Question

In 1914, Henry Ford raised the pay for his auto workers to $5 to work for eight hours in a day. Previously, most workers had been paid only $2.34 to work for nine hours. Ford started this practice because he hoped to reduce worker turnover and encourage workers not to join labor unions. This approach by Ford and other corporations became known as

Answer 1

Welfare capitalism

When a capitalist industry seeks the best well-being of its workers so that they will be happy working for the corporation and stay with the corporation, we call this "welfare capitalism." Ford's idea included not only increasing workers' wages and reducing their work hours, but also set up a savings and loan for workers to save their added income. By paying Ford workers more, Ford employees also became able to become some of the company's best customers, able to afford the cars the company was producing. So from a management standpoint, welfare capitalism benefits the company as well as the worker.