Research Details

Abstract

On January 5, 1914, Henry Ford, founder and CEO of Ford Motor Company, announced that the company's minimum daily wage would more than double, from $2.34 to $5. This increase would boost thousands of Ford Motor Company workers into the middle class, giving them the disposable income to buy consumer products--including the very Model Ts they were producing on the factory's assembly lines. The morning after the announcement, 10,000 people assembled at the Ford Motor Company employment window in Highland Park, Michigan, some of whom had arrived at 3 a.m. to secure their place in line. As Henry Ford watched his would-be employees jostle for a place in line, he told a nearby reporter that consistent, high demand for factory jobs had inspired the new program. He noted, "We wanted to give employment to more men." Despite his claims of trying to help his workers achieve the American Dream, Ford later called the program "one of the finest cost-cutting moves we ever made." How did allocating half of the company's profits to workers' wages help the company's bottom line?

Type

Case

Author(s)

Niko Matouschek, Amy Klopfenstein

Date Published

08/28/2023

Citations

Matouschek, Niko, and Amy Klopfenstein. Henry Ford's Five-Dollar Day. Case KE1272.