My Forty Years with Ford

11. The Five-Dollar Day

C H A P T E R 11 The Five-Dollar Day AN March, 1956, the minimum wage became by act of Congress $i an hour or $8 a day. Back in 1914, Henry Ford raised his minimum wage from $2 to $5 a day. The passage of time has dulled the significance and far-reaching results of that action of more than forty years ago. Proportionately , the Ford increase would be equivalent to raising today's $8 day to $20. But establishment of a $20 minimum wage, fantastic though it seems, would scarcely parallel the Ford announcement either in importance or in world-wide sensation. The $5 day did not come about by any legislative act. It was not the outcome of collective bargaining. It did not result from any labor pressure—in fact, its establishment without union participation would be illegal today, and the man who made it could be haled into court for unfair labor practice . The $5 was merely one man's decision, after seeing some chalked figures on a blackboard in his office, that it would be a good business move. And he was entirely unaware that the consequences of that decision would be a revolution in business outlook and economic thought, and the evolution of '35 136 MY FORTY YEARS WITH FORD what today is the distinctly American productive system of free enterprise. The Ford Model T was built so that every man could run it. Ford mass production made it available to everyone. Ford wages enabled everyone to afford it. The Ford $5 day rejected the old theory that labor, like other commodities, must be bought in the cheapest market. It recognized that mass producers are also mass consumers, that they cannot consume unless they are able to buy. But, like Ford mass production, the principles of Ford wages were not expressed until years after the event. In a recent advertisement was a photograph of Memorial Gate at the University of Pennsylvania. Over it was a Latin inscription of which the English translation is, "We shall find a way or we shall make one." That was also the working philosophy of Henry Ford in the days of his greatness and when he arrived at the $5-day plan. The plan was worked out in his office one Sunday morning in January, 1914. Until this writing, all existing accounts of what went on that morning are, at the nearest, second or third hand. Those stories vary, not necessarily according to the narrator but according to the one who heard the narrator or the one who heard the person who had the story from the narrator. So, a collection of fantastic myths and suppositions has arisen over the origin of the $5 day. It's like the old parlor game in which all present sit in a circle. Occupant of No. i seat whispers somethingin the next person's ear, who whispers what he thinks he hears in the ear of his neighbor, and so on around the circle until what comes back to its originator is nothing like the original message. It has been said that the idea originated with Mr. Couzens, but he knew nothing about it until Mr. Ford told him. Another account is that it was the brainchild of John R. Lee, who was one of the executives of the Keim Mills which Ford THE FIVE-DOLLAR DAY 137 Motor Company bought and moved to Detroit. At Ford, Lee became employment manager and simplified the company 's pay schedules, but instead of endorsing the plan, he denounced it. Myth also surrounds the participants at that Sunday morning meeting. Couzens, Wills, and Hawkins were said to have been there. They were not. The only ones present were Mr. Ford, Ed Martin, Lee, and I. The events of that day are still very clear in my mind, which is understandable, for this was a milestone in industrial and economic history. I am the only man alive who took part in that meeting; and since none of the others ever set down their accounts, mine is the only firsthand recollection. The $5 day happened this way: Late in 1912 or early in 1913, Mr. Ford began to think about further expansion. We had been in Highland Park less than two years, we had not solved current production problems, and the parts assembly lines were still experiments. Yet the mind of Henry Ford...