Levinson for Northeast Pennsylvania 2022
Manufacturing isn't Everything; It's the Only Thing
The $15 an Hour Minimum Wage
Labor Relations and Unions

This web site's purpose is to explore the viability of running for the 8th Congressional District in Northeast Pennsylvania in the November 2022 election. No campaign donations are currently being solicited or accepted.

Manufacturing isn't Everything; It's the Only Thing

The loss or absence of manufacturing capability has always been a leading indicator of national decline. There have been no historical exceptions.

  • Alfred Thayer Mahan's The Influence of Sea Power Upon History described how the discovery of gold and silver in the New World ruined Spain and Portugal. The gold enabled them to buy manufactured goods from their rivals England and Holland, with the result that the latter countries ended up with most of the factories along with the gold. England then bought the vineyards of Oporto in Portugal, where the Britons' beloved "Port Wine" is produced, with Portugal's own gold.
    • Mainland China is similarly buying up property in the United States in the same manner. This is an extremely dangerous trend.
  • Adam Zamoyski's The Polish Way describes how an economist noticed during the 16th century, before the Polish-Lithuanian Commonwealth reached the apparent height of its power (to the extent that King Jan Sobieski III defeated a much larger Ottoman army at Vienna on September 12 1683) that Poland exported primarily raw materials, and manufactured very little.
  • The United Kingdom forced its colonies to accept manufactured goods, often of poor quality, in exchange for raw materials. This was a direct cause of the War of Independence.
  • The South exported raw materials (such as cotton) to the United Kingdom's textile mills in exchange for manufactured goods. Northern manufacturers agitated for protectionist tarriffs, which threatened to ruin the South's economy. This was among the principal causes of the American Civil War.
    • The Industrial Revolution made it possible for England to abolish slavery (they borrowed money to emancipate the slaves through something similar to eminent domain) and also made it uneconomical in the North. Intelligent people would have similarly sought to industrialize the South (while using eminent domain to emancipate the slaves) noting that Aristotle predicted accurately more than 2000 years ago that automation would make slavery and also low-wage labor uneconomcial. Remember that the ancient Greeks wrote what we would now call science fiction stories about mechanical men, they proved that steam could be made to perform useful work, and they were able to predict accurately the socioeconomic effects of such devices.
  • Harrington Emerson's The Twelve Principles of Efficiency warned similarly in 1911 that the United States was exporting raw materials and agricultural products, while European nations like Switzerland were adding value to raw materials through manufacturing.
  • American manufacturing capability, as developed by the Ford Motor Company, crushed the Axis during the Second World War with an inexhaustable supply of material.Matters reached the point where the United States outproduced all of the war's belligerants, including the Allies as well as the Axis, put together.
    • One reference said that, although German and Japanese workers were highly skilled, one American was as productive as three Germans or nine Japanese.
The decline of American manufacturing capability, and the offshoring of manufacturing to Mainland China, is therefore incredibly dangerous to our nation's future and security.

The $15 an Hour Minimum Wage; What Would Henry Ford Do?

Ford would almost certainly figure out how to pay $25 or more an hour while reducing prices and increasing profits in the bargain. This is not speculation; he figured out how to pay $5 a day, and later $6 and $8 a day, when the dollars were made of silver and a dime would buy a large loaf of bread. There was a time when one blue collar worker could support an entire family, and own a home and automobile, on a single income, and nothing says we cannot use Ford's proven principles to achieve similar prosperity today. Here is Ford's $5 a day minimum wage in perspective; the ad is from 1920.

Ford's system is much more familiar today as the Toyota production system because the three people who knew how Ford's system really worked--Henry and Edsel Ford, and Ford's production chief Charles Sorensen--were incapacitated, died, and retired respectuvely during the early 1940s. The United States forgot Ford's principles for roughly 60 years; I rediscovered them after I read Stuelpnagel, T. R. 1993. "Déjà Vu: TQM Returns to Detroit and Elsewhere." (Quality Progress (September), 91-95). "One Japanese executive referred repeatedly to 'the book.' When Ford executives asked about the book, he responded: 'It's Henry Ford's book of course—your company's book.'" That got my interest immediately. Then I discovered the Advanced Book Exchange in about 2000 and ordered Ford's My Life and Work. The first few pages were a terrific revelation, and the rest proved that the Toyota production system did in fact originate at the Ford Motor Company during the first quarter of the 20th century. I subsequently purchased and read Ford's other books (Today and Tomorrow, and Moving Forward) as well as books about Ford; one spoke of hundred-fold productivity improvements circa 1915. Ford left the United States an inheritance worth tens of trillions of dollars in terms of knowledge, and it is ours to claim whenever we want.

This leads us to what I believe should be the principal issue in the 2022 election: how do we connect Northeast PA's workers with high-wage jobs?

