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bad air; (8) unsuitable clothing; (9) carelessness; (10) ignorance; (11)

mental condition; (12) lack of cooperation.

 

The questions of defective structures, defective machinery, insufficient

room, unclean conditions, bad light, bad air, the wrong mental

condition, and the lack of cooperation are easily disposed of. None of

the men work too hard. The wages settle nine tenths of the mental

problems and construction gets rid of the others. We have then to guard

against unsuitable clothing, carelessness, and ignorance, and to make

everything we have fool-proof. This is more difficult where we have

belts. In all of our new construction, each machine has its individual

electric motor, but in the older construction we had to use belts. Every

belt is guarded. Over the automatic conveyors are placed bridges so that

no man has to cross at a dangerous point. Wherever there is a

possibility of flying metal, the workman is required to wear goggles and

the chances are further reduced by surrounding the machine with netting.

Around hot furnaces we have railings. There is nowhere an open part of a

machine in which clothing can be caught. All the aisles are kept clear.

The starting switches of draw presses are protected by big red tags

which have to be removed before the switch can be turned--this prevents

the machine being started thoughtlessly. Workmen will wear unsuitable

clothing--ties that may be caught in a pulley, flowing sleeves, and all

manner of unsuitable articles. The bosses have to watch for that, and

they catch most of the offenders. New machines are tested in every way

before they are permitted to be installed. As a result we have

practically no serious accidents.

 

Industry needs not exact a human toll.

 

 

CHAPTER VIII

 

WAGES

 

 

There is nothing to running a business by custom--to saying: "I pay the

going rate of wages." The same man would not so easily say: "I have

nothing better or cheaper to sell than any one has." No manufacturer in

his right mind would contend that buying only the cheapest materials is

the way to make certain of manufacturing the best article. Then why do

we hear so much talk about the "liquidation of labour" and the benefits

that will flow to the country from cutting wages--which means only the

cutting of buying power and the curtailing of the home market? What good

is industry if it be so unskillfully managed as not to return a living

to everyone concerned? No question is more important than that of

wages--most of the people of the country live on wages. The scale of

their living--the rate of their wages--determines the prosperity of the

country.

 

Throughout all the Ford industries we now have a minimum wage of six

dollars a day; we used to have a minimum of five dollars; before that we

paid whatever it was necessary to pay. It would be bad morals to go back

to the old market rate of paying--but also it would be the worst sort of

bad business.

 

First get at the relationships. It is not usual to speak of an employee

as a partner, and yet what else is he? Whenever a man finds the

management of a business too much for his own time or strength, he calls

in assistants to share the management with him. Why, then, if a man

finds the production part of a business too much for his own two hands

should he deny the title of "partner" to those who come in and help him

produce? Every business that employs more than one man is a kind of

partnership. The moment a man calls for assistance in his business--even

though the assistant be but a boy--that moment he has taken a partner.

He may himself be sole owner of the resources of the business and sole

director of its operations, but only while he remains sole manager and

sole producer can he claim complete independence. No man is independent

as long as he has to depend on another man to help him. It is a

reciprocal relation--the boss is the partner of his worker, the worker

is partner of his boss. And such being the case, it is useless for one

group or the other to assume that it is the one indispensable unit. Both

are indispensable. The one can become unduly assertive only at the

expense of the other--and eventually at its own expense as well. It is

utterly foolish for Capital or for Labour to think of themselves as

groups. They are partners. When they pull and haul against each

other--they simply injure the organization in which they are partners

and from which both draw support.

 

It ought to be the employer's ambition, as leader, to pay better wages

than any similar line of business, and it ought to be the workman's

ambition to make this possible. Of course there are men in all shops who

seem to believe that if they do their best, it will be only for the

employer's benefit--and not at all for their own. It is a pity that such

a feeling should exist. But it does exist and perhaps it has some

justification. If an employer urges men to do their best, and the men

learn after a while that their best does not bring any reward, then they

naturally drop back into "getting by." But if they see the fruits of

hard work in their pay envelope--proof that harder work means higher

pay--then also they begin to learn that they are a part of the business,

and that its success depends on them and their success depends on it.

