Why did Henry Ford introduce a higher daily wage in 1914?
In 1914, Henry Ford introduced the $5 daily wage to address significant operational challenges caused by the implementation of the moving assembly line. While the new mass production system drastically increased productivity, the resulting monotony and physical strain of the tasks led to high worker turnover rates.12
By raising wages from $2.34 to $5.00 for an eight-hour day, Ford aimed to improve labor productivity and stabilize his workforce. Contrary to some contemporary perceptions, Ford maintained that this decision was not motivated by humanitarianism. Instead, it was a strategic business move that helped transform his employees into potential customers, as the higher pay raised workers above subsistence levels and allowed them to participate in the consumer market for products like the Model T.12