effects on the social class:
Henry
Ford had made three major impacts on the social classes. First, Ford introduced
the assembly line system. Since production was split into very simple tasks, he
lowered the skill level necessary to work in a factory. Not only was it useful
for manufacturing automobiles, it started a very efficient system for a wide
range of processing factories. This allowed a large amount of products to be
produced at lower prices.
This allowed the middle class to rise by lowering the entry point into the middle class. By making a car that would have cost $10,000 to manufacture without the assembly line, it would keep from the middle class expanding. Now with the assembly line, cars would be produced at nearly half the cost attracting lower income persons to fill in the middle class.
Second, he proposed the “living wage concept”. Before Ford, most well-known companies centered their pay structure on priority cost requirements. They paid their employees with bare minimum wages so that they could get workers and control costs.
On the other hand, Ford thought for the long run. If he paid his employees enough to be able to afford cars, he would have a readymade market for his product. Although he didn't force his employees to buy Ford cars, any Ford employee would know that it might not look good for his career if he drove up in the factory with a new Chevrolet.
Also, much of the money he paid out would return to Ford. This is the modern foundation for the minimum wage concept. The main idea is that people have to be able to afford the items they produce in order for the industrial economy to function effectively.
This allowed the middle class to rise by lowering the entry point into the middle class. By making a car that would have cost $10,000 to manufacture without the assembly line, it would keep from the middle class expanding. Now with the assembly line, cars would be produced at nearly half the cost attracting lower income persons to fill in the middle class.
Second, he proposed the “living wage concept”. Before Ford, most well-known companies centered their pay structure on priority cost requirements. They paid their employees with bare minimum wages so that they could get workers and control costs.
On the other hand, Ford thought for the long run. If he paid his employees enough to be able to afford cars, he would have a readymade market for his product. Although he didn't force his employees to buy Ford cars, any Ford employee would know that it might not look good for his career if he drove up in the factory with a new Chevrolet.
Also, much of the money he paid out would return to Ford. This is the modern foundation for the minimum wage concept. The main idea is that people have to be able to afford the items they produce in order for the industrial economy to function effectively.
Caption: Picture of Henry Ford in this Fifteen Millionth Model-T.