Ford's quote from the time is relevant today: “The owner, the employees, and the buying public are all one and the same, and unless an industry can so manage itself as to keep wages high and prices low it destroys itself, for otherwise it limits the number of its customers. One’s own employees ought to be one’s own best customers.”
But interpreted charitably, it's showmanship. This is a way to show leadership, get a lot of publicity, and hire better workers, so what's not to like?
So true. But I wonder if locking in a steady “home base” to the overall market of price-conscious general consumers makes it worthwhile strategically.
Selling to employees isn’t sustainable long-term, but as a strategy for bootstrapping/sustaining word-of-mouth among your customers it might be very smart.
Its more of a remark about the overall world. Your employees are somebody's customers, your customers are somebody's employees, You are somebody's customer. If nobody in the world makes enough to be a consumer, nobody consumes, and thus you have no customers.
Great example is fast food as well. If you are offering the "lowest cost" food option, and providing the minimum wage, you've got product/purchasing power that are both at the bottom of the food chain. And if employees can't afford to buy your food... then who is going to? Your product doesn't match the market you'd supposedly be selling to.
This is why Ford is considered the creator of the middle class. He took automation and used it as a way to set a different standard for society, one that inherently helped his own product succeed in the long run.
Why is Bezos doing this? Because Amazon succeeds when people have more disposable income. And it starts with his company. sure he might get regulated to do it anyways, but now he is pushing the needle. Regulators might push an overall minimum wage hike to $15 because "if amazon can do it, why cant you?" The merits of that hike aside, know who stands to benefit from people having more money to spend? Amazon.
But sure, a high-productivity business can lead the way on wage increases. Other businesses might have to raise prices to keep up.
I'd like to read more about Ford's effect on wages outside Detroit. This "creator of the middle class" sounds like it might be exaggerated?
FWIW productivity has literally exploded in the last few decades.
workers organised
organise, workers!
Small buisness will go out of business... So amazon is preparing its Monopol. Really smart.
The showmanship and publicity causes pressure on other manufacturers to pay that much. Otherwise, anybody working at a competitor will just be thinking to themselves "I'm just working here to get experience so I can have an edge on other applicants at Ford." Competitors that pay less will be dealing with high turnover unless they match Ford's wages.
And it's not just car companies that have to match wages. Other industries will have to keep up. And once everybody is making decent money, you have more customers.
This would be like claiming that high salaries in Silicon Valley are somehow going to fix inequality nationwide. There is some spillover but it only goes so far.
http://archive.is/QX6kB == https://www.forbes.com/sites/timworstall/2012/03/04/the-stor...
Ford was paying above-par wages to have a more-stable workforce, because his production line was more sensitive to bad/absent workers than the typical factory of his time.
It also came with a fair dose of patronage, like inspections of workers houses to make sure they weren't drinking, and were teaching their kids english.
Source: tech worker in Seattle.
The wages elsewhere aren't going to go up as high but it should have some upward drag
In reality it shows that Ford understood that all of us are in this together (“The owner, the employees, and the buying public are all one and the same”) – and we take it that Ford was not only referring to his own employees but to all employees. So if you want the public to be able to by your goods then we ought to recognise that the public must be able to afford those goods. By extension, even though a capitalist might want to increase profits by keeping wages low he must realise that he decreases the market for his own goods – if enough owners think this way – (“and unless an industry can so manage itself as to keep wages high and prices low it destroys itself, for otherwise it limits the number of its customers”). To sum it up, (“One’s own employees ought to be one’s own best customers.”) doesn't mean that every single one of your employees will buy your product – rather it's an aspirational statement encouraging all owners to pay their employees a living wage and not to myopically fixate on margins and the bottom line.
It would be showmanship if Ford said this and then turned around and paid his employees crap and worked them to the bone, but
“In 1914, Henry Ford made a big announcement that shocked the country. It caused the financial editor at The New York Times to stagger into the newsroom and ask his staff in a stunned whisper, “He’s crazy, isn’t he? Don’t you think he’s crazy?”
That morning, Ford would begin paying his employees $5.00 a day, over twice the average wage for automakers in 1914.
In addition, he was reducing the work day from 9 hours to 8 hours, a significant drop from the 60-hour work week that was the standard in American manufacturing.”
http://www.saturdayeveningpost.com/2014/01/03/blogs/post-per...
