Happy Labor Day, suckers.

[sufrommich]

IN the rancorous debate over how to get the sluggish economy moving, we have forgotten the wisdom of Henry Ford. In 1914, not long after the Ford Motor Company came out with the Model T, Ford made the startling announcement that he would pay his workers the unheard-of wage of $5 a day.

Not only was it a matter of social justice, Ford wrote, but paying high wages was also smart business. When wages are low, uncertainty dogs the marketplace and growth is weak. But when pay is high and steady, Ford asserted, business is more secure because workers earn enough to become good customers. They can afford to buy Model Ts.

This is not to suggest that Ford single-handedly created the American middle class. But he was one of the first business leaders to articulate what economists call “the virtuous circle of growth”: well-paid workers generating consumer demand that in turn promotes business expansion and hiring. Other executives bought his logic, and just as important, strong unions fought for rising pay and good benefits in contracts like the 1950 “Treaty of Detroit” between General Motors and the United Auto Workers.

Riding the dynamics of the virtuous circle, America enjoyed its best period of sustained growth in the decades after World War II, from 1945 to 1973, even though income tax rates were far higher than today. It created not only unprecedented middle-class prosperity but also far greater economic equality than today

http://www.nytimes.com/2012/09/03/opinion/henry-ford-when-capitalists-cared.html?smid=tw-share

[HughBeaumont]

1. I mean, a Nazi-sympathizing, virulently anti-Semetic Union-hater got it.

Why can't the rest of CorpMerica get it?

[sufrommich]

2. Because they are the rich and America is paying off

well for them. This is what makes America exceptionally exceptional to them. Unfortunately, they get the rubes to play along not realizing that their standard of living is now being eclipsed by most of the rest of the western nations.

[brewens]

3. I watched Auggie Busch III I think it was, address a Budweiser convention

in the late 80's. My bosses went to St. Louis for it. The rest of the crew traveled to a mini-convention in our state and saw the video. I think even then Auggie II was an old man. It had to ave been his son.

He had a hall full of distributor owners and told them they had better be careful what they wished for. He knew they were all about killing unions and making more money for themselves. He also realized they made money selling premium beer to working people that were paid good wages. This was before the brewery race to the bottom pushing cheap and high alcohol beers.

Back in the mid 80's my distributor was one of five in our 50,000 population town. There were two big ones, us selling Bud and Miller products and the Coors distributor. Three others sold cheaper beers and wine. The two big guns were pretty snobbish about making big money selling the good stuff, while the little guys fought among themselves for the scraps. It didn't last long though.

As wages effectively declined the big brewers expanded their market shares by distributing lower quality cheaper beers. For Miller it was Milwaukee's Best, Bud went nationwide with it's Busch line and Coors came out with Keystone. Us guys in the business hated it! We were working harder pushing that crap and making less profit per case.

Then the masterminds came out with "Ice" beers. Those were mostly higher alcohol beers. So it got even stupider and worse. Cheap Ice beers quickly followed. Previously in my state the higher alcohol beers were only sold in liquor stores but they changed the law to allow them everywhere. So now a guy that had a drinking problem could get even drunker cheaper.

Make no mistake about it, if you are in the beer business, your job is supplying alcohol junkies with their shit. Sure, many people these days drink more responsibly but the stats are something like 30% of the beer drinkers, drink 80% of the beer. You rely on the guy that gets good and drunk several times a week to earn your living, otherwise there would be no distributors all over.

It got to that point and the two big distributors put the little guys out of business and had it all. That didn't last long though. It wasn't all that long before even those two got squeezed into having to sell to bigger corporations. In both cases the owners had pinched pennies to pad their retirements and bailed out. They didn't leave the businesses in real great shape and their profits had been declining steadily anyway. The big bosses boy took over in one case and didn't cut it, new owners in the other case fired and cut everywhere to cook the books and sell for a quick profit.

Now both are still operating at their former locations but there are nowhere near as many good jobs there. I left before the big boss at the Bud distributor retired. They were forcing us guys on salary to work longer and longer weeks. I could see it wasn't going to work out. I knew I would need to move up to management or a strictly sales job to stand any chance of making it to retirement. It just wasn't going to happen. A couple relatives and guys with seniority were ahead of me. What happened to those places is a good example of a race to the bottom that really didn't have to happen.