 

"What ought the employer to pay?"--"What ought the employee to receive?"

These are but minor questions. The basic question is "What can the

business stand?" Certainly no business can stand outgo that exceeds its

income. When you pump water out of a well at a faster rate than the

water flows in, the well goes dry. And when the well runs dry, those who

depend on it go thirsty. And if, perchance, they imagine they can pump

one well dry and then jump to some other well, it is only a matter of

time when all the wells will be dry. There is now a widespread demand

for more justly divided rewards, but it must be recognized that there

are limits to rewards. The business itself sets the limits. You cannot

distribute $150,000 out of a business that brings in only $100,000. The

business limits the wages, but does anything limit the business? The

business limits itself by following bad precedents.

 

If men, instead of saying "the employer ought to do thus-and-so," would

say, "the business ought to be so stimulated and managed that it can do

thus-and-so," they would get somewhere. Because only the business can

pay wages. Certainly the employer cannot, unless the business warrants.

But if that business does warrant higher wages and the employer refuses,

what is to be done? As a rule a business means the livelihood of too

many men, to be tampered with. It is criminal to assassinate a business

to which large numbers of men have given their labours and to which they

have learned to look as their field of usefulness and their source of

livelihood. Killing the business by a strike or a lockout does not help.

The employer can gain nothing by looking over the employees and asking

himself, "How little can I get them to take?" Nor the employee by

glaring back and asking, "How much can I force him to give?" Eventually

both will have to turn to the business and ask, "How can this industry

be made safe and profitable, so that it will be able to provide a sure

and comfortable living for all of us?"

 

But by no means all employers or all employees will think straight. The

habit of acting shortsightedly is a hard one to break. What can be done?

Nothing. No rules or laws will effect the changes. But enlightened

self-interest will. It takes a little while for enlightenment to spread.

But spread it must, for the concern in which both employer and employees

work to the same end of service is bound to forge ahead in business.

 

What do we mean by high wages, anyway?

 

We mean a higher wage than was paid ten months or ten years ago. We do

not mean a higher wage than ought to be paid. Our high wages of to-day

may be low wages ten years from now.

 

If it is right for the manager of a business to try to make it pay

larger dividends, it is quite as right that he should try to make it pay

higher wages. But it is not the manager of the business who pays the

high wages. Of course, if he can and will not, then the blame is on him.

But he alone can never make high wages possible. High wages cannot be

paid unless the workmen earn them. Their labour is the productive

factor. It is not the only productive factor--poor management can waste

labour and material and nullify the efforts of labour. Labour can

nullify the results of good management. But in a partnership of skilled

management and honest labour, it is the workman who makes high wages

possible. He invests his energy and skill, and if he makes an honest,

wholehearted investment, high wages ought to be his reward. Not only has

he earned them, but he has had a big part in creating them.

 

It ought to be clear, however, that the high wage begins down in the

shop. If it is not created there it cannot get into pay envelopes. There

will never be a system invented which will do away with the necessity of

work. Nature has seen to that. Idle hands and minds were never intended

for any one of us. Work is our sanity, our self-respect, our salvation.

So far from being a curse, work is the greatest blessing. Exact social

justice flows only out of honest work. The man who contributes much

should take away much. Therefore no element of charity is present in the

paying of wages. The kind of workman who gives the business the best

that is in him is the best kind of workman a business can have. And he

cannot be expected to do this indefinitely without proper recognition of

his contribution. The man who comes to the day's job feeling that no

matter how much he may give, it will not yield him enough of a return to

keep him beyond want, is not in shape to do his day's work. He is

anxious and worried, and it all reacts to the detriment of his work.

 

But if a man feels that his day's work is not only supplying his basic

need, but is also giving him a margin of comfort and enabling him to

give his boys and girls their opportunity and his wife some pleasure in

life, then his job looks good to him and he is free to give it of his

best. This is a good thing for him and a good thing for the business.

The man who does not get a certain satisfaction out of his day's work is

losing the best part of his pay.

