RIP Philo

Ford and the $5 car

Ford was having trouble retaining workers. Factory conditions back then were incredibly lousy, especially in the summer. Keep in mind that AC hadn't been invented yet. They crunched some numbers and realized that if they paid their workers more and retained them, it would be cheaper than retraining workers left and right all the time and having too little productivity while the new workers got up to speed.

So they instituted the $5 day, and got heaps of fabulous free PR as a result. They spun it to say they were doing it so all their employees could afford to buy Fords, but this was pure propaganda designed to make the company look better during a time it was taking heat because of how much money it was making.

When the depression came around they quietly killed the $5 day since they could keep workers for much less with such a high unemployment rate.

And thus a myth was born. "Smart" employers pay their workers enough to buy the products they are making. To realize how silly the concept is, imagine if Boeing or Airbus instituted a similar policy. Laughable isn't it?

http://gregmankiw.blogspot.com/2006/06/credos-of-left-and-right.html
Permalink leftie anyway 
March 29th, 2007 7:24pm
Yeah, that same idiot thinks that mandatory breaks are some kind of fallacy.

How does one become so stupid, naive, or brainwashed that they don't recognize the limitations of the human body?

Oh wait, it isn't that they don't, it just isn't their body, nor one they ever plan on being theirs!

I've neverheard the myth of which he speaks.

Whether people working minimum wage are trying to support families on it is a moot point. If it can't be done, of course people aren't doing it. No matter what you are spending money on, there is a minimal value you have. Even if you are pimple faced teen flipping burgers for gas money, I don't think that value is 440 times less than anyone elses.
Permalink Vista-JoC 
March 29th, 2007 7:50pm
> I don't think that value is 440 times less than anyone elses.

What number is acceptable? 4.4? 44? Who decides?

I mean it's a little like saying that the printf() function doesn't deserve to be called 440 more times than sqrt(). Just some meaningless number.

Don't go off on a religious rant about the spiritual worthiness of every human being. That's true but besides the point - in the eyes of God (or men/women) all humans should be equal. Don't evaluate someone's goodness by how much money they make, bro.
Permalink blahty heartsheep 
March 29th, 2007 8:13pm
I think the Japanese put it at 10.

It's admittedly not something you can easily measure empirically.

Since money amounts to the ability to consume from a pool of finite goods produced within society I believe it reasonable to compare that ability with the contribution.

Do you believe any individual's contributions to society to be 440 times as valuable as any other member's contributions?

I personally find that absurdly impossible.
Permalink Vista-JoC 
March 29th, 2007 11:53pm
The $5/hour wage had some strings attached. You had to be married. You had to live in Ford owned housing. You had to go to church at least twice per week. There were a few other requirements, but those are the ones I rememeber at this time.
Permalink Peter 
March 30th, 2007 9:27am
Is this the same Ford that funded Adolf Hitler's rise to power?
Permalink Practical Economist 
March 30th, 2007 7:02pm

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