[arthurus]

Companies pay the least they have to pay to get the talent they need. Some companies think of the future and pay more to get higher quality employees.That tactic is less efficacious now with the functional requirement that characteristics other than merit must be included in hiring processes. And, companies have to survive until next year or their plans for ten years down the road are unproductive vanity. If they can't compete this year there is no next year.

Henry Ford classically paid higher wages than other car companies in order to get better talent. In Ford's day a company didn't have to carefully balance ethnic and sex ratios and thus reduce the talent level.And Ford got immediate advantage from the higher wages in that he was initiating a new more productive process and was getting the jump on all other car manufacturers. His relative costs were lowered in the short term as well as the long term.

Big established companies don't have the luxury of merit-only hiring or of paying higher wages because they are not starting something new that is radically more efficient than their competitors. In Ford's day a flood of cheap lablr would not have cancelled out the benefit of paying higher wages. Ford hired on talent only.

[KarlInOhio]

Also Ford’s assembly line required nearly everyone to show up every day. Unlike generalized assembly were if a quarter of the workers took a day off you just produced 25% less for the day, if you lost a small part of the assembly line you produced nothing. So Ford paid enough so that no one would risk his job through absenteeism.