▲ 84 points
back
130 comments
> Ford’s signature element in its new labor agreement was to get full wages to entry-level workers. But beyond that, he began looking at the labor shortage in trade work, starting with technicians.“Old-timers in our plants were saying, ‘It’s no longer a career, Mr. Farley. Working at Ford is no longer a career.’” He warned that millions of well-paid jobs are going unfilled because they require specialized skills. Putting the salaries for these jobs at $100,000 and above, Farley argued that they require training. “You can’t work on a diesel F-150 if you haven’t been trained for five years, at a minimum five years,” Farley noted. It’s not a demand problem—there’s plenty of work—but a dire shortage of young people choosing and staying in the trades.
I looked into this a bit more, because I wanted to understand how much the Ford CEO's posited solution rested on "you can earn a living if you do a different job!" vs. "You can earn a living at any full-time job at my company".
In 2023, the new agreement Ford made with UAW:
- Increased starting wages by 68%, from $17 to $28 an hour.
- New workers reach the top pay rate in three years, a significant improvement from the previous eight-year progression.
- Top wage increased to over $40 an hour.
This is not unprecedented. Historically Henry Ford drew a lot of attention in 1914 when he doubled people's wages overnight.
https://www.saturdayeveningpost.com/2014/01/ford-doubles-min...
Pretty crazy improvement, seems like he's putting his money where his mouth is
Why does it take five years' training to "work on" a diesel F-150? That's longer than most undergrad engineering degrees!
It's incredible how little impact unions have on wages. For decades nobody cared about the wages, then once a non-union shop (Tesla) starts paying significantly more, the Ford CEO takes notice and double wages. One has to wonder if their wages might be higher if it weren't for the UAW, and companies had more flexibility to raise them during strong periods of growth
Finally, someone at the top realizing how unrealistic new career paths are. They must have a solid step on a career ladder. This includes the daily cashflow to stick with it and actually make it to that 2nd step. If you continue to jerk them around with minimum wage jobs, everyone will regret it.
For this to be the CEO of Ford in particular is interesting because this is part of their founding narrative. Whether it holds up to historical scrutiny isn't something I can answer but the lore is that Henry Ford purposely paid more than market for his laborers with the idea that he'd get his pick and then those workers would then buy Fords with that money because they knew they were the best cars built by the best workers with the most experience because they stayed at Ford their whole careers.
Wasn't there some law suit from Chrysler, who tried to _stop_ him doing that? Presumably because it would give workers too much wage setting power in the market?
(CEO in a hot dog costume): we're all trying to find the guy who did this!
This epiphany is really just manifestation of many things like gasoline-on-fire stock buybacks [1] [2].
[1] https://www.epi.org/productivity-pay-gap/
[2] https://digitalcommons.pace.edu/cgi/viewcontent.cgi?article=...
From [1]
> The growing wedge between productivity and typical workers’ pay is income going everywhere but the paychecks of the bottom 80% of workers. If it didn’t end up in paychecks of typical workers, where did all the income growth implied by the rising productivity line go? Two places, basically. It went into the salaries of highly paid corporate and professional employees. And it went into higher profits (returns to shareholders and other wealth owners). This concentration of wage income at the top (growing wage inequality) and the shift of income from labor overall and toward capital owners (the loss in labor’s share of income) are two of the key drivers of economic inequality overall since the late 1970s.
This part:
> returns to shareholders and other wealth owners
My understanding is that "other wealth owners" include... pensioners (through pension funds), is that correct ?
Beside the sheer greed of shareholders, how much does the curve boil down to "companies have to use revenues to pay current workers and previous workers, and we make new 'previous workers' every year" ?
It is ridiculous to have American workers and Chinese workers doing essentially the same job, at the same quality, while their salaries differ enormously.
American (and European) automotive companies will never be able to compete long term in any market which allows competition between Chinese and American (or European) cars.
The labor of an auto worker is not worth that much and only by banning competition can American auto manufacturing survive short term.
There is a similar long term trend of people being less interested in the factory jobs in China. The government there is complaining of a factory worker shortage: https://www.bloomberg.com/news/articles/2025-04-02/china-wor...
And, of course, they have had factories moving to other countries like Vietnam. They're part of the same trend of factories constantly chasing after low wages.
Maybe China is the one that will find their labor compensation unsustainable?
Eh... "ridiculous" is a matter of perspective. If you're running a country and you want your people to be well-compensated and live meaningful lives, shuffling the hand in their favour is not violating some physical law. Countries restrain naked competition all the time to benefit their people.
To me it seems much more ridiculous to expect Western citizens to accept a degradation in living standards for the abstract notion of some universal economic efficiency. Though you can easily argue we're headed that way, it's mostly because of government capture by multinational corps.
