Seth's Blog : What Henry Ford understood about wages

Every time Ford increased the productivity of car production (in one three-year period, he lowered labor costs by 66% per car), he also raised wages. Not merely because it's the right thing to do. He did it because well-paid workers...

What Henry Ford understood about wages

Every time Ford increased the productivity of car production (in one three-year period, he lowered labor costs by 66% per car), he also raised wages.

Not merely because it's the right thing to do.

He did it because well-paid workers had more to spend. On houses, on clothes, and of course, on cars.

There's a positive ratchet here.

You can't shrink your way to greatness.

When you enable your workers (and your customers) to do more, connect more, produce more and get paid more, you create a positive system. The goal isn't to clear the table, the goal is to set the table.

       

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