 

For the day's work is a great thing--a very great thing! It is at the

very foundation of the world; it is the basis of our self-respect. And

the employer ought constantly to put in a harder day's work than any of

his men. The employer who is seriously trying to do his duty in the

world must be a hard worker. He cannot say, "I have so many thousand men

working for me." The fact of the matter is that so many thousand men

have him working for them--and the better they work the busier they keep

him disposing of their products. Wages and salaries are in fixed

amounts, and this must be so, in order to have a basis to figure on.

Wages and salaries are a sort of profit-sharing fixed in advance, but it

often happens that when the business of the year is closed, it is

discovered that more can be paid. And then more ought to be paid. When

we are all in the business working together, we all ought to have some

share in the profits--by way of a good wage, or salary, or added

compensation. And that is beginning now quite generally to be

recognized.

 

There is now a definite demand that the human side of business be

elevated to a position of equal importance with the material side. And

that is going to come about. It is just a question whether it is going

to be brought about wisely--in a way that will conserve the material

side which now sustains us, or unwisely and in such a way as shall take

from us all the benefit of the work of the past years. Business

represents our national livelihood, it reflects our economic progress,

and gives us our place among other nations. We do not want to jeopardize

that. What we want is a better recognition of the human element in

business. And surely it can be achieved without dislocation, without

loss to any one, indeed with an increase of benefit to every human

being. And the secret of it all is in a recognition of human

partnership. Until each man is absolutely sufficient unto himself,

needing the services of no other human being in any capacity whatever,

we shall never get beyond the need of partnership.

 

Such are the fundamental truths of wages. They are partnership

distributions.

 

When can a wage be considered adequate? How much of a living is

reasonably to be expected from work? Have you ever considered what a

wage does or ought to do? To say that it should pay the cost of living

is to say almost nothing. The cost of living depends largely upon the

efficiency of production and transportation; and the efficiency of these

is the sum of the efficiencies of the management and the workers. Good

work, well managed, ought to result in high wages and low living costs.

If we attempt to regulate wages on living costs, we get nowhere. The

cost of living is a result and we cannot expect to keep a result

constant if we keep altering the factors which produce the result. When

we try to regulate wages according to the cost of living, we are

imitating a dog chasing his tail. And, anyhow, who is competent to say

just what kind of living we shall base the costs on? Let us broaden our

view and see what a wage is to the workmen--and what it ought to be.

 

The wage carries all the worker's obligations outside the shop; it

carries all that is necessary in the way of service and management

inside the shop. The day's productive work is the most valuable mine of

wealth that has ever been opened. Certainly it ought to bear not less

than all the worker's outside obligations. And certainly it ought to be

made to take care of the worker's sunset days when labour is no longer

possible to him--and should be no longer necessary. And if it is made to

do even these, industry will have to be adjusted to a schedule of

production, distribution, and reward, which will stop the leaks into the

pockets of men who do not assist in production. In order to create a

system which shall be as independent of the good-will of benevolent

employers as of the ill-will of selfish ones, we shall have to find a

basis in the actual facts of life itself.

 

It costs just as much physical strength to turn out a day's work when

wheat is $1 a bushel, as when wheat is $2.50 a bushel. Eggs may be 12

cents a dozen or 90 cents a dozen. What difference does it make in the

units of energy a man uses in a productive day's work? If only the man

himself were concerned, the cost of his maintenance and the profit he

ought to have would be a simple matter. But he is not just an

individual. He is a citizen, contributing to the welfare of the nation.

He is a householder. He is perhaps a father with children who must be

reared to usefulness on what he is able to earn. We must reckon with all

these facts. How are you going to figure the contribution of the home to

the day's work? You pay the man for his work, but how much does that

work owe to his home? How much to his position as a citizen? How much to

his position as a father? The man does the work in the shop, but his

wife does the work in the home. The shop must pay them both. On what

system of figuring is the home going to find its place on the cost

sheets of the day's work? Is the man's own livelihood to be regarded as

the "cost"? And is his ability to have a home and family the "profit"?

