Business columns: Misreading Henry Ford’s key lesson
Having stubbornly misread the meaning of “Henry Ford’s five-dollar day,” the administration fails to create jobs or put more money in Americans’ pockets, said Dwight Lee in Investor’s Business Daily.
Dwight LeeInvestor’s Business Daily
One of the most “transparently silly” myths of American capitalism is that Henry Ford more than doubled his workers’ wages to $5 a day so that they could afford to buy his cars, said Dwight Lee. If selling cars to employees was his aim, Ford could simply have offered them discounts. His real goal was to lower production costs. The higher pay drew far more applicants than Ford needed, enabling him to hire the most dependable, hard-working employees. The resulting productivity increases made Ford’s cars more affordable for everyone.
This lesson seems lost on the Obama administration, which perversely seeks to increase purchasing power by raising production costs. Consider Obama-care, which will raise businesses’ costs “in ways that are complex and uncertain.” And if the administration succeeds in making it easier to unionize workplaces, that, too, will “increase the cost and reduce the productivity of workers.” Having stubbornly misread the meaning of “Henry Ford’s five-dollar day,” the administration fails to create jobs or put more money in Americans’ pockets.