Wal-Mart and Henry Ford

Wal-Mart is known for the huge profits it has accumulated for the Walton family and its Wall Street backers. It is also known for low pay and savage opposition to workers’ rights.

In Dollars and Sense, John Miller reveals that “Wal-Mart’s ‘everyday low prices’ come at the expense of the compensation of Wal-Mart’s own employees and lower wages and fewer jobs for retail workers in the surrounding area.”

But he offers a puzzling comparison with the Ford Motor Company of the Model T era. “Henry Ford sought to pay his workers enough so they could buy the cars they produced. Sam Walton sought to pay his workers so little that they could afford to shop nowhere else.” This inaccurate depiction of Ford undermines the struggles of millions of workers to organize and win against Wal-Mart and similar employers.



Ford — the real history

Ford was famous for paying $5 a day — twice the usual manufacturing wage at the time. In the 1920s, thousands of immigrants from Europe camped out with U.S.-born white and Black workers at Ford’s plant gate in Dearborn. The workers inside knew they had to toe the line, because there were plenty outside waiting to be hired.

Ford outlawed talking, restricted bathroom breaks, denied pay for setup time, and sped up the production line. Turnover was high, with workers leaving injured, exhausted or fired. Ford employed a private army of thugs, recruited from jails and prisons, to spy on, intimidate and crush any efforts by his workers to organize.

Ford was reputed to be the richest man in the world. He cultivated an image as a kindly inventor who upheld old-fashioned values. But when the Depression struck in the 1930s, he cut wages and sped up production even more. When thousands of unemployed workers marched to his plant to ask for the relief Ford had promised, they were met with machine-gun fire from company police. Five workers were killed.



Basic economics

Employers pay workers less than the value of the products and services they produce — that is the ultimate source of corporate profits. Ford didn’t get rich selling cars to his own workers, who accounted for an insignificant part of the company’s sales.

Ford paid above-average wages while he had an effective monopoly in the low-cost car market, based on innovations in production technology. These innovations, combined with the ruthless intensity of labor, resulted in a per-car labor cost far below that of its competitors. The “high wages” were necessary to attract an endless supply of young, strong workers to replace those who were injured, worn out or fired.

This January, Wal-Mart attracted 25,000 applicants for 350 jobs in a Chicago suburb. Like Ford in the 1920s, its working conditions, speedup, and hours of work make for rapid turnover, giving Wal-Mart a vested interest in maintaining a large pool of workers desperate for jobs. Indeed, Henry Ford and Sam Walton, and the companies they founded, are more striking for their similarity than for any differences.



Organizing Ford, organizing Wal-Mart

After years of organizing and struggle, workers at Ford won their first union contracts in 1941. During the same period, millions of other workers — including those in low-wage, casual jobs like sailors and longshoremen — won big pay increases, decent working conditions and job security. The owners made the best of the situation, using increased workforce stability and satisfaction to raise productivity and improve public relations.

The union victories in the 1930s and 1940s were made possible by grassroots organizing by the workers themselves. They were backed up by their working-class communities, the newly revitalized labor movement, and relatively pro-labor laws and elected officials. These same ingredients will ultimately make it possible for Wal-Mart workers, as well as workers throughout the low-wage service sector, to win a voice on the job, and to achieve the slogan, “Make every job a good job.” Big corporations will be “reasonable” to the extent that the power of the workers compels them.

Instead of choosing Henry Ford as an example that things can be better for Wal-Mart workers, it would be better to check out the biographies of Bill McKie, Wyndham Mortimer and Walter Reuther, workers who emerged from the auto assembly lines to lead the workers’ successful union organizing in auto.