OT: Raising the minimum wage doesn't work.

[Malcom "Mal" Reynolds]

unless you are Henry Ford

Henry Ford's $5-a-Day Revolution

In 1914, Henry Ford started an industrial revolution by more than doubling wages to $5 a daya move that helped build the U.S. middle class and the modern economy.

In 1913, to help meet the growing demand for the Model T, Henry Ford turned his attention to improving the manufacturing processes. The business model Ford developedproduction on a grand scale, performed by well-paid workersspread throughout the world and became the manufacturing standard for everything from vacuum sweepers to cars, and more.

Transforming the Assembly Line The moving assembly line was perhaps Ford Motor Company's single greatest contribution to the automotive manufacturing process. First implemented at the Highland Park plant in Michigan, the new technique allowed individual workers to stay in one place and perform the same task repeatedly on multiple vehicles that passed by them. The moving assembly line proved tremendously efficient, helping the company to far surpass the production levels of its competitors while making its vehicles more affordable. The $5-a-day Workday After the success of the moving assembly line, Henry Ford had another transformative idea: in January 1914, he startled the world by announcing that Ford Motor Company would pay $5 a day to its workers. The pay increase would also be accompanied by a shorter workday (from nine to eight hours). While this rate didn't automatically apply to every worker, it more than doubled the average autoworker's wage. While Henry's primary objective was to reduce worker attritionlabor turnover from monotonous assembly line work was highnewspapers from all over the world reported the story as an extraordinary gesture of goodwill. Thousands of Workers Flock to Detroit After Fords announcement, thousands of prospective workers showed up at the Ford Motor Company employment office. People surged toward Detroit from the American South and the nations of Europe. As expected, employee turnover diminished. And, by creating an eight-hour day, Ford could run three shifts instead of two, increasing productivity. Henry Ford had reasoned that since it was now possible to build inexpensive cars in volume, more of them could be sold if employees could afford to buy them. The $5 day helped better the lot of all American workers and contributed to the emergence of the American middle class. In the process, Henry Ford had changed manufacturing forever.

[Kurt Ullman]

If you don't understnnd the difference between an employer deciding on his or her own to increase wages and the government mandating it, there really isn't any reason to continue the discussion.

And also put some people out of work because it was more efficient and needed fewer people (per vehicle).

Driven by the desire to make more money by reducing worker attritition, in other words economic reasons instead of political. Makes all the difference in the world.

[Steve F.]

Discussing anything with a leftie is purely for sport.

[Gordon Shumway]

One thing that wasn't mentioned in your article was the skill level required for the manufacturing jobs in question. These are definitely not "entry level" positions.

I betting most of the burger flippers and others, in one of the many true entry level jobs today wouldn't even show up for the second day of work at the blue oval factory.

Therefore, he didn't raise the minimum wage -- he raised the wage for that job classification to eliminate turn over.

One of the biggest problems today that the idiot in chief is perpetuating is high unemployment because of his socialist policies. With high unemployment there is a surplus of workers. Who, in there right mind, would pay premium wages when they could get many qualified workers for lower than normal pay?

To correct this problem the anointed one would have to change his policies on Keystone, corporate tax rates, his beloved Obamacare, his handouts to solar companies, the draconian regulations on the coal industry and many of his other policies. But then he would be admitting he was wrong. We all know that never has or never will happen.

Unfortunately, we still have three rough years ahead.

[Norminn]

clipped

I'm all for it if the gov't. puts the top 1% on the same wage. It would be a hell of an experiment :o) MW should have been $10 10 years ago. Folks shouldn't cry about raising MW AND all the folks on food stamps....it's one or the other, IMO.

[dadiOH]

So why didn't raising the minimum wage 28 times since its inception in 1938 get them out of poverty and/or off food stamps? Could it be that raising the minimum wage increases costs which increases prices which puts them right back to where they were (besides impacting everyone else)? Some of the data here might be of interest to you...

If we want to reduce poverty, we need to inspire people to learn more, work harder, work smarter and to spend what they do earn wisely. And even if that should happen, there will still be poverty.

[Kurt Ullman]

Why? Makes no sense other than to soothe your personal biases. Seems like a really bad way to make policy.

[Ralph Mowery]

Maybe the maximum wage should be capped to some reasonable multiple of the minimum wage. Say 100 times.

[trader4]

+1

And in addition to that, the libs always assume a static situation. The person on min wage today is going to be on min wage for 40 years. And that they are supporting a family of 4. Statistics show that the overwhelming majority of people earning min wage are teens, those just entering the work force with no kids, no families, doing it part-time, etc. Anyone with some motivation can move up from a min wage, without the govt. If anyting, if the govt was smaller and taking less of the employees money, they'd be better off.

[Kurt Ullman]

If you look at the performance based pay issues, you will note that these tax things were put in place in the mid-80s (by strong bipartisan majorities, BTW) because Congress at the time actually wanted to reign in what they THEN viewed as widely outrageous executive pay.

In order to fight this Evil, they effectively capped executive salary (what they are paid to actually run the company) by making nothing more than $1 million deductible. (If you look at the proxy filings for most publicly held companies, a large %age of them still top actual salaries at that point).

