Did Henry Ford Pay Efficiency Wages?

  title={Did Henry Ford Pay Efficiency Wages?},
  author={L. Summers},
  journal={Journal of Labor Economics},
  pages={S57 - S86}
  • L. Summers
  • Published 1987
  • Economics
  • Journal of Labor Economics
  • We examine Henry Ford's introduction of the five-dollar day in 1914 in an effort to evaluate the relevance of efficiency wage theories of wage and employment determination. We conclude that the Ford experience strongly supports the relevance of these theories. Ford's decision to increase wages dramatically is most plausibly the consequence of labor problems of the kind efficiency wage theorists stress. The structure of the five-dollar day program is consistent with the predictions of efficiency… CONTINUE READING
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