Is the profit on a day's work to be computed on a cash basis only,

measured by the amount a man has left over after his own and his

family's wants are all supplied? Or are all these relationships to be

considered strictly under head of cost, and the profit to be computed

entirely outside of them? That is, after having supported himself and

family, clothed them, housed them, educated them, given them the

privileges incident to their standard of living, ought there to be

provision made for still something more in the way of savings profit?

And are all properly chargeable to the day's work? I think they are.

Otherwise, we have the hideous prospect of little children and their

mothers being forced out to work.

 

These are questions which call for accurate observation and computation.

Perhaps there is no one item connected with our economic life that would

surprise us more than a knowledge of just what burdens the day's work.

It is perhaps possible accurately to determine--albeit with considerable

interference with the day's work itself--how much energy the day's work

takes out of a man. But it is not at all possible accurately to

determine how much it will require to put back that energy into him

against the next day's demands. Nor is it possible to determine how much

of that expended energy he will never be able to get back at all.

Economics has never yet devised a sinking fund for the replacement of

the strength of a worker. It is possible to set up a kind of sinking

fund in the form of old-age pensions. But pensions do not attend to the

profit which each day's labour ought to yield in order to take care of

all of life's overhead, of all physical losses, and of the inevitable

deterioration of the manual worker.

 

The best wages that have up to date ever been paid are not nearly as

high as they ought to be. Business is not yet sufficiently well

organized and its objectives are not yet sufficiently clear to make it

possible to pay more than a fraction of the wages that ought to be paid.

That is part of the work we have before us. It does not help toward a

solution to talk about abolishing the wage system and substituting

communal ownership. The wage system is the only one that we have, under

which contributions to production can be rewarded according to their

worth. Take away the wage measure and we shall have universal injustice.

Perfect the system and we may have universal justice.

 

I have learned through the years a good deal about wages. I believe in

the first place that, all other considerations aside, our own sales

depend in a measure upon the wages we pay. If we can distribute high

wages, then that money is going to be spent and it will serve to make

storekeepers and distributors and manufacturers and workers in other

lines more prosperous and their prosperity will be reflected in our

sales. Country-wide high wages spell country-wide prosperity, provided,

however, the higher wages are paid for higher production. Paying high

wages and lowering production is starting down the incline toward dull

business.

 

It took us some time to get our bearings on wages, and it was not until

we had gone thoroughly into production on "Model T," that it was

possible to figure out what wages ought to be. Before then we had had

some profit sharing. We had at the end of each year, for some years

past, divided a percentage of our earnings with the employees. For

instance, as long ago as 1909 we distributed eighty thousand dollars on

the basis of years of service. A one-year man received 5 per cent. of

his year's wages; a two-year man, 7-1/2 per cent., and a three-year man,

10 per cent. The objection to that plan was that it had no direct

connection with the day's work. A man did not get his share until long

after his work was done and then it came to him almost in the way of a

present. It is always unfortunate to have wages tinged with charity.

 

And then, too, the wages were not scientifically adjusted to the jobs.

The man in job "A" might get one rate and the man in job "B" a higher

rate, while as a matter of fact job "A" might require more skill or

exertion than job "B." A great deal of inequity creeps into wage rates

unless both the employer and the employee know that the rate paid has

been arrived at by something better than a guess. Therefore, starting

about 1913 we had time studies made of all the thousands of operations

in the shops. By a time study it is possible theoretically to determine

what a man's output should be. Then, making large allowances, it is

further possible to get at a satisfactory standard output for a day,

and, taking into consideration the skill, to arrive at a rate which will

express with fair accuracy the amount of skill and exertion that goes

into a job--and how much is to be expected from the man in the job in

return for the wage. Without scientific study the employer does not know

why he is paying a wage and the worker does not know why he is getting

it. On the time figures all of the jobs in our factory were standardized

and rates set.

 

We do not have piece work. Some of the men are paid by the day and some

are paid by the hour, but in practically every case there is a required

standard output below which a man is not expected to fall. Were it

otherwise, neither the workman nor ourselves would know whether or not

wages were being earned. There must be a fixed day's work before a real

wage can be paid. Watchmen are paid for presence. Workmen are paid for

work.

