These days, we all expect a minimum wage for the work that we do, and many countries around the world have even set a legal minimum wage for all employees. However, this was not always the case. On January 5, 1914, Henry Ford, founder of the Ford Motor Company, made a momentous announcement. He would be setting a new minimum wage of five dollars per day for his factory workers. The news came as a shock to everyone.
Although a five-dollar-per-day salary does not seem high now, at the time, Ford’s change meant that his workers’ salaries doubled in an instant. So, why exactly did Ford decide to implement this change?
There are multiple possible answers to this question. Some believe that Ford genuinely wanted to reward his workers and improve their lives. Others feel that the change was part of Ford’s business strategy. They suggest that Ford may have wanted to address the problem of high turnover caused by the drudgery of assembly line work. Still others believe that the wage change was simply a move for good publicity. Nevertheless, regardless of Ford’s rationale, what cannot be denied is the impact the change had on the business world and beyond. To keep pace with Ford, other automobile manufacturers soon followed suit in increasing their workers’ wages. The result was that the quality of life began to improve for many working-class people in America. This elevated some families into the middle class. In summary, the idea of a decent living wage for a fair day’s work is one that is undeniably connected to America’s prosperity and growth throughout the 20th century. Thus, Ford is considered a true pioneer of capitalism.