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Key Figures in Labour History: Henry Ford

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Talent Management Total Rewards Performance Management

In 1914, labour unrest in the automotive industry was reaching a historic peak as unemployment rose and working conditions became increasingly oppressive. Standard wages for automotive workers at the time called for a six-day work week of nine-hour work days at a rate of $2.34 per day. Adjusting for inflation, that’s like working nine hours for just $60 a day in 2018.

It was Henry Ford, a pioneer of welfare capitalism and labour reform, who transformed the automotive industry by leveraging his tremendous success in business to bring better quality of life and higher wages for workers. Famous for being one of the first major sponsors behind the development of the assembly line in mass production, the Ford Motor Company became known for its commitment to business and technical innovations that aimed to reduce costs and increase wages while keeping their products affordable to the general public. To this day, this company still exists as a testament to never-ending innovation as a leading global automotive business.

Ford took the industry by surprise in 1914 by announcing that it would begin paying factory workers a minimum wage of $5.00 per day—nearly doubling the $2.34 average! To the astonishment of many, this had a positive effect on the business almost immediately. Worker morale was boosted considerably, building a stronger community within assembly line workers and increasing productivity. Additionally, Ford’s bold move attracted some of the best mechanical talent from all over the United States who brought with them their own expertise to further boost productivity and reduce training costs.

The competitors in the industry had no choice but to follow suit, and they would do so without a great deal of resistance, as Ford’s ideas took root and effected real change with a positive impact for workers and the company.

This was not the only major sea change by Henry Ford in the labour market. In 1926, Ford introduced the 5-day, 40-hour work week that many of us are familiar with today. In line with his commitment to improving the lives of his employees through his past labour policies, Ford said: “Every man needs more than one day a week for rest and recreation.”

The Monday-to-Friday workweek we know today is entirely modeled on Henry Ford’s philosophy to improve the quality of life for workers to benefit the business. He believed that an additional day of rest would result in employees working harder while they were on the job. As it was with the radical wage increase, this proved to be true and manufacturers across the world would eventually adopt the Monday-to-Friday workweek as the de facto standard practice in virtually all industries.

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