I believe reasonably, based on what I have seen of numerous 21st century jobs (including jobs in which subminimum-wage farm workers bend over to pick crops) and also the actual achievement of Ford and his contemporaries, that modern jobs should start at upward of $20 an hour. This is not however something that politicians can legislate, but rather something that science and engineering achieved in the past and can easily achieve again. If the government mandates that jobs must pay $15 an hour, the same way Shakespeare's Jack Cade declared that seven half-penny loaves of bread would sell for a penny, one of two things will happen:

  1. The jobs will be eliminated or not created in the first place.
  2. The jobs will be shipped offshore to China and similar venues.

Henry Ford, however, told us in one sentence everything that anybody needs to know about industrial and labor relations (My Life and Work, 1922): "It ought to be the employer's ambition, as leader, to pay better wages than any similar line of business, and it ought to be the workman's ambition to make this possible." The principle that changed the entire world some time around 1908, the day the first Model T rolled off Ford's moving assembly line, is that most jobs contain enormous amounts of built-in waste, and removal of this waste allows higher wages, higher profits, and lower prices simultaneously. Frank Gilbreth proved that brick laying, as practiced for thousands of years, wasted 64% of the mason's labor by forcing him to bend over to pick up each brick instead of having the bricks delivered at waist level--and, as I said above, there are photos and videos today of poorly-paid migrant workers bending over to pick the same fruits and vegetables that sell for inflated prices while the farm owners get mediocre profits in the bargain.

Harrington Emerson described in 1911 how the Suez Canal was dug by women who used their hands to excavate the soil and carry it away in baskets. It came as no surprise that the workers were given only subsistence (they were effectively forced labor, the French corvee or corresponding Central European robota, from which the word "robot" came) while the canal cost $80 million rather than the budgeted $30 million. Everybody pays for bad job design; workers get low wages, customers pay high prices, and investors realize mediocre, if any, profits. The next time you see somebody using a mop instead of a machine to clean a huge floor, or bending over and/or walking to do a job, that is exactly why his or her wages are low and the product of his work overpriced.

The politicians who promise a $15 an hour minimum wage can no more deliver on that than Jack Cade would have been able to deliver seven half-penny loaves of bread for a penny, but industrialists can deliver $20  an hour wages. Some, in Pennsylvania's gas drilling industry, pay upward of $25 an hour. I believe the Federal government, and also state departments of labor and industry, should educate all stakeholders (Labor, Capital, and Customers) on how to make this happen.

Labor Relations and Unions

Ford's detractors will be quick to point out the company's labor relations problems in the late 1930s including the Battle of the Overpass in which labor organizers were beaten up by Ford's security force. These problems happened not because the people who were running the company at the time used Ford's principles, but because they went against them. Upton Sinclair's pro-labor (and United Autoworkers-endorsed) The Flivver King proves that the company's management went against Ford's principles including a no-layoff policy.

"Twenty men who had been making a certain part would see a new machine brought in and set up, and one of them would be taught to operate it and do the work of the twenty. The other nineteen wouldn't be fired right away—there appeared to be a rule against that. The foreman would put them at other work, and presently he would start to "ride" them, and the men would know exactly what that meant."

Ford had a no-layoff rule because he knew that, the instant you lay people off when productivity improves, the workforce will not support further productivity improvements. Frederick Winslow Taylor said the same thing in Principles of Scientific Management (1911) as did Ford himself (My Life and Work). When Ford was in charge, his workers not only had no desire to unionize, they turned against their own union when it called on them to strike.

"In England we did meet the trades union question squarely in our Manchester plant. The workmen of Manchester are mostly unionized, and the usual English union restrictions upon output prevail. We took over a body plant in which were a number of union carpenters. At once the union officers asked to see our executives and arrange terms. We deal only with our own employees and never with outside representatives, so our people refused to see the union officials. Thereupon they called the carpenters out on strike. The carpenters would not strike and were expelled from the union. Then the expelled men brought suit against the union for their share of the benefit fund. I do not know how the litigation turned out, but that was the end of interference by trades union officers with our operations in England." (My Life and Work, 1922)

Ford knew how to break up a union; pay the workers as much rather than as little as possible, and then the workers will look for ways to make their jobs even more productive because they know a fair share of the improvements will show up in their pay envelopes. Ford acknowledged that unions are necessary when employers look for ways to pay their people as little as possible. We got the United Mine Workers because mine bosses looked for ways to pay coal miners as little as possible and then cheat them of those wages in company stores as depicted accurately in The Molly Maguires.

When the employer looks for ways to cut wages and benefits, or ship jobs offshore, while the CEO rakes in millions of dollars in salary and bonuses, the employer does not deserve the respect, trust, and loyalty of its workforce. Ford made it emphatically clear (My Life and Work) that such a CEO was unfit for his job and the best way for the company to cut expenses would be to fire that CEO for incompetence rather than lay off workers and/or ship jobs offshore.

"Cutting wages is the easiest and most slovenly way to handle the situation, not to speak of its being an inhuman way. It is, in effect, throwing upon labour the incompetency of the managers of the business."

I also know, however, of organizations in which the CEO or owner cut his own pay to nothing during hard times, at which point workers were willing to accept small pay cuts to keep the organization in business.


Bill "at" levinson4nepa.com

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