Assembly line work was hard, repetitive, 12 hour/day labor. Many workers hated their jobs and quit soon after they were trained, resulting in 370% employee turnover in a year.
Ford was the first to pay his workers $5 a day and reduce a day's work to 8 hours. This was called "Welfare Capitalism,” which means taking care of employees to keep them happy and loyal, but also so that they won’t join unions.
Part of the $5 was “profit sharing” if the worker had good living habits. Inspectors evaluated Ford workers for good marriages, morals, thriftiness, alcohol, and cleanliness. Ford believed these employees would be more efficient.
While it cost $10 million in the first year, thousands of people applied for jobs and turnover dropped to 16% in 1915.
Through higher wages, Ford helped establish the middle class and a new mass market:
Ford was the first to pay his workers $5 a day and reduce a day's work to 8 hours. This was called "Welfare Capitalism,” which means taking care of employees to keep them happy and loyal, but also so that they won’t join unions.
Part of the $5 was “profit sharing” if the worker had good living habits. Inspectors evaluated Ford workers for good marriages, morals, thriftiness, alcohol, and cleanliness. Ford believed these employees would be more efficient.
While it cost $10 million in the first year, thousands of people applied for jobs and turnover dropped to 16% in 1915.
Through higher wages, Ford helped establish the middle class and a new mass market:
"At the time nobody in his right mind believed the economics could possibly turn out to be as sound as they did in reducing turnover, giving workers an incentive, and creating a whole new class of customers who could afford to buy the cars they made."
(Harold Evans, They Made America p. 245)