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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.
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
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
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
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
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
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
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
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
(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