Tariffs.
I listened to the podcast for this pretty much and then looked for entry level jobs. Zero
Just tell them to go live in a van down by the River Rouge, Mr. Farley.
It's interesting that myself, and a non-insignificant number of other people, would take an option like this if it were legal. It would certainly make vacations much more affordable to be able to bring my home with me and not pay for an AirBNB/hotel + rental car/ubers!
However, to someone for whom rent is an onerous expense, vans and box trucks are prohibitively expensive, especially when you consider 10 year TCO.
Fun note, Jim Farley is indeed a cousin of Chris Farley.
This article is wild. I love it when rich people tell you 1) they've been asleep for a decade and 2) their politics are insane.
he was especially struck by stories from young factory employees. Many of them said they could not support themselves by working at Ford alone. “When I met with my entry factory workers, they were saying [they] had to have three jobs.”
Farley described a revelation about the erosion of what blue-collar work used to represent—stability, pride, and a single income that could support a family.
Dimon called America the “bastion of freedom, arsenal of democracy,” and argued that the country had “gotten bogged down and made a lot of mistakes in how to grow our economy for the benefit of all Americans.” He urged Farley to keep fighting against what he called America becoming a “nation of compliance and box-checking.”
He warned that millions of well-paid jobs are going unfilled because they require specialized skills. Putting the salaries for these jobs at $100,000 and above, Farley argued that they require training.
He said there’s a general attitude of frustration, a sense of “How the hell do we fix this?”
Arsenal of democracy is something that Detroit specifically was called during WWII, so historically it isn't a wild phrase. Ford Motor Company itself built complete B-24 heavy bombers too.
Edit: also an FDR quote https://en.m.wikipedia.org/wiki/Arsenal_of_Democracy
I think you'd be surprised at how many people absolutely, positively, do not want to sit in front of a computer all day.
But more generally, instead of complaining about why he didn't know all this already, why not celebrate that it's finally being acknowledged.
I’m with you until the bootcamp - cap
Why would I learn my father’s trade when I can see all day in TikTok all of these people doing GRWM with fancy fits and making matcha lattes at their super fancy corporate offices, or others becoming rich by having enough likes and followers, or others having lambos from day trading?
Now that I see other peoples idealized lives 24/7, I want THAT.
In the meantime I will work a 3 times/week 4 hour shift at Starbies.
——- Related: ——-
“Whop’s 2024 survey gathered insights from 910 U.S. Gen Alpha across the U.S. aged between 12-15 years old. Participants selected all careers they were aspiring towards.
1.YouTuber (32%) 2.TikTok creator (21%) 3.Doctor/nurse (20%) 4.Mobile app/video game developer (19%) 5.Entrepreneur (17%) 6.Artist (16%) 7.Sports athlete (15%) 8.Professional online streamer (15%) 9.Musician (14%) 10.Teacher (14%)”
Sure, but you might compare those people with people winning a lottery. You don't see the failures that are way more common
Seems like a good time to mention my old stand-by:
There is no such thing as a labor shortage. There may very well be a shortage of qualified people willing to work under the conditions and for the compensation a company would like to provide.
When stated that way you can see that there are several levers to pull, the most obvious being compensation.
> There is no such thing as a labor shortage.
Of course there isn't. This is out of touch employers saying "Nobody wants to work for $1 an hour, so must mean there's a shortage."
It's wild, that same in the service industry, restaraunts for example paying 1/2 dollars an hour and then putting the onus onto the customers to pay in tips.
https://www.businessinsider.com/what-its-like-to-work-at-waf...
It's ridiculous, GenZ has just realized they don't want to participate in the racket and I don't blame them.
99% of the time, I agree with you.
But hypothetically, what would you call a situation where 20 companies would all be willing to pay salaries of $1 million/year to fill 10,000 open positions that required 5 years of training, but there are only 5,000 people who have that training? Would that be a "labor shortage"?
It seems your solution works for companies willing to pay more to poach from other companies, but might not work in situations where all of them need more skilled labor now.
Also, the $1M/year illustrates a point...why not $10 million or $100 million/year? At some point, the salaries are indeed "high enough" but the skills still just aren't available to hire.
> and for the compensation a company would like to provide.
"would like to" is usually "can justify, financially". Most companies don't have a bunch of extra money laying around.
> When stated that way you can see that there are several levers to pull, the most obvious being compensation.
I know the way you mean that (companies pay more) and that's an option that does happen but it also goes the other way, employees can accept less (unless minimum wage makes it illegal for people to accept work).
