Monday, March 5, 2012

1920s, Fords & the American Consumer

I was interested to read that in 1914 Ford implemented a new pay for his factory workers: $5 a day. At the time that was unheard of. This was unskilled labor, and about three times the going rate for an unskilled factory worker. But Ford wanted his workers to be able to afford the cars they were helping to build.

In 1914 the entry level Ford car went for about $550 for a Touring. That meant about 110 days of the unskilled factory worker's pay would cover a Ford vehicle (of course they had installment plans just like we do). Today Ford's new employees make about $14 an hour. That'd be about 147 days to buy a new Ford Focus. Then again, I don't suppose workers in 1914 had too much in the way of used car options.

By the end of the 1920s 1 out of every 5 Americans owned a car. Now we average more than 2 cars per household. Of course the 1920s also experienced unemployment under 5% for the most of the decade. The 1920s also saw the introduction of many new debt and credit plans for the American consumer who began financing things that would previously have been unheard of.

(Photo via wwarby)

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