It Is Well Known That Henry Ford's Payment of His

question 61

Essay

It is well known that Henry Ford's payment of his workers of five dollars a day was higher than his competitor for a short while. Why did Ford do this and what were the advantages to him of doing so? What wage theory does this appear to be in accord with?

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Definitions:

Depreciation

The method by which a company allocates an asset's cost over its useful life, reflecting the consumption of the asset's economic benefits.

Disposable Income

The reserve of funds households possess for spending and saving after income tax payments.

Savings

The portion of disposable income not spent on consumption of goods and services, set aside for future use.

Disposable Income

Net financial resources for households to allocate towards spending and savings after income taxation.