I agree with that, but isn’t it also the case that if an employer raises wages enough to get the workers they need, they have to do some combination of passing those costs along to customers and reducing the benefits to shareholders, which in turn reduces their ability to remain a viable business and keep people employed? It’s a balancing act.
The prospect of working on something that profits from society steaming full speed ahead towards the climate catastrophe (and you being at the forefront) or in the best case being obsolete in a few years as we ramp down fossils should also make the thinking person pause.
> When stated that way you can see that there are several levers to pull, the most obvious being compensation.
Ford's profit margin was 1.7%. Lots of innovative/productive American companies since 1970 for workers to aspire to = the enterprise can't continue.
your old stand-by doesn't make any sense "there is no such thing as a labour shortage" is totally represented by a shortage of qualified people for the given compensation. This is the basis of every economics supply & demand graph, where explicitly refer to the misalignment as a surplus or shortage.
Now imagine if you could make affordable sedans again, Jim. How does Gen Z afford a $50,000 electric SUV?
Unfortunately sedans and hatches are just about completely out for the domestic automakers- they sold poorly and were discontinued. The reasons behind poor sales are surely multi-faceted, but, for Ford in particular, they didn't help matters with quality issues like the "Powershift" dual-clutch automatic, which was flawed from the beginning and left a lot of Focus and Fiesta owners (both now discontinued in the US) with a bad taste in their mouth.
Ford Maverick starts at around $27K. It's not a sedan but it's not $50K.
Nobody is buying new electric SUVs and saying the words "it was in my affordable range" They buy it used when its half-priced or lower, around $25k, or lease it.
“And there I was sitting on my yacht, middle of September — when I had an epiphany. My workers are poor, but why…”
Italian boot leather just tastes better.
> But beyond that, he began looking at the labor shortage in trade work, starting with technicians.
It's amazing how there can be labour shortages, yet companies still don't pay people a living wage. I thought the market was supposed to be all based around supply and demand. This just shows how out of touch these CEO's are.
They should work a year on the lowest salaried employee of their company for a while.
The market will follow supply and demand at its equilibrium, which clearly we are not at. The question is: what is preventing it from reaching that point?
You guys really are gullible if you think this is some good hearted gesture.
Follow the money.
That Ford CEO is stupid.
There's no "shortage" of workers. Corporations are expecting other people to train their employees past entry level and pay these people with midlevel experience like badly paid unskilled laborers.
Nobody is investing years of their time and large sums of money to get trained up for a shitty job? SURPRISE SURPRISE
If you won't take an average person with no knowledge of your industry and train them to be an expert while on the job, the problem is you, not everybody else.
I don't disagree, but I do think the modern culture of company hopping is contributing to this. As a leader entrusted to make good decisions for the company, you must consider this reality.
At a previous company we hired a lot of junior engineers with the idea that our relatively high pay and reasonably good work would help us build a strong generation of seniors a few years down the road. What we mostly found was that we spent a ton of money and our sr eng time training and sharpening them, only for the vast majority of them to leave after 1 to 3 years. As I've gotten more into hiring, it's not at all surprising to me now as this is just clearly in the culture.
To be clear I'm not blaming the employees, in fact I blame ridiculously stupid HR practices for the last 20 years because they built a structure in which the only way to get a raise was to leave the company, and that was also often the best way to get promoted too.
> If you won't take an average person with no knowledge of your industry and train them to be an expert while on the job, the problem is you, not everybody else.
Exactly this, I have seen the issue too in mid or senior levels, not just fresh, because even if you're senior, most likely your expertise is on a very specific topic, not necessarily the job specific one, could be something very close to it. It's like learning on the job either through training or self-taught is an alien topic to them. I remember one time I had an interview for a job that needed some knowledge on navigating a Linux environment, and I have personally been using Linux at work or personally since ~2004 or so, only to find out during the interview the expectations were Linus Torvalds rock star level in developing kernels, for a pay of ~90k, and the job itself isn't even about Linux, it was some automation/robotics so the OS is just your environment, haha!
Every junior I've brought in over the past 7 years or so with the expectation of training them has immediately left after I've invested not only money but also significant amounts of more experienced developers time to bring them up to speed before I managed to recoup anything useful for that investment. I can already hear people say pay more, but that isn't up to me and besides that if we're going that route why not just hire the experienced person in the first place?
Of course increasingly it's hard even to train at all, I'm getting absolute garbage AI slop from our most junior developers and they don't seem to be learning any more. I sit and try to explain why their solution to some task won't work and they are not engaged with the actual solution they are implementing at all. I've tried to get them to engage more with the AI as a learning and exploration tool, but I'm not having much luck, they're completely focused on inputing the task, really at the mercy of the direction of the tools.
I really hope AI comes through for us in the end because it seems we're at the end-game for human learning.