Ford laborers were given a significant increase in pay on January 5, 1914. Ford Motor Company announced a $5 a day minimum wage for an eight-hour shift, which started a seismic shift for labor across the industry.
In early 1914, Henry Ford and company leaders were troubled by high rates of absenteeism and turnover at the Highland Park plant. Daily absenteeism ran at 10% of the workforce and the turnover of 380% required the company to constantly replenish its workforce with new hires.
By sunrise the morning following the announcement, there were some 10,000 men milling around in the below freezing weather with swirling snow outside Highland Park. They came to fill the openings of the additional shift. On Saturday, January 10, signs announced that hiring had ceased.
A. S. Blakely reported in the January 11 Indianapolis Star “the recent announcement of the Ford Motor Company that it would distribute $10,000,000 profits among its employees in semi-monthly dividends and make a minimum wage scale of $5 a day, has been given the subject of general interest in Indianapolis during the past week. Not only members of the (auto industry) fraternity have been discussing the great gift, but business men in general have commented favorably on the action of the Detroit concern. The announcement goes even further and says that the company will employ 4,000 more men by working in three eight-hour shifts and operating the plant continuously. In a recent interview, Henry Ford, president of the great institution, made the following statement concerning the announcement. “We have estimated the earnings of our company and will divide it as we go along, or, in other words, as we earn it. It will be in the pay envelopes semi-monthly. Our belief is that the division of earnings between capital and labor is not fair and that labor is entitled to a greater share. We desire to express our belief in some practical way and therefore have adopted this plan.””
The new $5 Day for an eight-hour shift was achieved by replacing the two existing nine-hour shifts with a nonstop rotation of eight-hour shifts around the clock. Ford Motor Company got more production, and the workers put in fewer hours. This was a win-win for everyone.
The $5 Day changed the absenteeism and turnover. The Highland Park daily absenteeism dropped to under 1%, and replacement hiring dropped from 53,000 in 1913 to just 2,000 by 1915.
These favorable production conditions encouraged Ford to build a number of branch assembly plants across the country. Construction of the Ford branch assembly plant (known as Plant 215) in Indianapolis at East Washington Street and Oriental began later in fall 1914. The Indianapolis plant commenced production in spring 1915. By the mid-1920’s, this plant assembled 300 cars per day.
Henry Ford’s announcement of a $5 a day minimum wage impacted laborers across the country including Indianapolis. This gesture certainly impacted the dream of car ownership for the common-man.
For more information on our automotive heritage follow this link.