Henry Ford’s Wisdom

Not only was it a matter of social justice, Ford wrote, but paying high wages was also smart business. When wages are low, uncertainty dogs the marketplace and growth is weak. But when pay is high and steady, Ford asserted, business is more secure because workers earn enough to become good customers.[1]

While reading a recent story about a conservative radio host blaming workers and minorities for Detroit’s problems, I decided to explore Henry Ford’s original social contract that effectively created modern Detroit in the early 1900s. It worked remarkably well for many decades, which tells me again that a healthy middle class is key to our economic prosperity. Costco currently is applying the same approach to its personnel policies with good success.

Yes, we still need to understand all the forces that led to Detroit’s decline. The fact that it took so many years strongly suggests that we neglected with awareness the opportunity to course-correct; through retraining, R&D, venture investment or otherwise. A smart, hard working and well-trained workforce idled for many years until generations began moving elsewhere or fell into poverty.

The road back will be much harder now, and we can start now, but this must be done thoughtfully and without malice. We still are all in this together, as long as we see ourselves as being part of the same nation.


  1. When Capitalists Cared, NYT, 2012.09.02

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