”
Even before the story broke across the country, on January 6, a crowd began amassing outside the employment office at Highland Park. Some 10,000 gathered that day and 15,000 the next, even though the company, whose 4,000 open jobs had quickly been filled, posted no-hiring signs in three languages. The mob, many of them impoverished out-of-towners who had spent their last dollar getting to Detroit, kept warm in the zero-degree weather by binding blankets and newspapers around themselves with twine and gathering around trash-can fires.
The atmosphere turned from convivial to menacing as the days passed. On January 12 the men pushed through a wooden barrier and barred employees from entering the factory. Police finally took control by turning a fire hose on the crowd. The water immediately froze the men’s clothes, and they dispersed to thaw out. The Ford company nonetheless received 14,000 job-application letters in the week after the announcement, and two months later it was still getting 500 a day.
Local business leaders had not liked the influx of unemployed men; in fact businessmen were the plan’s most vocal detractors. Other automakers resented Ford’s setting a standard they couldn’t meet and wondered if he wanted only to drive them all out of business. The Wall Street Journal gave scathing voice to the business world’s fear: ”To inject millions into a company’s factory, and to double the minimum wage, without regard to length of service, is to apply Biblical or spiritual principles into a field where they do not belong. [Ford] in his social endeavor has committed economic blunders, if not crimes. They may return to plague him and the industry he represents as well as organized society.” Ford was accused of being “a traitor to his class” and raising wages as a public-relations stunt.
In fact, the mystique surrounding Henry Ford makes it difficult to pinpoint his true motivations, but the plan benefited the company in many ways. In addition to motivating his workers, Ford was, by giving his employees more disposable income (or any at all), also creating a consumer base for his product. He later claimed that with the $5 day “we really started our business, for on that day we first created a lot of customers.” But he was also influenced by the Progressive and populist movements and may truly have been animated by generosity. “Our company is making enough money to do some good in the world,” he said, “and I’m glad to do it.”
Still, his generosity, it soon emerged, came with strings. What few noticed on January 5 was that workers did not automatically qualify for the raise just by doing their jobs. Women, who had been earning on average $2.04 per day, did not qualify at all. “I consider women only a temporary factor in industry,” Ford explained. “I pay our women well so they can dress attractively and get married.” Men would have to live in Detroit and work at the plant for six months before they could earn the full amount.
Even then they had to meet Ford’s social standards to benefit. He shared the worry of many of the wealthy that laborers would squander their enlarged paychecks on vice and cheap thrills. Lee explained that the money might “work a tremendous handicap along the paths of rectitude and right living and would make of them a menace to society, and so it was established at [the] start that no man was to receive the money who could not use it advisedly and conservatively.”
To determine who was worthy, Ford expanded the company’s Sociological Department, set up in 1913. One-hundred fifty investigators visited employees’ homes and questioned them about everything from their marital status to their savings, health, hobbies, and child care. Excessive drinking, gambling, buying on credit, a dirty home, and an unwholesome diet were all grounds for probation; if a worker hadn’t cleaned up his act in six months, not only did he not earn his $5 a day, he was fired.
The man who had engineered the assembly line was now trying to engineer his employees’ private lives. “We want to make men in this factory as well as automobiles.” he said. The Sociological Department, which resembled contemporaneous Progressive experiments like the Urban League, was at bottom a reflection of the Victorian strictures under which Ford had been raised. Critics decried the company’s intrusion into its workers’ home lives. “The payment of good wages does not give an employer the authority to seek to regulate the internal family affairs of any man,” ran an editorial in the St. Albans, Vermont, Messenger. Finally, sick of the criticism, Ford abolished the department in 1920.
If the workers resented the intrusion, their desire for higher wages apparently overrode their displeasure. By November, 9,200 Ford employees were earning $5 a day; by the next July, 76 percent at the Highland Park plant and 73 percent of Ford workers nationwide received the wage. (Women were included in the plan in 1916.) Absenteeism fell, while the number of cars produced per worker rose.
Ford called the $5 day “one of the finest cost-cutting moves we ever made,” but it is impossible to isolate its effects from those of the other benefits implemented that year—sick leave, a company bank, free lawyers, medical care, and the extension of lunchtime from 15 to 20 minutes—or from the inflation and labor demands of World War I, which began that November. By the time the United States entered World War I, three years later, the $5 day was commonplace across industry, but to those at Ford who first qualified in 1914 it was a godsend. One Highland Park employee was even moved to pen a poem in celebration:
Nothing to worry about when rent day comes,
Nothing but good clothes to wear.
Sorry are we for the poor devils who
Cannot our good luck share.
—Christine Gibson is a former editor at American Heritage magazine.
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