Henry Ford is known for many things. Cars. Assembly lines. Innovation and generally being an industrial boss.He was also a pioneer of “welfare capitalism.” He sought to treat his workers well in order to reduce the high turnover at his factories. He would often have to hire 300 men a year for 100 positions.
This high turnover caused inefficiency – something that Ford could not stand.
In 1914, he began paying his workers $5 a day, which is equivalent to $120 today. This more than doubled the current wage rate of most of his workers and shocked the country.
It turned out to be an excellent decision though. The best mechanics moved to Detroit to work for Ford. Not only did they not leave, which lowered the turnover rate, but their skills increased productivity and lowered training costs.
