FORD AND WAGES.

Star (Christchurch), Volume XLIV, Issue 193, 15 August 1931, Page 9

FORD AND WAGES.

Uneconomic Effects of % the Cut. FARM IS NOW USELESS. Emphatic views on the question of a cut in wages are held by Henry Ford. The “New York Tmes” recently published an interview which Mr. James C. Young had with the famous industrialist at Dearborn. Broadly speaking, Mr. Ford thinks of the present depression as involving two problems—one that concerns industry, the other agriculture. To sustain the first and make possible the recovery of both, he would maintain high wages. “Wages,” he aays, “are the only thing that should be high in this country.” He is convinced that no greater misfortune could befall the nation than the lowering of the wage scale. If we go backward now “we shall need twenty years to reach our former position.” He would do away with out worn things, substituting new methods for old. If this is done, then we shall find “that industry is only at the beginning of its possibilities.” As for agriculture, he thinks the farm, as it is now conducted, has reached the end of its usefulness; the old-fashioned farm of ten acres or a hundred represents “the extreme of inefficiency.” Moreover, he believes that the farm should not be a place where food is the principal product; it should produce other commodities designed for use in industry. In this way he wonld join industry to the farm, enabling one to supplement the other. He thinks of apartment communities near great industrial centres—and both surrounded by great farms. On these farms he would employ industrial labour in off seasons, bringing it back to plants as opportunity permits. Few men have been confronted with the economic crisis to the degree with which it has presented itself to Mr. Ford. Both in the U.S.A. and abroad, he has felt its reverberations a 6 few others have, for he is unique as an international employer. The first question put to him naturally dealt with the much discussed problem of wages. What about the economists who bold that there can be no general restoration of employment without lower wages and therefore lower prices, leading to enlarged consumption? “They are wrong,” Mr. Ford said, with great emphasis. “I never was able to reduce the price of automobiles until I could first increase wages. To put the matter in the way of the economists commodity prices went down and wages went up. That is what they now say is impossible, for they believe that when commodity prices go down, wages must go down, too. The trouble with economists is that they read more than they think. The economic system is not to be found in books, but in actual affairs. Many of the book theories have been scrapped, whether the economists know it or not. Spreading the Wages. “I often hear the statement made that it would be better to have twice as many men at work, producing double the amount of goods at half their usual pay, than to keep the usual number at work upon the ordinary scale. That observation shows how little thought is given to the matter. In the first place, a poorly paid workman never produces the quality or volume of work of one who is well paid. The mere doubling of numbers would not mean a doubling of production. Quality and volume would both fall off, making production costlier instead of cheaper. “The man receiving only half of his proper wage would be brought to a low level of living, without any surplus to spend. I had rather put ten men to work at 7 dollars a day than twenty men at 3.50 dollars, because the 7-dollar men would have a surplus to spend which would put other men to work, while the 3.50-dollar men would be barely living The higher the wage, the greater the purchasing power and the wider the variety of work that is set in motion A low wage makes poverty general and permanent. “The progress of this country was not accomplished by impoverished workmen. When a man has only enough to buy bread he is a poor member of society and the worst kind of customer. What •.rood is a man who just makes a living? He isn’t a market for anything. It should be our object to see that every man who works receives enough to allo,w him a comfortable margin both in time and money. In that way —and that -way onlv—will it become possible to increase his consuming power. “The mad who suggests a wage cut injures not only the worker, but the whole structure of mdustfy, because he denies the very means to the end which he seeks. . . . Yes, it is very plain. “Half-paid men do not increase the consumption of goods. Workmen who receive only part of their proper wages are unable to buy houses or radios or automobiles or education for their children. Cut wages and you impoverish a large number of fairly prosperous workmen without helping the others. That would spread the depression, instead of helping to correct it. I have no intention of cutting wages.

Poor Management. “There is no short cut to recovery,” continued Mr. Ford; “we must find the way by thinking, courage and hard work. The kind of thinking that leads to wage cuts is worse than any other. If we reduced wages on a broad scale our purchasing power would diminish •© Am* that the fall in prices would startls even those who want lower wages . . Ib lower the wage rate rather than improve production methods is simply a concession to poor management. If I had do other reason for believing in high wages I should still believe in them because they compel leaders to work.” When Mr. Ford’s attention was called to the fact that farmer’s pay was lower to-day n the United States than it had ever been, he said the reason was that the old-fashioned farm had reached the end of its usefulness. The farmer had learned nothing from business except to stress marketing when he should stress production and production costs. He thought they were within eight of the time when industry would use the agricultural surplus of the farm and wbea the farm would use the industrial surplus labour. Mr. Ford contended that the economic discussion of the time had been restricted too much to the wage scale, production, and eoiiKumption. He held one primary difficulty to be the cost of business as represented by money paid for the use of capital. The practice of borrowing money from banks or bondholders made business tremendously expensive. Intercut chargee and not wages were the burden of business. It was interest charges that should come down and not wages. Interest was the heaviest burden of modern man. The collection of interest in one form or another enabled a numerous yet a small clase to live without work. What was needed was more work for everyone, especially for the leaders—they had not been working enough or thinking enough.