You're the uncharitable one. You're either a sink-or-swim type or dead cynical because I can't believe you're not intelligent enough to be able to take what Ford said at face value.
I watched a video today about a young American describing his visit (for a sprained foot) to a clinic in the Netherlands and an emergency room in Germany. He recounted his visits because he was so shocked that at how little he had to pay for an X-ray and meds and how little time he waited to get a referral and how little time he spent in the hospital. I honestly think that there's something deeply damaged at the heart of the American psyche. You've no sense that you are “are all one and the same” to use Ford's words. You can't see why collectively paying taxes for healthcare (everyone's family has an illness at some point in time) and collectively bargaining for cheaper medicines from manufacturers might be overall a good thing. You can't see why paying regular folks a living wage benefits all of society, even those who have to do the paying. No man is an island, we're all in the same boat. But hey, I'm all right Jack, I've got mine huh? There's only so much inequity and hardship people will take before something breaks – history shows us this time and time again.
More than half of Americans support single-payer. Some estimates are as high as 70%.
https://www.cnbc.com/2018/08/28/most-americans-now-support-m...
I absolutely support single-payer and so do most of the people I know.
There isn't a HN thread long enough for the discussion of what it might take to actually get single-payer done.
This shows that whereas the majority of the nation support some form of single-payer option the government (no matter who is in charge) resists it. This means that the government works for the few, not the many. This implies an oligarchy which turns out to be verifiable[0]. Out of interest I looked up all the countries that have neither free nor universal healthcare[1] and cross-ranked them according to their human development index[2]. The list is quite small. What we see is that the US is the only country with a _supposedly_ very high human development index (and the only one in the top 70 of countries) that has a healthcare system that is neither free nor fair. 8 out of the 10 least developed countries in the world are on this list. How Americans are not figuratively up in arms over this is beyond me. I think it is fair to say that the US political system is broken in a very real sense. This is worrying because traditionally only catastrophe curbs inequality this bad[3] and I'm not sure incrementalism works in a broken system. Oh well, time will tell.
Country Free? All? Level Rank
United States No No V 13
Saint Kitts and Nevis No No H 72
Grenada No No H 75
Lebanon No No H 80
Dominican Republic No No H 94
Jordan No No H 95
Suriname No No H 100
Dominica No No H 103
Marshall Islands No No H 106
Turkmenistan No No H 108
Indonesia No No M 116
Iraq No No M 120
Tajikistan No No M 127
Micronesia No No M 131
Kenya No No M 142
Cambodia No No M 146
Angola No No M 147
Cameroon No No M 151
Syrian Arab Republic No No L 155
Zimbabwe No No L 156
Nigeria No No L 157
Mauritania No No L 159
Senegal No No L 164
Comoros No No L 165
Sudan No No L 167
Haiti No No L 168
Afghanistan No No L 168
Gambia No No L 174
Guinea No No L 175
Guinea-Bissau No No L 177
Mozambique No No L 180
Liberia No No L 181
Mali No No L 182
Sierra Leone No No L 184
Burundi No No L 185
Chad No No L 186
South Sudan No No L 187
Niger No No L 189
Somalia No No - ---
[1] https://en.wikipedia.org/wiki/List_of_countries_with_univers...
[2] https://en.wikipedia.org/wiki/List_of_countries_by_Human_Dev...
[3] https://www.businessinsider.com/major-study-finds-that-the-u...
Why is it the #1 destination country for immigrants?
Nevertheless, the US is a country that considers guns an inalienable right, but not healthcare, education or a living wage. Most of the rest of the world would consider that a pathologically insane set of priorities.
Of course, not. US became a top destination in a very simple fashion which doesn't involve neither culture, no marketing: your cousin/friend goes to US, and writes back that there are jobs, and food/clothing is relatively cheap, and you think "aha!", and you are the next. And at some moment the whole community comes to the same realization, and now parents prepare their kids for emigration for better life. And it works even in countries where governments are very hostile to Americans, and promote the idea that US is the capitalist hell :-)
The moment we stop investing, borrowing and loaning, it will all come tumbling down. This is sort of what caused the panic of 2008 and why the governments had to step in with QE.
>Aging populations pose a challenge to the fiscal and macroeconomic stability of many societies
Entitlements, leveraged risk-taking, investment. All these things depend on the next generation.
