Yes outpaying the competition can be beneficial, you can get better employees and/or better employee retention. Sometimes it makes sense, sometimes it doesn't . The more differences in skill in employees matter, the more likely paying more than others is to be beneficial up to a point (Past a certain point you get diminishing returns in extra quality or retention, then perhaps negative returns in retention when you pay them so much that they have no need to work anymore).
But it essentially never makes business sense in terms of "the employees can buy (or buy more) of the product if we pay them more.
I agree with you that such an idea makes no sense (except perhaps in extreme and contrived circumstances that are unlikely to occur in the real world). The point is that some people argue for higher wages, as something that not only won't harm the employers, but will actually help them, based on that idea of a "the employees can buy more if we pay them more" business strategy.
In act you yourself, just a couple of days ago, posted
"he raised his employees wages reasoning that they would now have more money to buy his cars..."
Message 29310405
I've heard it claimed that he actually said such a thing. I haven't bothered to check on that part since it doesn't really matter. If he said it, he my not have believed it (in other words it may have been dishonest rather then illogical, stupid or foolish). If he believed it then he was wrong.
including IBM when I started there.
Not to the point of Ford when Henry was in charge, but then again you didn't start at IBM in the early 20th century. Still even adjusting for the era, I'm pretty sure Ford was more paternalistic or controlling then most large companies in terms of control outside of work. (Almost certainly not uniquely so, just more than what was typical.)
Edit - Ford himself backed off of some of the most paternalistic and controlling aspects of his policy later on. The policy started in 1914, and by 1922 he wrote about such programs in the past tense and stated - ""paternalism has no place in industry. Welfare work that consists in prying into employees' private concerns is out of date." |
