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by hadlock 449 days ago
I don't think he did it out of the goodness of his heart, the calculus just happened to work out in favor of the worker in this singular case. With large factories you have training costs, retention costs etc. Paying higher than the going rate meant you had higher quality workers because you could select the best ones from a larger pool. This caused manufacturing defects to go down and remanufacturing costs (extremely expensive) to shrink. Paying more for better workers reduced costs. Limiting hours worked per week reduced costs as well as those workers made fewer mistakes reducing remanufacturing/rework costs. Stable employment, good wages and short(ish) work weeks resulted in worker retention going way way up which meant less churn, less training expenses etc.

TL;DR Henry Ford realized car manufacturing was a semi-skilled job, not an unskilled job, and hired and paid for it accordingly, quality went up and costs went down. It's not rocket science.

3 comments

> I don't think he did it out of the goodness of his heart, the calculus just happened to work out in favor of the worker in this singular case

It wasn't a singular case.

He was principled enough about it that Dodge sued to compel him to put shareholders' interests ahead of employees and customers-- a suit Ford fought against, and lost.

>I don't think he did it out of the goodness of his heart

Not sure why that matters. Enjoy your 40 hour work week 100 years later.

Not just "in this singular case". I don't think Ford's assembly lines needed uniquely skilled people; most assembly line work would be the same, with the same calculus.

And the calculus was not just "the most skilled workers". It was also "diminishing returns".