Asked by: Liyu Priyodarshi
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Why did Ford pay his employees higher wages?

Last Updated: 9th February, 2020

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In January 1914, Henry Ford started paying his auto workers a remarkable $5 a day. Doubling the average wage helped ensure a stable workforce and likely boosted sales since the workers could now afford to buy the cars they were making. It laid the foundation for an economy driven by consumer demand.

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Just so, how did Ford deal with his employees at that time and why?

Higher wages were necessary, Ford realized, to retain workers who could handle the pressure and the monotony of his assembly line. In January of 1914, his continuous-motion system reduced the time to build a car from 12 and a half hours to 93 minutes.

Also, what did Henry Ford do to reduce employee turnover rates? To address the turnover issue, Henry Ford upped his employees' pay from $2.25 a day to $5.00 day, twice the average wage for automobile makers in 1914.

Correspondingly, how did Ford treat his employees?

Henry Ford treated his workers with care, having implemented a $5 daily wage for the workers in 1914. The amount was almost twice the rate other car factories paid their workers. Ford believed that increasing the pay would make the workers happier and encourage them to work faster.

How much did Henry Ford pay his factory workers?

There's an argument you see around sometimes about Henry Ford's decision to pay his workers those famed $5 a day wages. It was that he realised that he should pay his workers sufficiently large sums to that they could afford the products they were making. In this manner he could expand the market for his products.

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Equally important, Ford's $5 wages – about $117 a day today, or nearly $30,000 a year – helped kick-start the American middle class, creating a ready market for the cars those workers were building, especially when other major manufacturers were forced to follow suit.

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