Lessons Learned from Henry Ford
Barbara Ehrenreich’s discussion of the Wal-Mart economy in today’s issue of The Nation reiterates the concept that Wal-Mart’s business model is inherently unsustainable. After reporting poor Q2 sales last week, Wal-Mart CEO Lee Scott pointed to the fact that the company’s customers are poor (as Ehrenreich explains) as a reason why the company is struggling. However Wal-Mart itself is contributing to nation-wide poverty by outsourcing jobs, lowering the median wage and, as this article discusses, contirbuting to the vicious cycle of borrowing and spending that keeps people in poverty.

The American poor, who are usually tactful enough to remain invisible to the multi-millionaire class, suddenly leaped onto the scene and started smashing the global financial system...[I]n a diabolically clever move, the poor--a category which now roughly coincides with the working class--stopped shopping. Both Wal-Mart and Home Depot announced disappointing second quarter performances, plunging the market into another Arctic-style meltdown. H. Lee Scott, CEO of the low-wage Wal-Mart empire, admitted with admirable sensitivity, that “it’s no secret that many customers are running out of money at the end of the month.”
I wish I could report that the current attack on capitalism represents a deliberate strategy on the part of the poor, that there have been secret meetings in break rooms and parking lots around the country, where cell leaders issued instructions like, “You, Vinny--don’t make any mortgage payment this month. And Caroline, forget that back-to-school shopping, OK?” But all the evidence suggests that the current crisis is something the high-rollers brought down on themselves.
When, for example, the largest private employer in America, which is Wal-Mart, starts experiencing a shortage of customers, it needs to take a long, hard look in the mirror. About a century ago, Henry Ford realized that his company would only prosper if his own workers earned enough to buy Fords. Wal-Mart, on the other hand, never seemed to figure out that its cruelly low wages would eventually curtail its own growth, even at the company’s famously discounted prices.
The sad truth is that people earning Wal-Mart-level wages tend to favor the fashions available at the Salvation Army. Nor do they have much use for Wal-Mart’s other departments, such as Electronics, Lawn and Garden, and Pharmacy.
It gets worse though. While with one hand the high-rollers, H. Lee Scott among them, squeezed the American worker’s wages, the other hand was reaching out with the tempting offer of credit. In fact, easy credit became the American substitute for decent wages. Once you worked for your money, but now you were supposed to pay for it. Once you could count on earning enough to save for a home. Now you’ll never earn that much, but, as the lenders were saying--heh, heh--do we have a mortgage for you!
Posted by Alex Goldschmidt on Tuesday, August 21, 2007
Click Here for a Printer-Friendly Version







COMMENTS
for those who know the price of everything and the value of nothing,thers nothing much of value that remains,certainly not the quality of life(or the chance and hope for it) that had been the standard of life here in the usa for the past 50 years or so ....wait till the nafta superhighway is completed from mexico to canada!!!!!!
ddrb in
Tuesday, August 21 at 11:47 AM
Don’t blame Canada. We are losing our manufacturing at an alarming rate. If it stays in North American (probably most is going to China), then it is going down south on the NAFTA highway into Mexico.
R E M E M B E R
J O N Q U I E R E
Q U E B E C
Home of Walmart Worker Abuse
R E M E M B E R
J A C K S O N V I L L E
T E X A S
Home of Walmart Worker Abuse
Alex in Ontario, Canada
Tuesday, August 21 at 12:26 PM
“The righteous considereth the cause of the poor: but the wicked regardeth not to know it.”
Proverbs 29:7
“The propagandist’s purpose is to make one set of people forget that certain other sets of people are human.” Aldous Huxley, The Olive Tree (1937)
“As I would not be a slave, so I would not be a master. This expresses my idea of democracy.”
Abraham Lincoln
A nice piece. However there are some lessons and facts that arrogance and the love of money crowd will never perceive and never accept. That is the way with psychopaths.
SanDiegoView in
Tuesday, August 21 at 04:34 PM
“For example, in the chapter sarcastically entitled “Working Man’s Friend,” Baldwin provides some very telling information about the famous Ford decision of January 5, 1914 to reduce the workday to eight hours and pay $5 a day to his employees. Ford had been criticized by the Wall Street Journal for injecting “Biblical or spiritual principles into a field in which they do not belong” and the newspaper suspected that a moralistic plan afoot.
There was an element of truth in this. Ford simultaneously launched his infamous Sociological Department to “put a soul into the company.” The auto baron called upon an Episcopal dean to join him. “I want you, Mark, to put Jesus Christ in my factory,” he said. The man was chosen to oversee all personnel issues.[14]
It turned out that Jesus’ alter ego needed not a dozen disciples, but a small army to get the job done for Ford. The Sociological Department began with a staff of more than 50 investigators, but grew to 160 within two years. Its “apostles” would drive the crowded back streets of Detroit and Dearborn with a sheaf of printed questionnaires.
