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Politics : Mainstream Politics and Economics -- Ignore unavailable to you. Want to Upgrade?

To: gamesmistress who wrote (21089)	7/29/2012 3:10:50 PM
From: sm1th	1 Recommendation Respond to of 85487

Ford more than doubled the pay of his employees--making them, by far, the highest-paid workers in America back in the 1910's. Detroit auto workers remained the highest paid in the country until the UAW was formed in th late 30's. By the 50's Detroit was beginning it's long slide into irrelevance.

To: gamesmistress who wrote (21089)	7/29/2012 3:48:22 PM
From: koan	Read Replies (2) \| Respond to of 85487

It starts with the human condition. What we are. How we have lived for thousands of years. Things are more complicated than most understand. For most of our history we had no freedom but were ruled by despots and dogma. Up until we had republics/democracies, no one without power had any freedom. The masses were ruled by two entities: leaders: dictators: tribal chiefs, war lords, kings / queens, but people did not vote for their leaders. 2) Dogma: Until we had science we had no freedom from dogma: whatever myths the culture ruled was how one was to live that, how they HAD to live. They had no choice. Little girls are still being mutilated in the middle east and Africa and women are slaves to the men in most of the world. Read Virgins of Paradise. Great book by Barbara Woods. Women had almost no freedom until just recently, anywhere, including here. Women couldn't even vote until 1919 because men wanted to keep women down and thought they were stupid. Now more women are going to college than men., but still only have about 1% of the worlds wealth, I think. What changed was an idea. Peoples right to elect their leaders. Republics. Ancient Greeks thought of that around 500 BC. So now the way we live is that the people vote for everything from housing set backs to when to put the garbage out by boards and commissions, starting at the local level, which is the ultimate exercise of democracy. How civilzation works. They say about democracy: "it is the worst form of government, except for all others." So the best thing for humans is to have a vibrant democracy. The exercise of democracy is the governments they form to govern us, without which we would devolve back to being ruled by dictators. You can even see countries or areas which have lost their demcoracy go back to dictatoriships. So democracy is the best form of government, but is only as smart as the electorate. And then look at which countries are doing the best. It is the Scandanavian countries, Canada, Australia and New Zealand and some European countries. As meassured by health, education and happiness. And so what do they have in common? High taxes, extensive welfare systems and low income inequality. We are 65 in inequality which is criminal. The Walton family alone has more wealth than the bottom 40% of the population. Society has to be kept healthy if it is to serve and protect the people and major income inequality is a cancer on a society.

To: gamesmistress who wrote (21089)	7/29/2012 5:45:33 PM
From: TimF	Respond to of 85487

On Henry Ford and his $5 a day Written by Tim Worstall It's a fairly common trope in US lefty land that Henry Ford and his $5 a day wages back in 1913 marked a huge change in labour relations. He was moved to raise wages so high (approximately double the prevailing wage) so as to help create a market for his own products. This is an interesting thought, certainly, but not one that stands much examination. That year his establishment of workers was some 14,000 head: his sales some 170,000 and that's just the year that he started ramping up production through the moving assembly line (reaching 500,000 in a couple of years and near a million within a decade). The spending power of his workforce was entirely marginal. No, the real value to Ford of his high wages was, as with the living wage we looked at yesterday, that he was paying higher wages than his competitors. Twice what his competitors were paying in fact. In 1913 he had a turnover of over 50,000 workers to keep that establishment of 14,000. Paying hugely higher wages than everyone else in the nascent manufacturing industry of the time meant that he lowered turnover, thus recruitment and training costs. We might also note that he wasn't in fact paying higher wages: he was offering a bonus, a highly conditional bonus: The $5 a day rate was about half pay and half bonus. The bonus came with character requirements and was enforced by the Socialization Organization. This was a committee that would visit the employees' homes to ensure that they were doing things the American way. They were supposed to avoid social ills such as gambling and drinking. They were to learn English, and many (primarily the recent immigrants) had to attend classes to become "Americanized." Women were not eligible for the bonus unless they were single and supporting the family. Also, men were not eligible if their wives worked outside the home. The stories we're told about matters historical often don't stand up to all that much detailed scrutiny which is why they are more properly referred to not as history but as legends: highly partisan legends. adamsmith.org Yeah its a pretty crazy idea. If you pay your employees more, that adds to your cost in direct terms (although it can lower costs associated with turnover like training costs, and possibly allow you to be more selective about who you hire, so its not always a negative for the company), its very unlikely you can make up those costs through the employees buying more of your product. Their marginal propensity to spend extra cash on your product is probably far less than 100%. I can imagine a scenario where it could work that employees buying more of your product, helped your company grow, if somehow the employees all really wanted your product, but almost none of them could afford it, then you give them a moderate raise, and now they can and do buy it so their marginal propensity to spend that extra cash on your product is far above 100%, but that is a very unrealistic scenario for the entire workforce, even if it could happen for a specific individual. Also as Worstall points out, even if every employee bought a Ford because of this raise (and none of them would buy it without one), that is only 14,000 additional customers (not annual sales, the annual sales addition would be less, few people buy a new car every year) out of total annual sales of 170,000 to 500,000. For Ford the raise apparently made some sense, but not "so the employees would be able to buy the product", but because he could reduce turnover, and so he could push his social agenda on the employees by paying them bonuses (amounting to about half their pay) for acting the way he wanted them to act. I'm not sure how much of the benefit in Ford's eyes came from each of those things. Message 27092445