Needed: A Few Good Men and Women

Similar things might be said about cobalt mining by artisanal miners, who work for paltry wages in the Congo under conditions reminiscent of King Leopold II’s tenure there long ago. Personal protective equipment is almost completely absent, and loss of limbs to accidents (rather than as a punishment for failing to meet Leopold’s rubber quotas) is common. High-wage miners with powered equipment and, of course, safety equipment, could almost certainly mine the cobalt for less money a ton.

“Forty years ago I watched the workers on the Suez Canal,” wrote Harrington Emerson. “Many of them were girls, digging up the sand with their bare fingers, scooping it into the hollows of their hands, throwing it into the rush basket each had woven for herself, lifting the baskets to their heads, and carrying the load of 20 to 30 pounds a hundred feet up the bank and dumping it. Panama excavation is being done by steam shovels.”

Much of the original work on the Suez Canal was performed by unpaid workers under the robot or corvée system (in which taxes are paid in labor rather than money).⁶

1. Slaves, people who pay taxes in the form of labor (robot or corvée), and people who know they are being paid as little as possible will do only what they are told, and only when an overseer or supervisor is watching. They will not care about quality, productivity, or service to the customer.

None of this suggests that attempts to mandate high wages for jobs that don’t generate enough value to support them will end well. Suppose, for example, a government mandated a $10 per hour minimum wage to pick cotton by hand. If the farmer had to pay a thousand workers to do the job, this would come to $10,000 an hour plus employment taxes. Cotton would be unaffordable, and everybody involved would soon be unemployed. It’s quite practical, though, to pay one worker $30 or $40 an hour to run a harvesting machine that can do the same work, even when one adds the capital and operating cost of the machine.

Ford’s results—namely, the rise of one of the most profitable enterprises in history less than 20 years after Ford built his first automobile, a two-cylinder quadricycle, in his garage while paying unprecedented wages—speak for themselves. High-wage labor is entirely consistent with profitable and low-cost manufacturing, and recognition of this fact is a prerequisite for reshoring. There are two principal reasons:

Recognition of this will go a long way toward long-overdue reshoring of American manufacturing capability. William R. Basset pointed out more than 100 years ago that cheap labor is costly in the long run.

Had the Greeks been able to hold the second path that led behind their lines, Persia would have lost the war at Thermopylae rather than Marathon and Salamis.

“We all know that cheap labor is not cheap… In any operation in which the material costs are high as compared with the labor costs, the highest possible pay is the cheapest if it results in savings of material, or in a fine product, or in both. In the grades of production where labor is the big factor, high wages are economical if the wastes of human power can be cut to a minimum.” ¹

References
1. Basset, William R. When the Workmen, Help You Manage. The Century Co., 1919.
2. Ford, Henry, and Crowther, Samuel. Moving Forward. Doubleday, Doran, & Co., 1930.
3. Taylor, Frederick Winslow. The Principles of Scientific Management. Harper Brothers, 1911.
4. Sturkey, Marion F. “Select USMC Slogans.” Heritage Press International, from 2001 book excerpt.
5. Longworth, Philip. The Art of Victory. The Life and Achievements of Field-Marshal Suvorov, 1729–1800. Holt, Rinehart, and Winston, p. 220, 1965.
6. Emerson, Harrington. The Twelve Principles of Efficiency, sixth edition. The Engineering Magazine, 1924.
7. Radio Free Europe/RadioLiberty. “Uzbek Cotton-Picking Claims Eighth Victim.” Oct. 23, 2013.
8. Indiamart. Mild Steel Electric Cotton Picking Machine. InterMESH Ltd.
9. Ford, Henry, and Crowther, Samuel. My Life and Work. Doubleday, Page & Co., 1922.

The cotton-harvesting example shows that the ratio can be 1,000 to one, or even higher. Employers should therefore welcome rather than resist high wages when productivity improvements enable them because, as Ford said, “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.”⁹

Management

Manufacturers do better with high-wage workers

The principle that fewer soldiers or sailors might be better, however, dates back to ancient times.

