- Dec 10, 2020
- Reaction score
- East Coast, USA
For context, footnoting some history from a century ago, since we're alluding to cars —
As Obama presses for a higher minimum wage, the Post recalls Ford's shocking move 100 years ago to boost productivity by investing in his workers.www.saturdayeveningpost.com
There's an argument you see around sometimes about Henry Ford's decision to pay his workers those famed $5 a day wages. It was that he realised that he should pay his workers sufficiently large sums to that they could afford the products they were making. In this manner he could [...]www.forbes.com
I think it’s worth mentioning a few points here about ford paying his workers 5/day. It wasn’t some moral stance from him, it was like many of his actions a ruthless business decision. By taking away talent from his competitors he could cause their businesses to fail either due to inability to produce cars, or the resulting low quality of the cars. It also ensured workers showed up, on time and sober which boosted fords own productivity and quality. Finally by letting it’s workers afford the (cheap) model Ts, a vehicle they would have some degree of pride in making it ensured a few more sales that probably offset the increased pay quite a bit.
It’s also worth mentioning that model Ts we’re meant for the mass market, they were not the fine dining of cars, but probably somewhere between McDonald’s and ruby tuesday. To modernize the cost it looks like the entry models went for 18-20k, which is a laughable sum for a new car in the modern era. They were a luxury in that they were new, and many families didn’t have motor vehicles. Beyond that, as the years went on, the price of the car dropped significantly, from around 900 at the time to around 350-400, which is right around 10k USD today. That took them firmly from “expensive but likely possible to many families” to “down right cheap” somewhere in the 5000 range.
Paying workers to afford your product is excellent, but fine dining is a luxury item whereas the model T was priced to be a low price commodity specifically to make it a necessity for all homes to own one. Just like watchmakers who make Rolexes probably can’t afford them, or people who assemble Bugattis can’t fine dining is no different. The chefs at a small mom and pop hole in the wall, could no doubt afford to eat there, but I wouldn’t expect the chef at a high end restaurant to be able to do so on a regular basis.