If the greedy people at the top take too much money for themselves, then the machine stops, no one buys cars, and there company sinks.
With our means of production, couldn't we achieve self sustainability amongst ourselves, or is there always someone slaving away?
"That morning, Ford would begin paying his employees $5.00 a day, over twice the average wage for automakers in 1914. In addition, he was reducing the work day from 9 hours to 8 hours, a significant drop from the 60-hour work week that was the standard in American manufacturing."
For reference $5/day in 1914 is ~$15.62 an hour in 2018 dollars. The similarities likely end there. Unlike Ford, Amazon's hike is not twice the average wage of a fulfillment center employee. A manager at an employment agency recently told me that you can't hire someone for less than $15 an hour to work in a fulfillment center in Reno, NV. Reno is a major fulfillment/shipping hub in the US.
This post should have been titled "Amazon raises pay to keep up with market rates just like every other company".
Amazon has achieved a scale where they have driven down their cost of business per product sold as low as they can. Only other companies operating at a similar scale can compete. By increasing the cost of doing business for smaller competitors that don't have their scale, they are dramatically increasing the cost of anyone else doing what they did to get where they are.
I'm sure Jeff feels good about this more. He can be rightly proud of it. He's managed to build a business successful enough that he can afford to do it. However don't lose sight of the fact this is also a shrewd and actually pretty aggressive business move.
Says everything right there.
> At the time, workers could count on about $2.25 per day, for which they worked nine-hour shifts. It was pretty good money in those days, but the toll was too much for many to bear. Ford's turnover rate was very high. In 1913, Ford hired more than 52,000 men to keep a workforce of only 14,000. New workers required a costly break-in period, making matters worse for the company. Also, some men simply walked away from the line to quit and look for a job elsewhere. Then the line stopped and production of cars halted. The increased cost and delayed production kept Ford from selling his cars at the low price he wanted. Drastic measures were necessary if he was to keep up this production.
https://www.forbes.com/sites/timworstall/2012/03/04/the-stor...
His factory needed a stable workforce, more so than most at the time -- because one screw-up could stop the line. And he was willing to pay for this. Hire the most stable, least-drunk, workers around.
Of course he wasn't above some good PR, either. (And this was also the era when you could get a patent on a perpetual motion machine, right?) He'd be thrilled to see his PR quoted uncritically a century later.
This shift to more stable employment wasn't all gravy, by the way. In a factory town where the average guy keeps a job for a few months at a time, a recession means that it takes him a bit longer to find the next job... everyone's looking at the same time. But in a factory town where the average guy keeps his job for decades, layoffs are much more serious. Which is part of why the "great" depression gets this adjective in out memory, and others don't.
> The man whose whole life is spent in performing a few simple operations, of which the effects too are, perhaps, always the same, or very nearly the same, has no occasion to exert his understanding,or to exercise his invention in finding out expedients for removing difficulties which never occur. He naturally loses, therefore, the habit of such exertion, and generally becomes as stupid and ignorant as it is possible for a human creature to become.
> The torpor of his mind renders him, not only incapable of relishing or bearing a part in any rational conversation, but of conceiving any generous, noble, or tender sentiment, and consequently of forming any just judgement concerning many even of the ordinary duties of private life. Of the great extensive interests of his country he is altogether incapable of judging; and unless very particular pains have been taken to render him otherwise, he is equally incapable of defending his country in war.
> The uniformity of his stationary life naturally corrupts the courage of his mind, and makes him regard with abhorrence the irregular, uncertain, and adventurous life of a soldier. It corrupts even the activity of his body, and renders him incapable of exerting his strength with vigour and perseverance, in any other employment than that to which he has been bred. His dexterity at his own particular trade seems, in this manner, to be acquired at the expense of his intellectual, social, and martial virtues. But in every improved and civilized society this is the state into which the labouring poor, that is, the great body of the people, must necessarily fall, unless the government takes some pains to prevent it.
Vehicle production lines are now heavy users of automation, and workers skilled not only in assembly, but in process improvement, scrum, lean. Not simply being manual workers is to Amazon's benefit, as it was to Ford for he recognised the impact an individual worker had on the end-to-end production; embodied in concepts like TPS, lean, six sigma, but with long histories.
In the Bay area? Sure.