Their job was to establish standards of behavior throughout the company. To qualify for the $5-a-day wage, the employee had to put up with an exhaustive domestic inspection, show that he was sober, clean of person, saving money through regular deposits, and not living “riotously.”[15]
This was a very conscious social experiment. Jesus saved men, Ford hoped, from gambling and drinking—habits that made them late for work or unproductive. But above all, Christianity was an ideological vaccine against Jewish Bolshevism, socialism and trade unionism. The fascistic and all-powerful Sociological Department constituted a major effort on Ford’s behalf to control the hearts, minds and bodies of his workers.
This was a period of rising militancy and growing organization of the working class. The Industrial Workers of the World (IWW) and the Socialist Party both were major forces within American society. One of the responses of the US government to the energized labor and socialist movements was the Espionage and Sedition Acts, laws broadly used to persecute the IWW, the Socialist Party and many dissenting workers. To implement this repression, the government established the American Protective League (APL) as a semiofficial auxiliary of the Justice Department.[16]
The Ford apparatus changed with the times. The book, The Five Dollar Day, by Steven Meyer, provides graphic details of the extraordinary collaboration between Ford and the APL, an organization which grew to 1,200 units with approximately 250,000 members—a vast network of spies and informants.
The APL’s most active division was in Detroit, where operatives were stationed in each important factory of the city. At the Highland Park Ford Plant, the Sociological Department coordinated and centralized the Ford network of about 100 APL spies. Ford managers supervised the APL agents in the shops and handed over to the APL the company’s gargantuan “Records of Investigation” that had been maintained since the inauguration of the $5-a-day wage. Within a year of the Russian Revolution, more than 30,000 investigations had been conducted in Detroit, with information passed on to the Department of Justice, military intelligence and local law enforcement.
Any remark considered “disloyal” by an APL agent would result in a worker being written up. Ford supervisors and APL operatives constantly applied pressure on employees to conform in myriad ways. For example, individuals would be required to purchase Liberty Bonds and donate to the YMCA and the Red Cross. Those workers who did not comply were labeled “undesirable aliens” and/or “traitors.” This could lead to termination or legal prosecution. Such was the level of intimidation pervading the shops of Ford Motor Company. The most intense scrutiny was directed at suspected members of the IWW or those professing to believe in socialism.”
Nick in
Tuesday, August 21 at 05:18 PM
An Addendum to Nick’s Long Rant
I didn’t learn anything new after breezing through Nick’s long rant. It just confirmed what I’ve known for a long time--Nick is a hate monger.
If you want to hold on to whatever shreds of “credibility” you have left Nick, I would suggest you not try to comment on “spirtitual” matters, or bring up Bible quotes, or refer to the 10 commandments. You’re a hypocrite!
I think the anti-Christianity crowd has gone completely insane and I am Agnostic! Again, I am somewhere between Agnostic and Atheist.
Nick Yelanich in Monongahela, PA
Thursday, December 01, 2005 at 01:46 PM
But, I’ll let others come to their own conclusion by reading through some of your more recent rants:
“I do not advocate violence but…”
“I don’t particularly like lawbreakers. I despise criminal invaders.”
”Those who refuse could be shot.”
“...if you cannot agree on a violent solution...”
“...quickly tried and shot.”
”Friends of mine feel very strongly about our nation.”
“...if we are all dead?”
”These friends are fanatical in their devotion to all things patriotic and military.”
”I know many Americans who would kick the crap out of you or possibly shoot you if they ever saw you disgrace our flag. I know of people who would beat you to a pulp…”
“My views are “isolated”? My views were shared by Barry Goldwater...” ~Nick
“Extremism in the defense of liberty is no vice.” ~Barry Goldwater
ScrewedbyWal-Mart in Anytown, America
Tuesday, August 21 at 05:41 PM
An Addendum to Nick’s Long Rant
I didn’t learn anything new after breezing through Nick’s long rant.
Also of note ScrewedbyWalmart
The whole article Nick presented is from the World Socialist Web Site. He is not the original writer.
Nice work Nick!!!
Here is the beginning of it:
Henry Ford: American anti-Semitism and the class struggle
By Nancy Russell
18 April 2003
Use this version to print | Send this link by email | Email the author
Henry Ford and the Jews: the Mass Production of Hate by Neil Baldwin, Public Affairs. New York. 2001, paperback release December 17, 2002
R E M E M B E R
J O N Q U I E R E
Q U E B E C
Home of Walmart Worker Abuse
R E M E M B E R
J A C K S O N V I L L E
T E X A S
Home of Walmart Worker Abuse
Alex in Ontario, Canada
Tuesday, August 21 at 07:53 PM
Screwed and Alex need to get a life...and a room!