 

Having these facts in hand we announced and put into operation in

January, 1914, a kind of profit-sharing plan in which the minimum wage

for any class of work and under certain conditions was five dollars a

day. At the same time we reduced the working day to eight hours--it had

been nine--and the week to forty-eight hours. This was entirely a

voluntary act. All of our wage rates have been voluntary. It was to our

way of thinking an act of social justice, and in the last analysis we

did it for our own satisfaction of mind. There is a pleasure in feeling

that you have made others happy--that you have lessened in some degree

the burdens of your fellow-men--that you have provided a margin out of

which may be had pleasure and saving. Good-will is one of the few really

important assets of life. A determined man can win almost anything that

he goes after, but unless, in his getting, he gains good will he has not

profited much.

 

There was, however, no charity in any way involved. That was not

generally understood. Many employers thought we were just making the

announcement because we were prosperous and wanted advertising and they

condemned us because we were upsetting standards--violating the custom

of paying a man the smallest amount he would take. There is nothing to

such standards and customs. They have to be wiped out. Some day they

will be. Otherwise, we cannot abolish poverty. We made the change not

merely because we wanted to pay higher wages and thought we could pay

them. We wanted to pay these wages so that the business would be on a

lasting foundation. We were not distributing anything--we were building

for the future. A low wage business is always insecure.

 

Probably few industrial announcements have created a more world-wide

comment than did this one, and hardly any one got the facts quite right.

Workmen quite generally believed that they were going to get five

dollars a day, regardless of what work they did.

 

The facts were somewhat different from the general impression. The plan

was to distribute profits, but instead of waiting until the profits had

been earned--to approximate them in advance and to add them, under

certain conditions, to the wages of those persons who had been in the

employ of the company for six months or more. It was classified

participation among three classes of employees:

 

(1) Married men living with and taking good care of their families.

 

(2) Single men over twenty-two years of age who are of proved thrifty

habits.

 

(3) Young men under twenty-two years of age, and women who are the sole

support of some next of kin.

 

A man was first to be paid his just wages--which were then on an average

of about fifteen per cent. above the usual market wage. He was then

eligible to a certain profit. His wages plus his profit were calculated

to give a minimum daily income of five dollars. The profit sharing rate

was divided on an hour basis and was credited to the hourly wage rate,

so as to give those receiving the lowest hourly rate the largest

proportion of profits. It was paid every two weeks with the wages. For

example, a man who received thirty-four cents an hour had a profit rate

of twenty-eight and one half cents an hour--which would give him a daily

income of five dollars. A man receiving fifty-four cents an hour would

have a profit rate of twenty-one cents an hour--which would give him a

daily income of six dollars.

 

It was a sort of prosperity-sharing plan. But on conditions. The man

and his home had to come up to certain standards of cleanliness and

citizenship. Nothing paternal was intended!--a certain amount of

paternalism did develop, and that is one reason why the whole plan and

the social welfare department were readjusted. But in the beginning

the idea was that there should be a very definite incentive to better

living and that the very best incentive was a money premium on proper

living. A man who is living aright will do his work aright. And then,

too, we wanted to avoid the possibility of lowering the standard of

work through an increased wage. It was demonstrated in war time that

too quickly increasing a man's pay sometimes increases only his

cupidity and therefore decreases his earning power. If, in the

beginning, we had simply put the increase in the pay envelopes, then

very likely the work standards would have broken down. The pay of

about half the men was doubled in the new plan; it might have been

taken as "easy money." The thought of easy money breaks down work.

There is a danger in too rapidly raising the pay of any man--whether

he previously received one dollar or one hundred dollars a day. In

fact, if the salary of a hundred-dollar-a-day man were increased

overnight to three hundred dollars a day he would probably make a

bigger fool of himself than the working man whose pay is increased

from one dollar to three dollars an hour. The man with the larger

amount of money has larger opportunity to make a fool of himself.

 

In this first plan the standards insisted upon were not petty--although

sometimes they may have been administered in a petty fashion. We had

about fifty investigators in the Social Department; the standard of