Henry Ford's Experiment to Build a Better Worker
By RICHARD SNOW, WSJ 05/09/13
Early in 1914 Henry Ford, spurred by a combination of wanting to cut down the high turnover in his workforce and what seems to have been genuine altruism, announced that henceforth the base wage in his factory would be five dollars a day. This at a stroke doubled the prevailing salary for industrial work, and it caused a sensation.
Henry Ford posed in an early model at his plant in Detroit, in 1900.
.But Ford company workers discovered that achieving their five-dollar day came with some rigid stipulations. To qualify for his doubled salary, the worker had to be thrifty and continent. He had to keep his home neat and his children healthy, and, if he were below the age of twenty-two, to be married.
Book Excerpt
From the forthcoming book "I Invented the Modern Age: The Rise of Henry Ford" by Richard Snow.
.The job of ensuring such behavior went to John Lee. He was in charge of what today goes under the pallid name of "human resources," and was one of the very few of Ford's high executives who was universally liked.
Lee put out a booklet called Helpful Hints and Advice to Employees, which opened by declaring a "sole and simple" purpose that was far from simple. It was "to better the financial and moral standing of each employee and those of his household; to instill men with courage and
a desire for health, happiness, and prosperity. To give father and mother sufficient for present and future; to provide for families in sickness, in health and in old age and to take away fear and worry. To make a well rounded life and not a mere struggle for existence to men and their families, and to implant in the heart of every individual the wholesome desire to Help the Other Fellow, whenever he comes across your path, to the extent of your ability."
This irreproachable aim was advanced by investigators for the newly formed Sociological Department who brought their questionnaires to the home of every Ford employee. The agents weren't mere busybodies. They'd been trained to offer useful advice on hygiene and on how to manage household finances. Behind them stood the Ford legal department, whose lawyers would help, free, with everything from buying a house to becoming an American citizen. Should an employee get sick or be injured, the company maintained a full-time staff of 10 doctors and 100 nurses.
The agents, initially recruited from among Ford's white-collar workers, soon grew to a force 200 strong. Its members had to assess some 13,000 people, and do it quickly. Naturally they met resistance, from newly arrived Russians, for instance, whose memories of the czar's secret police were all too fresh, and from the occasional descendant of an original settler whose family had been in Detroit for generations and who didn't care to have some company hireling tell him how to live like a decent American.
For the most part, though, the workers took the intrusion into their lives philosophically. A few nosy questions were a minor ordeal if they opened the door to the highest-paying job in the industry.
William Knudsen, Ford's immensely capable lieutenant, who by now was busy sowing branch assembly plants across the nation, opposed the plan. He told his biographer that "as he saw it, the men were entitled to the money and, having earned it, it was theirs to spend without answering the snooping questions of investigators."
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.Mr. Knudsen was greatly amused to learn about a boardinghouse close to the factory on Manchester Avenue where 11 young Ford workmen lived. None of them was married, but whenever an agent stopped by, the man he was visiting would borrow the generous-spirited landlady and present her as his wife. Fortunately, said Mr. Knudsen, the social workers never called on all 11 at the same time.
One stipulation of the new mandate was that a Ford worker needed permission from a Ford executive if he wanted to get his own automobile. Mr. Knudsen was in Mr. Lee's office when an employee came in and said, "Mr. Lee, I would like to buy a car."
"Got any money?"
"I have seven hundred dollars."
"Do you have a family?"
"Yes, a wife and four children."
"Is the furniture paid for?"
"Yes."
"Have you any insurance?"
"Yes."
"All right, you can buy a car."
"Thanks, Mr. Lee." On his way out the door the man turned and said, "Oh, by the way, Mr. Lee, my wife is going to have another baby. I'm going to buy a Buick."
The occasional worker was openly defiant. When asked if he had any savings, one man told the investigator that he had invested his earnings "in houses and lots." When the skeptical agent pressed him for details, the man explained he'd meant "whorehouses and lots of whiskey."
On the other hand, there was Joe, who had come from a peasant life in Russia with his wife and six children.
F.W. Andrews, one of the Ford investigators (they were later to be given the less provocative title of "advisors"), told his story. "Life was an uphill struggle for Joe since landing in America," Mr. Andrews wrote. But he was willing to work, and work hard, digging sewers and farming, making his way to Detroit where "for five long months he tramped in the 'Army of the Unemployed'—always handicapped by his meager knowledge of the English language, and unable to find anything to do." Joe's wife "worked with the washtub and the scrubbing brush when such work could be found."
Joe landed a job at Ford, and that is when Mr. Andrews entered his life, to find him living in "an old, tumbled down, one and a half story frame house." Joe and his family were in "one half of the attic consisting of three rooms, which were so low that a person of medium height could not stand erect—a filthy, foul-smelling home." It contained "two dirty beds…a ragged filthy rug, a rickety table, and two bottomless chairs (the children standing up at the table to eat)." The family owed money to their landlord, to the butcher, to the grocer. The eldest daughter had gone to a charity hospital the week before. Mr. Andrews said the remainder of the family "were half clad, pale, and hungry looking."
Mr. Andrews at once got the pay office to issue Joe's wages daily instead of every two weeks. He secured a $50 loan, and such was the Sociological Department's seriousness of purpose then that Mr. Andrews, not Joe, borrowed the money. Mr. Andrews paid the butcher and the landlord, rented a cottage, and filled it with cheap but sound new furniture, new clothes, and, he said, "a liberal supply of soap."
Then the messianic moment. Mr. Andrews "had their dirty, old, junk furniture loaded on a dray and under cover of night moved them to their new home. This load of rubbish was heaped on a pile in the backyard, and a torch was applied and it went up in smoke.
"There upon the ashes of what had been their earthly possessions, this Russian peasant and his wife, with tears streaming down their faces, expressed their gratitude to Henry Ford, the Ford Motor F -0.46%Company, and all those who had been instrumental in bringing about this marvelous change in their lives."
Were those tears only of gratitude as Joe watched this strange pyre of his family's old life?
Today the Sociological Department might seem the essence of suffocating paternalism, and many felt it so even at the time. Certainly no other big industrial operation had anything like it. But with its medical and legal services, and the English language school it ran for the company's thousands of immigrant workers, the department appears to have done more good than harm. In 1914 the average Ford worker had $207.10 in savings. For those who stuck with the company during the next five years, the average had risen to $2,171.14.
The reformer Ida Tarbell went to Highland Park planning to expose the oppressive Ford system. Instead she wrote, "I don't care what you call it—philanthropy, paternalism, autocracy—the results which are being obtained are worth all you can set against them, and the errors in the plan will provoke their own remedies."
Copyright © 2013 by Richard Snow. From the forthcoming book "I Invented the Modern Age: The Rise of Henry Ford" by Richard Snow to be published by Scribner, a division of Simon & Schuster Inc. Printed by permission.
A version of this article appeared May 10, 2013, on page B1 in the U.S. edition of The Wall Street Journal, with the headline: Henry Ford's Experiment To Build a Better Worker.
