The Upward Price Spiral
On January 5, 2011, I was flying to Las Vegas for the Consumer Electronics Show (footnote 1). On January 5, 1914, Henry Ford announced that he would pay a minimum of $5 to eligible employees who worked an eight-hour day. (At that time, a good wage was $2.50 for a workday of 10 hours.) Ford was not being altruistic; he wanted to motivate his employees both to become more productive and to stay loyal to their employer. And there were strings attached: A Ford employee "must show himself to be sober, saving, steady, industrious and must satisfy . . . staff that his money will not be wasted in riotous living." But Ford also wanted his workers to be able to afford the products they made. It was Ford's action, I believe, that triggered the rise of the American middle class, and it was that middle class's combination of disposable income and increased leisure time that fueled the growth of high-end audio.