I can't believe this actually needs to be said, but a single employer raising its wages is not the same thing as a government raising a legally mandated minimum wage. It's so much not the same thing, that the very fact the article tries to conflate them by comparing Ford's decision with the proposal from the Obama administration makes me doubt the voracity of the entire piece.
For one thing, Ford's logic is quite sound precisely because he's the only one raising wages. If his aim is to remain competitive and retain workers, that only works if he's the only one doing it -- competition, by definition, is relative.
Furthermore, the idea that people become richer because the number on the bottom of their check goes up, rather than the buying power of that number, is easily debunked by looking at the entire history of inflation. I'm easily making more money, in nominal dollars, than an average CEO in 1919, but I'm not running wild in Saint-Tropez every summer either.
The one thing the article does get right is Ford's attempt to fight the stock market crash in 1929 by raising wages further backfiring. The reason is because his higher wages were not the actual reason why Detroit was richer -- the opposite was true: he was able to pay higher wages because Detroit was richer; or, more precisely, because he made the best cars in the world and capital flowed into his company and his city at high rates. But when the economy contracted, Detroit was going to feel the pinch, also.
Nothing in this article makes a case for raising a federally mandated minimum wage, and actually undermines the argument quite a bit.
For one thing, Ford's logic is quite sound precisely because he's the only one raising wages. If his aim is to remain competitive and retain workers, that only works if he's the only one doing it -- competition, by definition, is relative.
Furthermore, the idea that people become richer because the number on the bottom of their check goes up, rather than the buying power of that number, is easily debunked by looking at the entire history of inflation. I'm easily making more money, in nominal dollars, than an average CEO in 1919, but I'm not running wild in Saint-Tropez every summer either.
The one thing the article does get right is Ford's attempt to fight the stock market crash in 1929 by raising wages further backfiring. The reason is because his higher wages were not the actual reason why Detroit was richer -- the opposite was true: he was able to pay higher wages because Detroit was richer; or, more precisely, because he made the best cars in the world and capital flowed into his company and his city at high rates. But when the economy contracted, Detroit was going to feel the pinch, also.
Nothing in this article makes a case for raising a federally mandated minimum wage, and actually undermines the argument quite a bit.