Chapter 22: Section 3. New Methods and Business Organizations. Terms to Know. Capitalism Economic system in which individuals, rather than governments, control the factors of production Commercial capitalism
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In about 1914 Henry Ford found himself facing a high turnover rate in his labor force. Rather than continue to hire new employees to offset these turnovers, Ford doubled the daily wage of his workers from about $2.50 to $5.00. His tactic paid off in more ways than one. Not only did his labor force stabilize, his operating costs also decreased. These positive factors allowed Ford to increase production.
Why was it a good tactic for Ford to double the daily wages to the workers.
Answer: Skilled and reliable workers stayed, reducing operating costs.