It was all rather more complicated than that: It's also not true that the offer was of $5 a day in wages. They're more likely to turn up at all which was one of the problems Ford was trying to solve. That gets your workforce thinking they've got a good deal (for the clear reason that they have got a good deal) and if the workers think they've got a good deal then they're more likely to turn up on time, sober, and work diligently. The point is not so as to be paying a 'decent wage' or anything of that sort: it is to be paying a higher wage than other employers.
While that's talking about the living wage argument it applies here as well. As Paul Krugman points out, the effects are obvious:īut in any case there is a fundamental flaw in the argument: Surely the benefits of low turnover and high morale in your work force come not from paying a high wage, but from paying a high wage 'compared with other companies' - and that is precisely what mandating an increase in the minimum wage for all companies cannot accomplish. It can indeed be cheaper to pay workers more but to reduce the turnover of them and those associated training costs. That level of turnover is hugely expensive: not just the downtime of the production line but obviously also the training costs: even the search costs to find them.