To this Henry Ford added:

“There is nothing sentimental about wages. Hiring men because they are cheap will ruin a business as quickly as buying material because it is cheap.”²

Taylor stipulated that, in this case, he was talking to an uneducated laborer and not to a skilled mechanic, and he wanted the laborer to think solely about the high wages he would earn if he did exactly what he was told. The man was, in fact, able to move almost four times as much pig iron a day, and with less effort, than he would have had he been left to his own devices. A cheap worker, i.e., one who is paid as little as the employer can manage, won’t care how much work he or she gets done, nor care about following standards.

A few good men

Uzbeks have died while harvesting cotton by hand under the robot or corvée system, and their quota is 20 kg (44 lb) a day.⁷ Maybe Uzbekistan can’t afford John Deere or International Harvester machines that can do the work of a thousand or more hand laborers, but India sells a rechargeable handheld device for 3,500 rupees (about $42) that can harvest 150–180 kg a day, or no less than 7.5 times the 20-kg quota for hand labor.⁸

The job must justify the wages

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“Well, if you are a high-priced man, you will do exactly as this man tells you tomorrow, from morning till night,” wrote Taylor. “When he tells you to pick up a pig (iron) and walk, you pick it up and you walk, and when he tells you to sit down and rest, you sit down. You do that right straight through the day. And what’s more, no back talk. Now a high-priced man does just what he’s told to do, and no back talk. Do you understand that? When this man tells you to walk, you walk; when he tells you to sit down, you sit down, and you don’t talk back at him. Now you come on to work here tomorrow morning, and I’ll know before night whether you are really a high-priced man or not.”

William R. Basset pointed out more than 100 years ago that cheap labor is costly in the long run.

Are you a high-priced person?

Although Ferdinand de Lesseps later brought in steam-powered equipment, the Suez project finished five years late and 166% over budget. It was far more cost-effective to pay a few people good wages to run the steam equipment than it was to give thousands or tens of thousands of people subsistence to do the job by hand.

Industrial progress has always required that each worker be able to do a lot more and receive higher wages for doing so. Taylor told us more than 100 years ago, “…the one element more than any other which differentiates civilized from uncivilized countries—prosperous from poverty-stricken peoples—is that the average man in the one is five or six times as productive as the other.”

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“Good workmanship has to be paid for, and good workmanship is cheap at almost any price. It is simply a waste of time and money to erect elaborate manufacturing equipment and then expect that it can be run by low-paid men.

This U.S. Marine Corps recruiting slogan is almost as old as our country. In 1789, Capt. William Jones advertised for “a few good men” to enlist.⁴

The famous Russian field marshal Aleksandr V. Suvorov, who won 63 battles, including some against Napoleon’s future marshals, and lost none, wrote in his Science of Victory, “A trained man is worth three untrained: that’s too little—say six—six is too little—say ten to one.” Training was so important that Suvorov led some drills himself, a task that most armies would have left to noncommissioned officers.⁵

Construction, agriculture, and mining

Valuable American manufacturing jobs were sent offshore under the dysfunctional belief that low-wage labor would result in lower product costs and higher profits. Although it may seem counterintuitive, manufacturers do better with high-wage workers who will acquire skills, follow work standards, and take initiative to improve business performance.

Frederick Winslow Taylor didn’t want cheap workers; he wanted high-priced ones. If this seems counterintuitive, a high-priced worker will follow what we now call standard work, the best-known way to do a job.³

The Battle of Thermopylae, in which fewer than 4,000 Greeks faced an army of (purportedly) a million Persians, was a variant of this principle. The Greeks, who were led by the famous 300 Spartans under King Leonidas, occupied a narrow path where the Persians couldn’t bring their superior numbers to bear. The Greeks had to supply food and water for only 3,000 or 4,000 men, while the Persian king, Xerxes, had to supply 200,000 to a million. Xerxes’ position was hopeless until he found a path that would allow him to attack the Greeks from behind. He couldn’t advance because his cheap men couldn’t defeat the high-priced Spartans in the narrow pass. He couldn’t retreat because this would have told his entire army that he was afraid of the Greeks, and it was quite possible that his huge army had already eaten everything in its path and couldn’t live off the land if it fell back. If he stayed where he was, his army would starve.

2. Floor space, supervision, and basic sustenance are still necessary for unpaid or poorly paid workers. The latter issue—the need to feed and house unpaid, or in the case of some armies, volunteer workers—explains why huge armies often lost to much smaller ones.