Me in
Tuesday, August 21 at 09:47 PM
Me
Don’t be upset that Nick gets caught so often.
R E M E M B E R
J O N Q U I E R E
Q U E B E C
Home of Walmart Worker Abuse
R E M E M B E R
J A C K S O N V I L L E
T E X A S
Home of Walmart Worker Abuse
Alex in Ontario, Canada
Tuesday, August 21 at 10:13 PM
I will only say that Ford needs to clean up its act and stop promoting the homosexual agenda. Their support of this very minority group is hurting their sales and have hurt for the past year or so. They are being boycotted by the Christian People such as myself.
Wal-Mart started to do the same thing and the boycott was in place, but then WM retracted (to an extent) and they were not boycotted. It stlll could happen.
Why cater to less than l% of the population and tick off about
80% who are Christians? Not good business logic.
Since I seldom post, I will just wish all a blessed day in the Love of the Lord Jesus Christ!!
The Sage in
Wednesday, August 22 at 01:41 AM
In fact, easy credit became the American substitute for decent wages.
Don’t you just love Barbara Ehrenreich? We in the Anti Wal-Mart Movement refer to her as Saint Barbara. :o)
If you are a fan I recommend her writing on Alternet.com., particularly this one:
Minimum Wage Rises, Sky Does Not Fall
Ken V in Texas
Wednesday, August 22 at 05:53 AM
Ken
If you want to complain about easy credit, why do you blame Wal-Mart? Does Wal-Mart make people poor? Wal-Mart sells cheap products that enable lower income shoppers to stretch their dollars. Wal-Mart makes poor people richer.
Barbara Ehrenrich is a hater of capitalism. She has consumed the Marxist Kool-Aid and she believes that capitalism is to blame for everything. In fact, Barbara, capitalism is the finest economic system in the history of the world. Income inequality is necessary. A society of equal incomes would give us the same results as a public school with no good or bad grades. Spoiled, stupid, arrogant failures who hate the world.
Ken, the minimum wage went up slightly and we have not had enough time to witness the effects of the minimum wage hike. We will pay for it sooner or later.
You seem to be a Democrat. Democrats whine about the costs of education, housing and healthcare. Yet, Democrats NEED to keep people poor in order to have a constituency that will continue to vote for them. You can’t play the class warfare card if the people are earning lots of money. Democrats keep people poor. They do this by:
1. Supporting higher taxes. Americans spend $500 + billion per year on tax compliance.
2. Demanding high taxes on gas and limiting production and refining, which limits supply and drives up prices.
3. Supporting government management of health care, though Medicare and Medicaid are broke and we will need at least $18 trillion to prop up the system. Americans spend $600 billion per year on health care paperwork!
4. Supporting government financial aid for college, which does nothing to encourage colleges to manage their costs and, instead, drives up the price of an education.
5. Supporting building restrictions to their personal benefit, demanding that all people be given credit (even when they can’t afford it) and allowing $80 billion per year in mortgage deductions, in additon to subsidized mortgages and housing. Subsidies drive up the price of everything, including housing.
In short, you support the Democrats who continue to advocate laws, regulations and subsidies that keep poor people poor. As I stated above, Social Democrat strategy depends on poor people staying poor. If poor people realize that they can improve their lot through education, hard work and thrift, support for welfare, expensive subsidies and tax increases would dry up.
Social Democrat political goals: keep poor people poor and lose the war in Iraq. As a top Democrat recently said, a positive report on the war from General Petraus would be a “disaster” for the Social Democrats.
Traitors.
Nick in
Wednesday, August 22 at 06:35 PM
...why do you blame Wal-Mart?
Where do you see that?
You might read the referenced articles before commenting, Nick. Barbara actually wrote this piece before the hike in the federal minimum wage.
A visit to Washington state, which has the highest minimum wage in the country, reveals a booming economy with none of the problems Big Business had been warning about.
Ken V in Texas
Wednesday, August 22 at 09:41 PM
Good To See You’re Getting Some Insight Into Yourself Nick
“Spoiled, stupid, arrogant failures who hate the world.”
Yeah...right on, Nick! That’s pretty much the way I’ve got you pegged. You do come across as “spoiled.” You’re not as “smart” as you’d like us all to believe you are. And as far as being “arrogant” and “hating the world,” your blog comments have established this.
Since you failed to get into law school yourself, you’ve obviously developed an obsessive and fanatical dislike for trial lawyers.
“Does Wal-Mart make people poor? Wal-Mart sells cheap products that enable lower income shoppers to stretch their dollars.”
