In 1914, Henry Ford increased the wage he paid workers in his car factory in Dearborn, Michigan,

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In 1914, Henry Ford increased the wage he paid workers in his car factory in Dearborn, Michigan, to $5 per day. This wage was more than twice as much as other car manufacturers were paying. Ford was quoted as saying, "The payment of five dollars a day for an eight-hour day was one of the finest cost-cutting moves we ever made." How can paying an above-market wage result in a firm cutting its costs?
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Economics

ISBN: 978-0134106243

6th edition

Authors: R. Glenn Hubbard

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