Another bogus argument against raising the minimum wage: The “Ford myth”

The minimum wage has been a fact of American economic life since 1938. And yet, 76 years later, right-wing politicians and their corporate allies are still fighting it. Maybe I haven’t been paying attention, but I don’t remember a time when arguing against the existence of the minimum wage—not just against raising it—was even a topic for discussion. So, you’ll excuse me if I am outraged by an outbreak of arguments contending that a federally mandated minimum wage is bad for America.

In the conservative echo chamber, one line of argument is that lefties have been erroneously using the example of Henry Ford’s $5-a-day wage, 100 years ago,  as a justification for raising the minimum wage. The argument alludes to what is being dubbed “The Ford Myth.” The myth, goes the argument, is that Henry Ford raised his factory workers’ wages to $5 a day as a way of enabling the workers to buy the products—cars—that they were producing, and that his motives were, at least in part, charitable.

To their credit, the debunkers appear to be correct. Historical records do, indeed, show that Henry Ford raised wages not to get his workers behind the wheel of his products or improve their lives, but rather to reduce turnover at his factories. Forbes Magazine summarizes the real motives this way:

It simply isn’t true that his motive was to enable his workers to buy his cars. Instead, Ford calculated that by making his wages more attractive than his competitors in the market for industrial labor, he would gain by reducing turnover costs. In 1913, to maintain a factory workforce of about 14,000, Ford had to hire more than 52,000 men. The assembly line jobs were very tiresome and repetitive. Workers often quit, sometimes even in the middle of a shift.

With his business experience and the logic of human action as his guide, Ford concluded that the cost of additional pay would be more than offset by the reduced costs of labor turnover.

Well, all right, then. Myth debunked.  If only the argument stopped there.

Instead, grasping for another way to undermine the minimum wage concept, conservative writers take it one illogical step too far. In an article called “ Obama Is The Latest To Fall For The Henry Ford Urban Myth,” Forbes’ George Leef accuses President Obama of naivete and disingenuousness, saying:

Obama leaps from the premise that if one business owner profited from voluntarily increasing worker pay, then it must be a good policy for the government to compel all business owners (or at least those who hire low-skilled workers) to raise worker pay.

Perhaps President Obama did get Ford’s motivations wrong. In the face of the historical evidence, it’s hard to argue against that characterization. But, even without an advanced degree in economics, I can see that the writer is ignoring one huge economic truth: In our capitalist economy, very little in the way of benefits for workers has been accomplished without a government mandate. Unfettered capitalism—the preferred system of the super-rich—has a dismal record when it comes to looking out for the good of the worker. Waiting around for corporations to make moves designed to better the lives of their workers is a losing strategy.

I’m still wrestling with the logic of Republicans twisting the Ford Myth debunk-athon into an argument against the minimum wage. But even if I don’t have it all worked out, there’s one argument that I know is correct: Having a minimum wage—and increasing the minimum wage to jibe with current economic realities—is the right thing to do.