Where to find well-paid work
How Henry Ford created a system of insiders and outsiders
|Nov 26, 2020||1|
In 1914, Henry Ford doubled the wages of the workers at his Detroit car factory to five dollars a day.
As Tim Harford describes in The Undercover Economist Strikes Back, Ford didn’t do this to help recruit more employees. In fact, he wanted to spend less time hiring new workers.
Employment at the time was very flexible and there were plenty of factories around to find work, offering similar pay.
In 1913, the year before the big pay rise, the Ford factory had to recruit over 50,000 workers despite having a workforce of only 13,500. Most workers only stayed for three months. ‘Five-day men’ was their term for workers who stopped showing up for five days and were assumed to have resigned.
Not only that but, thanks to the advances in automation pioneered by Ford, work in a car plant was tedious. Unfulfilled, poorly paid and in demand, the workers had little incentive to do their jobs properly.
The five-dollar day certainly gave them that. Not only was this twice their previous salary, but it was twice the market rate for factory workers.
Pretty soon, the word got out. Every morning, thousands of men would stand outside the Ford factory gates looking for the best-paid job around. Knowing that dozens would jump at the chance to fill their steel-toe-capped shoes put even more pressure on employees to boost productivity and reliability. Now they had a lot to lose.
Of course, Ford’s legacy tells you how this worked out.
The vast majority of calls for freelancers I see have terrible pay and conditions.
The reason these companies need to keep advertising and encouraging freelancers to work with them is that no-one ever sticks with them for long. Just like the old car factories, they rely on a steady stream of people looking for a bit of extra cash, getting disillusioned, and either doing shoddy work or moving on. Places like Upwork and Fiverr are full of this.
The best places to work are companies like Ford. Ford didn’t need to advertise for workers – the ones he already had were happy to work hard and stay put.
All of my best anchor clients are the ones that didn’t advertise. I knocked on their (virtual) door and offered my services. They rarely need to recruit new freelancers because their existing ones are content with the pay and the work.
When I got in touch, either they just happened to need someone by chance or they did within the next couple of months and got back to me. You can never tell when might be the right time. It’s often just luck, but we can make our own luck by taking that first step.
In his book, Tim Harford half-jokingly describes Ford as the inventor of unemployment. Replacing a fluid market of workers and employers, Ford created a system of insiders and outsiders.
“There was no difference between the outsiders and the insiders in terms of their skills or character or willingness to work; the insiders had merely been lucky in managing to secure great jobs and were understandably keen to keep them.”
How to find well-paid work? Make your own luck and become an insider.
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