-
Ford CEO Jim Farley learned from older employees that some young workers at the carmaker were taking shifts at Amazon to make ends meet, he said at the Aspen Ideas Festival. Farley said he drew on founder Henry Ford’s decision to raise factory wages to $5 a day in 1914 to make temporary workers into full-time employees. Young people have previously eschewed manufacturing jobs due to low wages.
Some economists credit carmaker Henry Ford for jump-starting the American middle class in the 20th century when, in January 1914, he hiked factory wages to $5, more than double the average wage for an eight-hour work day.
More than 100 years later, facing the reality of many employees “barely getting by,” Ford CEO Jim Farley said he took a page out of the founder’s playbook.
The carmaker’s chief executive recognized the need to make a change in his workplace when he spoke to veteran employees during union contract negotiations and learned young Ford employees were working multiple jobs and getting inadequate sleep due to low wages, Farley said in an interview with journalist and biographer Walter Isaacson at the Aspen Ideas Festival earlier this year.
“The older workers who’d been at the company said, ‘None of the young people want to work here. Jim, you pay $17 an hour, and they are so stressed,’” Farley said.
Farley learned some workers also held jobs at Amazon, where they worked for eight hours before clocking in to a seven-hour shift at Ford, sleeping for only three or four hours. At a Ford Pro Accelerate event in September, the CEO said entry-level factory workers told him they were working up to three jobs.
As a result, the company made temporary workers into full-time employees, making them eligible for higher wages, profit-sharing checks, and better health care coverage. The transition was outlined in 2019 contract negotiations with the United Auto Workers (UAW), with temporary workers able to become full-time after two years of continuous employment at Ford.
“It wasn’t easy to do,” Farley said. “It was expensive. But I think that’s the kind of changes we need to make in our country.”
Ford’s own decision to double factory wages in 1914 was not altruistic, but rather a strategy to attract a stable workforce, as well as provide a stimulus for his own workers to be able to afford Ford products.
“He said, ‘I’m doing this because I want my factory worker to buy my cars. If they make enough money, they’ll buy my own product,’” Farley said. “It’s a self-fulfilling prophecy, in a way.”
Farley, a proponent of growing U.S. manufacturing productivity to support the essential economy, has advocated for young workers to have strong trade experiences. Earlier this month, he sounded the alarm on the shortage of manual labor jobs, saying in an episode of the Office Hours: Business Edition podcast that Ford had 5,000 open mechanic positions that have remain unfilled, despite an up-to $120,000 salary for the role.