When Henry Ford Doubled His Minimum Wage (2014) • Hacker News Board

Re: When Henry Ford Doubled His Minimum Wage (2014)

#61

Post by astazangasta » Thu, May 02, 2019, 2:46 PM UTC

Aloha wrote: post #39

psoots wrote: post #35

How is there no mention of the strength of organized labor during that period in the article or any of these comments? That was a big part of what motivated Ford to appease the workers when rolling out his new flexible production system. It wasn't his benevolence. Ford, the company, along with GM gave up that system half a century later for a more rigid system that included more outsourcing but had the upside of bein…

The strength of organized labor, particularly at Ford in 1914 was weak, both GM and Chrysler unionized in 1937, Ford was the last to do so of the big three, holding out until 1941. Ford's rationale for increasing the wage for his workers, as laid out by him, was to make it so every Ford employee could buy a Ford car. If you're curious, and want to know more about Ford Motor Company, I highly recommend a book called W…

This is wrong. There were 8 hour movements going back to 1886. Notable are strikes for a 40 hour week in 1919. Ford was responding to the inevitable. https://libcom.org/history/articles/40-hours-strike-1919

Re: When Henry Ford Doubled His Minimum Wage (2014)

#62

Post by isostatic » Thu, May 02, 2019, 2:48 PM UTC

Consultant32452 wrote: post #57

jimmaswell wrote: post #50

Earlier quoted context omitted.

As you must know being a business owner, labor is only one component of expenses, so prices don't go up x% just because labor went up x%. In McDonald's case, a 100+% rise in wages would represent a 4% rise in price. Obviously most minimum wage increases don't double at once so it would be even less. You don't go on a firing spree and shut down the business when property taxes or materials go up so why would you need…

The production cost of a McBurger may only go up 4%, but the consumer price of goods is also significantly dependant on how much money is in consumer's hands. If you just hand everyone in the country $500/mo, rent is going up everywhere.

Which is what happened when families started having 2 full time high wage earners.

Both rent and house prices shot up. Those who owned houses profited massively from the unearned wealth increase. Those renting suffered.

We're now in a situation where everyone needs 2 full time high wage earners to pay for the same housing and lifestyle that used to be done by 1 full time high wage and perhaps 1 part time low wage

Re: When Henry Ford Doubled His Minimum Wage (2014)

#63

Post by larrydag » Thu, May 02, 2019, 2:55 PM UTC

dreamache wrote: post #28

bmmayer1 wrote: post #5

I can't believe this actually needs to be said, but a single employer raising its wages is not the same thing as a government raising a legally mandated minimum wage. It's so much not the same thing, that the very fact the article tries to conflate them by comparing Ford's decision with the proposal from the Obama administration makes me doubt the voracity of the entire piece. For one thing, Ford's logic is quite sou…

100% agree. In Ford's case, it was a voluntary decision to attract and keep the best workers. In the case of federally mandated minimum wage, it's a threat of force against business owners who are otherwise acting peacefully and quite literally, minding their own business. Raising the minimum wage results in: - A raise in the price of products (hurting the poor the most) - Firing employees - Reducing hours - Going ou…

Harvard Business Study on impacts of firm exit with increased minimum wage

https://www.hbs.edu/faculty/Pages/item.aspx?num=52552

Re: When Henry Ford Doubled His Minimum Wage (2014)

#64

Post by astazangasta » Thu, May 02, 2019, 3:00 PM UTC

logicchains wrote: post #53

blueline wrote: post #33

Earlier quoted context omitted.

wages have absolutely not risen proportional to worker productivity https://www.epi.org/productivity-pay-gap/

An increase in aggregate worker productivity isn't necessarily an increase in the ability of workers; most productivity gains are attributable to capital investment. If you took a productive modern worker back 500 years, they wouldn't be much more productive than the locals of that time, as they'd lack the tooling, machinery, resources, equipment and factories that magnify human productivity today. It hence makes sen…

All productivity gain is the result of capital investment. That doesn't mean the benefits should not accrue to workers. Who do you think is provisioning, configuring and using the machines that result in that gain? Shareholders?

Re: When Henry Ford Doubled His Minimum Wage (2014)

#65

Post by jimmaswell » Thu, May 02, 2019, 3:22 PM UTC

Consultant32452 wrote: post #57

jimmaswell wrote: post #50

Earlier quoted context omitted.

As you must know being a business owner, labor is only one component of expenses, so prices don't go up x% just because labor went up x%. In McDonald's case, a 100+% rise in wages would represent a 4% rise in price. Obviously most minimum wage increases don't double at once so it would be even less. You don't go on a firing spree and shut down the business when property taxes or materials go up so why would you need…

The production cost of a McBurger may only go up 4%, but the consumer price of goods is also significantly dependant on how much money is in consumer's hands. If you just hand everyone in the country $500/mo, rent is going up everywhere.

Only Not to mention, rent control is a good idea in addition, or finding ways to make homeownership more in-reach for more people.

Re: When Henry Ford Doubled His Minimum Wage (2014)

#66

Post by benjohnson » Thu, May 02, 2019, 3:32 PM UTC

folli wrote: post #15

louisswiss wrote: post #11

Earlier quoted context omitted.