I live in suburbs outside Portland, OR. My wife and I together make about $150k/year. We both own cars less than 3 years old. We only own 1 house, but we take a 2-week vacation a 1-week vacation every year.
My point was that kidsnow said $200-500k is middle class, but it really depends on location. It often feels that the majority of people on Hacker News are living in a Silicon Valley bubble. They talk as if $1,000,000 for a 1500 sq ft house is normal, as if $150k is decent entry-level wage, and...you get the idea.
$200-500k is middle class for Silicon Valley, but the higher end of that range is definitely upper class where I live.
https://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=8edfd12967...
If you have an investment account (That isn't a 401(k), 403(b), Roth IRA etc.) with hundreds of thousands that didn't happen from a single lucky investment (Like buying Apple or Amazon 10+ years ago), then you're probably more upper class.
Myself, outside my 401(k), I don't have any investments, mainly because I'm more concerned with eliminating my debts than taking on risks beyond my retirement account. But my wife and I make "only" $150k. If we made 300k, I might have some investments.
Again, though, we need to stop focusing on specific dollar amounts, since cost of living varies so wildly around the country. Get out of the SF Bay bubble.
The 2 br, 1 bath, 800 sq foot apartment I live in 3 years ago for $900/month would probably be $2,500 in SV. Likewise, the 1850 sq ft, 3 br, 2.5 bath house I live in now that I bought for $338k in 2015 would probably have been over $1,000,000 in SV.
If you recently bought a $1M plus condo in SF, you are most certainly upper class. I don’t care if it was a 2 bedroom apartment.
I wouldn't consider working two jobs to be middle class unless you meant two people in the household working one job each, unless there are a lot of people working two jobs to maintain a middle class lifestyle.
Hell, if you have a lawn in Sf you are super wealthy.
I wanted to back you up in that you are right that it's behavior that defines classes. But it's more the part that matters, your means of producing wealth. If your money works for you or employs others to work for you, you're investment class or capitalist class. Punching a clock, or picking up a salary check means you're working class. The third class are those who slip below maintaining employment, I call them "capitalism's reserve army" but there's probably a better term for the unemployed.
These little ego boosting distinctions people come up with "upper working class" are meaningless.
No, that means the middle class can't afford to live in SF. This isn't the first time I've heard this, and I don't know why anyone might think this. As a more extreme example, "middle-class in Pebble Beach is $1MM/year or $20MM net worth". No, there is no middle-class in Pebble Beach, only rich people live there.
It's why I try to define "middle-class" by specific behaviors and possessions, not by dollar amounts.
A 700 sq ft 1 bed/1 bath can easily be $3,000/mo in a desirable neighbourhood such as the East Village. A nicer doorman condo somewhere like Flatiron or the Upper West Side can be amywhere from $10k/mo to $30k/mo for 1000-1500 sq ft (or $3m to $5m for purchase).
And here I was thinking that SF or SV was expensive...
$200k-$500k of probably most often part of the classical capitalist-society middle class (petit bourgeoisie) in most of the country, though in some cases it will be high income proletariat (possibly proletarian intelligentsia), but at that level you are probably either driving a substantial share of your income from labor or forgoing income worth a substantial fraction of your current income by avoiding wage labor, so probably not the classical capitalist society upper class (pure capitalists / haut bourgeoisie.)
It sounds to me like you've got valley-vision. Time to travel and see the world, or at least more of the country you live in.
0: https://en.wikipedia.org/wiki/Household_income_in_the_United...
Just because you have to think about money sometimes doesn't make you middle class. Your neighbors having more money than you also doesn't make you middle class.
[0] https://www.mercurynews.com/2018/02/15/income-inequality-in-...
But that's the problem with things like this. We keep focusing on the top and the bottom but not the middle.
So we pass laws purporting to tax the rich (but really anyone with a full time job) and then the rich hire accountants and only the middle class pays. Then we clamor for a higher minimum wage, but the middle class already makes more than minimum wage, so the effect on them is to raise the prices they have to pay.
What we need isn't just to get the people at $10 to $15, it's to get the people at $20 to $35 or $50.
Exactly. $10-$15/hr is absolute bare minimum to SURVIVE now unless you live in an extremely rural area. $15/hr is coming too late.
At the high points, 20% of the total U.S. population were enslaved. At that point, it's not just an exception, it's a problem with the entire premise, even if the entire rest of the population was 'middle class', which they weren't.