Spoken like a true Wal-Mart soldier Nick. Did you lift this lie right off Wal-Mart’s website?
“Democrats NEED to keep people poor in order to have a constituency that will continue to vote for them.”
How about the Wal-Mart corollary to your little theorem? After the passing of Sam Walton, it didn’t take the bean counters in Bentonville long to realize there was no future in programs like “Bring it Home to the U.S.A.” Saving jobs in America would not guarantee future customers for Wal-Mart.
Sam Walton said, “Every job we save creates another potential Wal-Mart customer who’s not worrying about where his or her next dollar’s coming from.”
But this is exactly the point. Wal-Mart isn’t interested in saving jobs. It’s Wal-Mart that’s set the pace in the “Race to the Bottom.” It’s Wal-Mart that wants to keep people poor and “worrying about where his or her next dollar’s coming from.” It’s the working poor who are Wal-Mart’s “constituency” or customer base.
It’s very hypocritical for you to call Barbara Ehrenrich a “hater.” By your own admission, your “hate list” is getting longer every day.
ScrewedbyWal-Mart in Anytown, America
Wednesday, August 22 at 11:55 PM
I know why Wal-Mart makes America poor,they sell such bad merchandise that you have to keep buying it over and over again
wallstreet in
Thursday, August 23 at 09:21 AM
Screwedby,
“But this is exactly the point. Wal-Mart isn’t interested in saving jobs. It’s Wal-Mart that’s set the pace in the “Race to the Bottom.” It’s Wal-Mart that wants to keep people poor and “worrying about where his or her next dollar’s coming from.” It’s the working poor who are Wal-Mart’s “constituency” or customer base.”
If this were true, the Democrats would LOVE Wal-Mart!! Gee, I seem to remember Hillary Clinton being on the Wal-Mart Board, maybe they do!! Ever notice how the Democrats are for raising the national minimum wage, but never more than Wal-Mart’s starting wage? Strange!!
RDS in
Thursday, August 23 at 09:42 AM
You seem to be a Democrat.
That’s a Yellow Dog Democrat* to you Right-Wingnuts!
*I’d vote for a yellow dog before I’d vote Republican.
“In this world of sin and sorrow there is always something to be thankful for; as for me, I rejoice that I am not a Republican.” ~ H.L. Mencken
Ken V in Texas
Thursday, August 23 at 02:23 PM
“for those who know the price of everything and the value of nothing,thers nothing much of value that remains,certainly not the quality of life(or the chance and hope for it) that had been the standard of life here in the usa for the past 50 years or so”
Oh, you are so clever, paraphrasing Oscar Wilde - keep it coming. Now throw in some Mark Twain and I’ll really respect you. 50 years ago people in this country had NOTHING and no one bitched about it. Now it’s whine, whine, whine if you can only afford 2 TV’s for your house in the suburbs.
“Wal-Mart isn’t interested in saving jobs. It’s Wal-Mart that’s set the pace in the “Race to the Bottom.” It’s Wal-Mart that wants to keep people poor and “worrying about where his or her next dollar’s coming from.” It’s the working poor who are Wal-Mart’s “constituency” or customer base”
Of course Walmart isn’t interested in saving jobs - why should it be?? Can you name me another company that DOES care about saving jobs, outside of pure self-interest?? They don’t exist, so stop deluding yourself that they’re supposed to care. Why does every freakin’ business have to have a conscience nowadays??? Offer them something of value, and they’ll pay you for it - that’s how the system works. They’re not supposed to give you a hug when you’re feeling sad - god, you people are ridiculous!!!!!
fjfj in
Thursday, August 23 at 03:05 PM
Why does every freakin’ business have to have a conscience nowadays???
Funny stuff, fjfj! I also appreciated the small ‘g’.:o)
Ken V in Texas
Thursday, August 23 at 07:53 PM
fifi,
“50 years ago people in this country had NOTHING and no one bitched about it. Now it’s whine, whine, whine if you can only afford 2 TV’s for your house in the suburbs.”
Can you even imagine what these people would do, if they ever had to go through a depression or serious recession? The average American, has little savings, high credit account balances and use their mortgage equity to pay for boats, big screen TV’s, etc. and then cry, when it hit’s the fan, for the government to bail them out!!
RDS in
Thursday, August 23 at 10:39 PM
“Funny stuff, fjfj!”
“Of course Walmart isn’t interested in saving jobs - why should it be??” ~fjfj
“ “Every job we save creates another potential Wal-Mart customer who’s not worrying about where his or her next dollar’s coming from.” ~Sam Walton
ScrewedbyWal-Mart in Anytown, America
Thursday, August 23 at 10:52 PM
Comment Policy
WalmartWatch.com reserves the right, in its sole discretion, to remove or refuse to post blog comments.