Then, in an attempt to "align the interests of the shareholders and the executives", tax-favored performance based things such as stock options, etc. So, instead of paying someone for actually running the company, they paid them to run the books. I don't think it was coincidence that first book-cooking scandal took place within the next two years after passage. Over the long haul, all sorts of things occurred. In no apparent order of importance:

1). Executive pay rose substantially (although interestingly enough if you look at many of the indicators they rise and fall with the stock) and execs were paid orders of magnitude more than even the most captive board would have had the balls to pay them before. 2)> The concentration of wealth starts the spike around the same time. 3). The marker people like to point to, ratio between exec pay and the average on the shop floor, ballooned. After bouncing around 30X or so during the 60s, 70s, and early 80s, it took off cresting north of 300x before falling back with the stock market. So to those clamoring for Congressional action I point to the above and suggest they be damn careful what they wish for.

(Actually if I were in charge, I'd make dividends tax-favored. You can't restate a dividend, if you reinvest you get you the advantages of compounding, and the main metrics (%age of cash flow used to pay the dividends and whether the dividend grows) are much easier to understand, figure, are not as susceptible to accounting games as the current metrics.

[Norminn]

Of course it doesn't make sense, but my sense of humor just takes a turn now and then....

What I don't get about repugnicans is how damn rigid they are about money; we need a service economy with living wages. Not only do folks have stagnant wages to struggle with, they have s--- dumped on them with temp jobs, limited hours and no benefits. Just work harder and move up the ladder? Not when most of the mfg. economy is in China or Thailand or Bangladesh. In spite of all the crap, Americans are still most productive.

Folks can't work when they are sick, and they can't afford health care when they don't work....you consider them all undeserving and lazy? What's the answer?

[Gordon Shumway]

As for your opinion, An OPINION is a sincerely held belief NOT based on facts. So, then, if one has an OPINION, one does NOT have facts.

You think increasing the bottom pay and decreasing the top pay is a good thing? If so, you must also believe that a socialist, classless society is the answer to all economic problems.

Having said that, I can only assume that you believe people who work hard and become rich, or others that haven't necessarily worked hard but inherited wealth should have most of their possessions stripped from them and given to those who worked hard but weren't fortunate to make the right decisions or those who didn't work hard at all. Is that correct?

If you believe that then you must be opposed to rich people, the real job creators, creating wealth for everyone because of the trickle-down effect. Rich people often achieve their wealth through hard work and they wouldn't have an incentive to work hard if they knew they couldn't keep a large proportion of this wealth.

Did I say anything that was wrong Norminn?

[Kurt Ullman]

First of all define living wage in some non-subjective manner. Secondly, if we add to the mininum wage, how is that going to do anything other than move the jobs elsewhere or to more automation. You can't pick a number out of your hat and think the economy will bend to your will because you are Right (excuse me-- Left) and Good. Pres. Obama's increase of the minimum wage for fed contracts is a perfect example. First of all it is largely just for show because of the sheer number of exemptions and the relatively low number of people who will be impacted. But most importantly, he can't increase the amount of money in the pot. So (and this is the part that is being studiously ignored) for every $ added to contract A, there is a dollar subtracted from contract Z. So, he may actually end up costing jobs because he is deciding pay by fiat.

Putting a bunch of them out of work by making the job too expensive doesn't seem a good idea.

[Cindy Hamilton]

I dunno. Every job where I've had to work with the Boss's Son, I've leaned toward confiscatory inheritance taxes. ;)

Cindy Hamilton

[Norminn]

Wrong. Lots of informed people have opinions; sometimes opinions are shared and bring about change. Of course, many uninformed people also have opinions.

That was merely an attempt at humor; sorry it bewildered you so.

Lots of uninformed people make assumptions, which are on par with uninformed opinions.

Wrong again. Just like to point out that job security, living wages for hard work, health care don't appear from pixie dust sprinkled about by corporations.

Yes.

>

[Tony Hwang]

Hi, Not all boss's son is like that. My BIL(kid sister's husband) is a son of big big boss of major oil company. He never worked there at any time during school years or out of school. He went his own way, started a successful consulting company, now sold it, retired at 58 with enough to last. I'd rather put maximum wage, minimum wage doesn't do much.

[Cindy Hamilton]

Then he's not the Boss's Son at his father's company.

Cindy Hamilton

[Frank]

Milton Friedman's discussion on how it discriminates against blacks and those with low labor skills and only benefits unions:

[Steve F.]

Along with getting the government the hell out of the way, and out of our pockets. I still cannot fathom how it is that people in the U.S., in a short period of time, came to think that income taxes, by the Feds, *is* a normal state of affairs. Much less payroll taxes. Stupid people...

[Gordon Shumway]

You still didn't answer if my assumptions were correct.

Umm, what does job security, living wages or health care have to do with a discussion about minimum wage? Minimum wage is what is paid to those who have no experience, no skills and often no higher education to perform an entry level job. Those entry level jobs are where one begins their career path. If one wants a living wage, health care, job security, paid vacations, stock options, a company car, an expense account and other perks that come with a NON entry level job one must work hard, get promoted, get more education, get promoted again while they are climbing the corporate ladder.

If one is not willing to make those sacrifices to climb the ladder one is not entitled to the rewards that bring. I would think your pixie dust would have explained that to you.

Try again.