What allowed the U.S. economy to function with an unusually large portion of _white_ people being "middle class" (compared to Europe)... was all the African people who weren't. There's no reason to treat those 20% of people as not part of the U.S. economy, they were a _crucial_ part. If we were to look at what portion of the _entire_ population of the U.S. was "middle class", including those 20% enslaved people, for whatever definition of 'middle class', that'd be closer anyway. There's no reason to look at things without them though, as if they were just a footnote. 20% of the population!
The economies were clearly related.
> The North did originally have some enslaved people.
Yes, and the ending of that did not retard the economy or reduce the middle class in any detectable way. The middle class increased throughout the 19th century.
// Capitalists in the North profited by investing in banks that handled the exchange of money for people, or in insurance companies that provided insurance for the owners’ investments in enslaved people. So did foreign investors in Southern securities, some of which were issued on mortgaged slaves. The hotbed of American abolitionism — New England — was also the home of America’s cotton textile industry, which grew rich on the backs of the enslaved people forced to pick cotton. The story of America’s domestic slave trade is not just a story about Richmond or New Orleans, but about America. //
https://opinionator.blogs.nytimes.com/2015/04/03/how-the-sla...
https://www.amazon.com/exec/obidos/ASIN/0345467833
https://www.amazon.com/Slaverys-Capitalism-American-Economic...
https://www.amazon.com/Half-Has-Never-Been-Told/dp/046504966...
"“In the decades between the American Revolution and the Civil War, slavery—as a source of the cotton that fed Rhode Island’s mills, as a source of the wealth that filled New York’s banks, as a source of the markets that inspired Massachusetts manufacturers—proved indispensable to national economic development,” Beckert and Rockman write in the introduction to the book. “… Cotton offered a reason for entrepreneurs and inventors to build manufactories in such places as Lowell, Pawtucket, and Paterson, thereby connecting New England’s Industrial Revolution to the advancing plantation frontier of the Deep South. And financing cotton growing, as well as marketing and transporting the crop, was a source of great wealth for the nation’s merchants and banks.”"
https://www.forbes.com/sites/hbsworkingknowledge/2017/05/03/...
Up in the hollers you can still find some very poor working class people and its noticeable that the forces recruit from these populations (this is from conversations with USAF personnel)
I'm not sure exactly what they meant. i'm not sure if "middle class people" and "working class people" are the same thing. I'm not sure if a "large working class population" contradicts "a nation of middle class people."
I interpreted the original claim as suggesting that the U.S. had _more_ "middle class people" than European nations, and had much much fewer people who were not "middle class people" compared to contemporaneous European (or other) nations. I am not sure how we define "middle class" or compare the U.S. and Europe "even in colonial times". I am sure that enslaved people were not "middle class" though.
But where I found my data that at some points ("colonial times " and shortly after) up to 20% of the entire U.S. population was enslaved people (who were obviously not "middle class" and to me present some serious problems with considering the U.S. at those times "a nation of middle-class people") by googling, and finding this: https://faculty.weber.edu/kmackay/statistics_on_slavery.htm
The last line is total U.S. population. We can see that in 1750, 934,340 (white) + 236,420 (black) = 1,170,760. 236,420 / 1,170,760 == 20.1%. "colonial times". 1790, specifically breaking out free vs enslaved Black people now, also roughly 20% of the total population was enslaved people. The percentage starts to go down after that, by 1860 down to "only" 12%, which is still enough people who are clearly not middle class that I'm not sure I'd want to call it a "nation of middle-class people".
Wealth and Democracy: A Political History of the American Rich by Kevin Phillips http://a.co/d/glFxd7G
That the rich get richer is just math. Without deliberate wealth redistribution, growing inequity is inevitable.
Gross inequity and democracy are incompatible. A democratic society must balance capitalism and socialism to survive.
Further, we are in a noticeable amount of ways not a free market. If I took my car engine (the free market) to a mechanic and said "It's not working after I just made a couple of random small changes to it", the mechanic would rightfully laugh me out the door because me just meddling with a complex system, even if its only a small amount, can have disastrous side effects.
If anything this was a concession from Amazon, because Amazon workers were supporting a bill against Amazon, which probably had more in store for the company than just a minimum wage raise.