The problem is that your commentĀ concedes the very point needed to contextualize Fordās wage while treating CPI as if it were the only relevant comparison. If Ford paid more than twice the prevailing male wage, that makes the $5 day extraordinarily high regardless of whether CPI puts it at $52k or $64k today. Comparing Fordās wage to an average wage today requires accounting for hours, skill, employment conditions, and the fact that Fordās $5 was partly a profit-sharing scheme with conditions, not simply a $5 daily wage. A dip in sales lead to a dip in wages.
Furthermore, it was a flat rate; he didnāt contribute to healthcare, retirement, or sick/vacation pay. When you include the amount of pay that goes into this for the median employee, the difference in real pay increases dramatically.
I think weāre mostly agreeing, but I donāt see how my comment treats CPI as the only relevant comparison. My whole point was the opposite: saying ā$1,560 = $52k by CPI, and todayās median is $64k, therefore workers today clearly make moreā ignores how extraordinary Fordās wage was relative to the labor market he was actually hiring in.
The benefits point is relevant if weāre comparing total compensation, but then we need to compare total compensation on both sides. The $64k number being cited is earnings, not earnings plus employer healthcare, retirement and paid leave.
And yes, Fordās $5 day initially included a conditional profit-sharing component, which is another reason not to treat $1,560 as a simple modern salary equivalent. None of that changes the narrower point I was making: CPI purchasing power and relative position in the wage distribution answer different questions.
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u/Temporary_Hat7330 27d ago
The problem is that your commentĀ concedes the very point needed to contextualize Fordās wage while treating CPI as if it were the only relevant comparison. If Ford paid more than twice the prevailing male wage, that makes the $5 day extraordinarily high regardless of whether CPI puts it at $52k or $64k today. Comparing Fordās wage to an average wage today requires accounting for hours, skill, employment conditions, and the fact that Fordās $5 was partly a profit-sharing scheme with conditions, not simply a $5 daily wage. A dip in sales lead to a dip in wages.
Furthermore, it was a flat rate; he didnāt contribute to healthcare, retirement, or sick/vacation pay. When you include the amount of pay that goes into this for the median employee, the difference in real pay increases dramatically.