> I'm easily making more money, in nominal dollars, than an average CEO in 1919, but I'm not running wild in Saint-Tropez every summer either. Not arguing with your general point. But on this count, I think you're vastly better off than the average CEO in 1919. You have luxury they couldn't have even imagined. - quality of medical care - entertainment - air travel - cars - food regardless of season - etc

This is actually a really interesting point. In some ways even moderatly poor people in a Western country are better of than the Caesars of Ancient Rome, especially the availability of medical care is something I would never want to trade. In other ways even the richest and most powerful people today will never be able to have comparable power, in terms of political and cultural influence. It would be an interesting…

It is strange! One of the problems some moderately poor people have is eating too much food.

Re: When Henry Ford Doubled His Minimum Wage (2014)

#67

Post by chiefalchemist » Thu, May 02, 2019, 4:00 PM UTC

bluGill wrote: post #49

chiefalchemist wrote: post #42

Earlier quoted context omitted.

Right. And today, instead, churn is accepted. "Leadership" blames staff for being unmotivated, etc. Put another way, Ford understood that to get what he wanted he'd have to consider the fate and faith of his employees. Do you think that's how Bezos thinks?

Bezos has to mitigate the cost of turnover somehow. You can mitigate it by reducing it (as Ford did), or you can mitigate by having faster training so new hires are productive faster. Both can fail.

OK. Don't take this the wrong way but let me repeat the statement + question:

Put another way, Ford understood that to get what he wanted he'd have to consider the fate and faith of his employees. Do you think that's how Bezos thinks?

I think what you're saying is - correct me if I'm wrong - Bezos does __not__ factor in his employees in the way Ford did.

p.s. The fact that we even have the term "human resources" tells us a lot, eh.

Re: When Henry Ford Doubled His Minimum Wage (2014)

#68

Post by bluGill » Thu, May 02, 2019, 4:25 PM UTC

chiefalchemist wrote: post #67

bluGill wrote: post #49

Earlier quoted context omitted.

Bezos has to mitigate the cost of turnover somehow. You can mitigate it by reducing it (as Ford did), or you can mitigate by having faster training so new hires are productive faster. Both can fail.

OK. Don't take this the wrong way but let me repeat the statement + question: Put another way, Ford understood that to get what he wanted he'd have to consider the fate and faith of his employees. Do you think that's how Bezos thinks? I think what you're saying is - correct me if I'm wrong - Bezos does __not__ factor in his employees in the way Ford did. p.s. The fact that we even have the term "human resources" tell…

Right, Bezos currently doesn't see value in treating his employees well. (or so I'm given to understand - I don't have any knowledge) This can change.

Re: When Henry Ford Doubled His Minimum Wage (2014)

#69

Post by lovich » Thu, May 02, 2019, 4:40 PM UTC

defertoreptar wrote: post #43

ashelmire wrote: post #38

Earlier quoted context omitted.

Disagree. The alternative is people leaving the company, industry, or workforce as laborers entirely. If all companies offered $.02 per hour, with little change in purchasing power, basically everyone would elect not to work and instead steal from and destroy businesses. And you can't look at economics in a vacuum; economics are intimately related to politics. An angry, poor population is a violent population, and fe…

> If all companies offered $.02 per hour, with little change in purchasing power, basically everyone would elect not to work Yes, this seems obvious. > And you can't look at economics in a vacuum Agreed, as long as we acknowledge that we shouldn't use this truism as an excuse to sweep away every argument about economics. Overall, I don't see how you've contradicted my point, which was that when Ford increased bottom…

You responded to his first point about people electing to not work at all if the wage is too low. That's the contradiction to your point.

If everyone getting minimum wage had their wage increased it would decrease the number of people who left the workforce entirely. The same effect would happen in for a case if all his competitors increased their wage too

Re: When Henry Ford Doubled His Minimum Wage (2014)

#70

Post by leetcrew » Thu, May 02, 2019, 4:57 PM UTC

jlokier wrote: post #52

leetcrew wrote: post #44

Earlier quoted context omitted.

> there are two types of minimum wage workers - teenagers looking for summer money, and adults making a living -, and you can help the latter if you don't mind screwing the former. when you put it like this, it seems obvious to say that the right move is to screw over the teenagers who are much less likely to be supporting a family or themselves. I'm not sure this is great in the long run though. imo, having some kin…

I don't know about other countries, but in the UK the approach is to set the minimum wage significantly lower for teenagers. Which sucks if you're an adult making a living who happens to be young, but that's what we do. There's also a dirty hack: We call some young people "apprentices"(1), which sometimes means the same job as before and not having to pay the minimum wage, with a veneer of marketing. See also "unpaid…

the obvious problem here is that if you have a different minimum wage for teenagers, they will be preferred over adult candidates.

by the way, we do have special rules in the US for what kind of work you are allowed to give to interns. in general you are not allowed to give work to interns that would otherwise be performed by a full employee. this is intended to prevent adult employees being put out of a job by low pay interns. unfortunately, I don't think most minimum wage employers are interested in dealing with these complicated rules for interns.