This Labor Day Thank Henry Ford & Capitalism NOT Unions For Your Pay, Schedule & Even Your Benefits.

Last year we had an image about labor day we made here at The Conservatarian go fairly viral. Quite frankly I was very surprised as I spent 15 minutes making it and obviously less time then that proofreading it for grammatical errors. The image was picked up and used by conservative sites from IJReview.com to TheFedalist.com and others. The image (posted below) was even attacked by Politifact who claimed it was mostly false but that’s mostly likely because they are mostly biased. Let me explain in the next few paragraphs why this meme is correct and why you can thank not unions but Capitalism for your gains in the work place.

Our memes side by side with our old logo.

The Henry Ford Story
This whole meme really revolves around the story of Henry Ford significantly boosting worker’s pay and working schedules. Urban legend has it that Ford did this because he wanted every worker to be able to buy what they are producing. While that sounds nice it is not true. Mr.Ford did all this for a completely different reason.

Henry Ford was motivated by greed to give to others. It is largely documented and even liberal economist Paul Krugman agrees. Ford didn’t give to help his employees, but to help himself. Prior to the wage hike and schedule shift worker turnover at the Ford plant was very high and in order to reduce that turnover the big man himself made the job a little more enticing.

Now one thing Politifact jabbed at me about was that all this was not all done in one year (yeah no crap Sherlock). This process came across multiple years just like any negotiation would. An owner to a business only wants to give the minimum amount they need to to make the maximum they can and vice versa  with the employee. Everyone wants to make the most they can.

So below are the main points of the meme with when they were instituted and refuting some points in the Politifact article.

A Living Wage
Instituted: Jan. 5, 1914

The first recognized “living wage” when Henry Ford increased starting pay from $2.34 per day to $5.00 per day. That does not sound like a lot but inflation adjusted that change is from 56.31/day or $7.03/hr to $120.36/day or $15/hr. Keep in mind that is actually a very conservative estimate since it is taken from the Consumer Price Index who strangely enough does not tie basic consumer needs like food goods such as milk and eggs to inflation. With that said the new wage was defiantly a competitive amount and most likely had even more buying power then $120.00 a day would in today’s standards.

*Let it be noted for the record this is where I made the most hiccups. The original meme said per hour instead of day and didn’t mention the wage increase happened in 1914. Like said above only so much can go into a meme.

Weekends & 5 Day, 40 Hour Work Week
Instituted: Sep. 25, 1926

70-50 hour work weeks used to be the norm in the early 1900s (and unfortunately it seems it is once again becoming the norm with our Obama-economy) but that all changed because of market forces with Henry Ford helping a large degree. Actually even prior to Henry Ford’s reduction in hours per week the average work week had been decreasing on its own!

Henry Ford reduced the hours in his worker’s work week for the same reason as he increased their pay. Nobody likes being over not even your great grandpa so having a good life/work balance was a very strong incentive for workers to stay. During the height of the roaring twenty’s when Ford expanded his worker benefits keeping employees was hard especially when so many people wanted to hire your workers. When you go to an auction with a lot of interested buyers prices for items can get very expensive pretty quickly and terms can get kind of difficult.  The same goes with workers in a free market with a great demand for labor like the 1920 roaring 20’s created by libertarian economic policy had become.

8-Hour Work Days & Debunking Politifact’s “Fact Check”
Instituted: Sept. 25, 1926

An 8 hour work week pretty much flows with the idea of weekends and a 40 hour week. However this was one area Politifact thought they absolutely hit the nail on the head… they didn’t.

“A long struggle” that is the preface Politifact gave to this section of their argument. Politifact’s point in the section is there had been laws on the books in small areas demanding smaller work days. They concede many were not well enforced but their point is they were on the books. The author Louis Jacobson further points to the fact that labor unions had held massive protests for this issue which resulted in seven police officers and four workers dead.

Then Louis drops the bombs, “All of this occurred decades before Ford founded his company in 1903.”

You Got Me There... Not Really

So in essence what the author is saying is that someone noticed a problem, tried to fix it and failed. Then he is giving credit where it’s not due, to those that failed. The unions tried to increase wages through coercion and violence and that only resulted in people dying. Jump forward to 1914 Henry Ford did more than what they were trying to do and did it in a voluntary manner that helped him and his employees. The person that solved the problem is obvious to those with a shred of common sense. With this writer’s logic that would mean the lightbulb wasn’t invented by Thomas Edison but the multitudes of people who failed prior to him and gave up.

From here the writer moves to finding cheap cop outs such as the workers had to qualify to earn $5 per day like he doesn’t have to qualify to earn his employer’s health incentive and at some employer’s you can’t even smoke and be employed there. He states he also finds it unfitting that the incentive could be yanked away but that’s called the free market. Those same employees could yank themselves away from Ford at any time too so shouldn’t he have the right to do the same or even reduce the pay in the same manner?

The endgame was the last subheading and it really didn’t do anything for the author’s argument more so just proved mine and the meme’s. The first sentence is actually “Ford’s initiative was not widely copied overnight“. I highlighted and italicized the end because it speaks the truth. Things in the market don’t happen overnight but the fact is they were happening and were being copied over. Bills referenced in the article largely had no effect and were just political fodder to win votes and union support. The Julian Adorney, Fellow at The Foundation For Economic Education  said in reference to that point “By 1938, when President Roosevelt signed the Fair Labor Standards Act (FLSA) mandating a 40-hour workweek, such a law was virtually unnecessary.” I mean gosh even a simplistic view of the times has Louis never seen Cinderella Man people in the Great Depression were begging just to work 20 hours a week let alone needing a law to protect them from over working.

This writer for Politifact is crediting government for solving a problem that was already solved. That is the same as touching a rock as its rolling down a hill and crediting yourself for the momentum or a promoter taking credit for making Justin Beiber famous because he booked a sold out show for him. This is a common government tactic of riding the coat tails of history. A problem gets solved and they just make a law saying they did it. Examples going from minimum wage, gun violence to even teen pregnancy (but that’s another article).

Final Words: Thank Capitalism

Notice in the Politifact article Louis Jacobson never really mentions how the 40 hour work week came to be other than by government force under FDR in 1938. He implies that when that happened it totally revolutionized industry dramatically changing the work week, however, we know that is a bold faced “Pants-On-Fire” lie. The work world was already at a 40 hour work week standard and why? Because of Capitalism.

Under Capitalism, free trade gets to happen and negotiation can freely take place. The left makes it seem like the whole debate is only about capital but without labor, businessmen would have to do everything themselves. There would be no specialization of skills and capital would mean a lot less. So have it be known labor is very important and that is why those workers got a raise in 1914 and a better work week in 1926. Those workers were so valuable companies were bidding to have them. This happens all the time in , in demand industries even today. Nursing, IT and even truck driving when companies need workers their pay and benefits increase and that’s exactly what happened in 1914 & 1926.

So this labor day thank God that we live in a Capitalist country.
-Ron

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