The Expanded and Annotated My Life and Work

The Business Must Create the Wages
The previous material shows what happens to employers, including the 
Ford Motor Company under Ford’s successors, who look for ways to pay 
their workers as little as possible. Labor, and especially unions, must rec-
ognize in turn that no system can pay more in wages than it creates in 
value. Labor must help create the value through the removal of waste from 
the system, which is the focus of Lean manufacturing.
* * *
“What ought the employer to pay?”—“What ought the employee to receive?” 
These are but minor questions. The basic question is “What can the busi-
ness stand?” Certainly no business can stand outgo that exceeds its income. 
When you pump water out of a well at a faster rate than the water flows 
in, the well goes dry. And when the well runs dry, those who depend on 
it go thirsty. And if, perchance, they imagine they can pump one well dry 
and then jump to some other well, it is only a matter of time when all 
the wells will be dry. There is now a widespread demand for more justly 
divided rewards, but it must be recognized that there are limits to rewards. 

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Wages  •  105
The business itself sets the limits. You cannot distribute $150,000 out of a 
business that brings in only $100,000. The business limits the wages, but 
does anything limit the business? The business limits itself by following bad 
precedents.
If men, instead of saying “the employer ought to do thus-and-so,” would 
say, “the business ought to be so stimulated and managed that it can do 
thus-and-so,” they would get somewhere. Because only the business can pay 
wages. Certainly the employer cannot, unless the business warrants. But if 
that business does warrant higher wages and the employer refuses, what is 
to be done? As a rule a business means the livelihood of too many men, to be 
tampered with. It is criminal to assassinate a business to which large num-
bers of men have given their labours and to which they have learned to look 
as their field of usefulness and their source of livelihood. Killing the business 
by a strike or a lockout does not help. The employer can gain nothing by 
looking over the employees and asking himself, “How little can I get them 
to take?” Nor the employee by glaring back and asking, “How much can I 
force him to give?” Eventually both will have to turn to the business and ask, 
“How can this industry be made safe and profitable, so that it will be able to 
provide a sure and comfortable living for all of us?”
But by no means all employers or all employees will think straight. The 
habit of acting shortsightedly is a hard one to break. What can be done? 
Nothing. No rules or laws will effect the changes. But enlightened self-interest 
will. It takes a little while for enlightenment to spread. But spread it must, for 
the concern in which both employer and employees work to the same end of 
service is bound to forge ahead in business.
What do we mean by high wages, anyway?
We mean a higher wage than was paid ten months or ten years ago. We do 
not mean a higher wage than ought to be paid. Our high wages of to-day may 
be low wages ten years from now.
If it is right for the manager of a business to try to make it pay larger divi-
dends, it is quite as right that he should try to make it pay higher wages. But 
it is not the manager of the business who pays the high wages. Of course, if he 
can and will not, then the blame is on him. But he alone can never make high 
wages possible. High wages cannot be paid unless the workmen earn them. 
Their labour is the productive factor. It is not the only productive factor—poor 
management can waste labour and material and nullify the efforts of labour. 
Labour can nullify the results of good management. But in a partnership of 
skilled management and honest labour, it is the workman who makes high 
wages possible. He invests his energy and skill, and if he makes an honest, 
wholehearted investment, high wages ought to be his reward. Not only has he 
earned them, but he has had a big part in creating them.

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106  •  The Expanded and Annotated My Life and Work
It ought to be clear, however, that the high wage begins down in the shop. 
If it is not created there it cannot get into pay envelopes. There will never be 
a system invented which will do away with the necessity of work. Nature has 
seen to that. Idle hands and minds were never intended for any one of us. 
Work is our sanity, our self-respect, our salvation. So far from being a curse, 
work is the greatest blessing. Exact social justice flows only out of honest work. 
The man who contributes much should take away much. Therefore no ele-
ment of charity is present in the paying of wages. The kind of workman who 
gives the business the best that is in him is the best kind of workman a business 
can have. And he cannot be expected to do this indefinitely without proper 
recognition of his contribution. The man who comes to the day’s job feeling 
that no matter how much he may give, it will not yield him enough of a return 
to keep him beyond want, is not in shape to do his day’s work. He is anxious 
and worried, and it all reacts to the detriment of his work.