There is nothing to running a business by custom--to saying: "I pay the
going rate of wages." The same man would not so easily say: "I have
nothing better or cheaper to sell than any one has." No manufacturer in
his right mind would contend that buying only the cheapest materials is
the way to make certain of manufacturing the best article. Then why do
we hear so much talk about the "liquidation of labour" and the benefits
that will flow to the country from cutting wages--which means only the
cutting of buying power and the curtailing of the home market? What good
is industry if it be so unskillfully managed as not to return a living
to everyone concerned? No question is more important than that of
wages--most of the people of the country live on wages. The scale of
their living--the rate of their wages--determines the prosperity of the
country.
Throughout all the Ford industries we now have a minimum wage of six
dollars a day; we used to have a minimum of five dollars; before that we
paid whatever it was necessary to pay. It would be bad morals to go back
to the old market rate of paying--but also it would be the worst sort of
bad business.
First get at the relationships. It is not usual to speak of an employee
as a partner, and yet what else is he? Whenever a man finds the
management of a business too much for his own time or strength, he calls
in assistants to share the management with him. Why, then, if a man
finds the production part of a business too much for his own two hands
should he deny the title of "partner" to those who come in and help him
produce? Every business that employs more than one man is a kind of
partnership. The moment a man calls for assistance in his business--even
though the assistant be but a boy--that moment he has taken a partner. He may himself be sole owner of the resources of the business and sole director of its operations, but only while he remains sole manager and sole producer can he claim complete independence. No man is independent as long as he has to depend on another man to help him. It is a reciprocal relation--the boss is the partner of his worker, the worker is partner of his boss. And such being the case, it is useless for one group or the other to assume that it is the one indispensable unit. Both are indispensable. The one can become unduly assertive only at the expense of the other--and eventually at its own expense as well. It is utterly foolish for Capital or for Labour to think of themselves as groups. They are partners. When they pull and haul against each other--they simply injure the organization in which they are partners and from which both draw support.
It ought to be the employer's ambition, as leader, to pay better wages
than any similar line of business, and it ought to be the workman's
ambition to make this possible. Of course there are men in all shops who
seem to believe that if they do their best, it will be only for the
employer's benefit--and not at all for their own. It is a pity that such
a feeling should exist. But it does exist and perhaps it has some
justification. If an employer urges men to do their best, and the men
learn after a while that their best does not bring any reward, then they
naturally drop back into "getting by." But if they see the fruits of
hard work in their pay envelope--proof that harder work means higher
pay--then also they begin to learn that they are a part of the business, and that its success depends on them and their success depends on it.
"What ought the employer to pay?"--"What ought the employee to receive?" These are but minor questions. The basic question is "What can the business stand?" Certainly no business can stand outgo that exceeds its income. When you pump water out of a well at a faster rate than the water flows in, the well goes dry. And when the well runs dry, those who depend on it go thirsty. And if, perchance, they imagine they can pump one well dry and then jump to some other well, it is only a matter of time when all the wells will be dry. There is now a widespread demand for more justly divided rewards, but it must be recognized that there are limits to rewards. The business itself sets the limits. You cannot distribute $150,000 out of a business that brings in only $100,000. The business limits the wages, but does anything limit the business? The business limits itself by following bad precedents.