Five-dollar day

On January 5, 1914, Henry Ford announced that Ford Motor Company would pay its workers a minimum of five dollars for an eight-hour day, more than doubling the prevailing wage of roughly $2.34 for a nine-hour shift. The announcement generated international headlines and long lines of applicants outside the Highland Park plant in Michigan. Ford framed it as a decision rooted in both principle and productivity, telling reporters that workers needed enough income to buy the products they were building.

The wage increase came with conditions. To qualify for the full five dollars, workers had to submit to inspections by Ford's newly created Sociological Department, initially headed by John R. Lee and later by the Reverend Samuel Marquis. Investigators visited workers' homes, asked about their drinking habits, checked the cleanliness of their living conditions, and assessed whether they were saving money appropriately. Workers who failed the inspection had their bonus withheld until the issues were corrected. Female workers were not included in the original announcement and were extended equal compensation beginning in 1916.

The policy addressed a crisis of Ford's own making. The moving assembly line, introduced at Highland Park in 1913, had reduced chassis assembly time from over twelve hours to roughly ninety minutes, but the monotony drove workers away at extraordinary rates. Stephen Meyer's study of Ford's labor practices documented annual turnover of three hundred and seventy percent in 1913, meaning the company had to hire more than fifty thousand workers in a single year to maintain a workforce of roughly fourteen thousand.

Other manufacturers gradually followed Ford's lead, though many resisted. The five-dollar day demonstrated that high wages could reduce turnover and increase productivity, an insight that influenced labor economics for decades. It also established a template that would recur throughout the twentieth century, in which employers offered financial compensation as a substitute for the autonomy, variety, and meaning that industrial work had removed.