11 October 2013

On the 100th Anniversary of Henry Ford's Doubling Wages, Here's a City That's Doing It Again

The bureau of Labor Statistics casually announced that wages in San Mateo are up 14.8% in the last year. That's huge. But a big reason for this is a really startling increase within the IT world. The BLS reports:
Within San Mateo, an average weekly wage gain of $2,996 or 104.1 percent in
information had the largest contribution to the increase in average weekly wages.

A weekly gain of $3,000 works out to an annual raise of over $150,000. These people, on average, doubled their annual salary from $150,000 to $300,000.

When Henry Ford doubled wages to $5 a day in 1914, he helped to ignite a revolution in work that helped to create a middle class. I'd say that on the anniversary of this momentous business history, San Mateo has found a great way to celebrate.

San Mateo, south of San Francisco and north of Palo Alto, is in the heart of Silicon Valley.  It's not as though there are just a handful of IT folks in that part of the world. Note, too, that this doubling of wages isn't speculative. It happened. And largely without fanfare. But what if this spread beyond the boundaries of Silicon Valley?

Imagine, 100 years after Henry Ford did it, communities again doubled prevailing wages within a year. What sort of class would that create?

Note: This article in the San Jose Mercury News posted in July shows San Mateo County workers having an average weekly salary of $3,240. That includes everyone - not just IT. This is not just a 100% raise over the previous year. It is more than 50% higher than the next highest paid county (New York, which includes Manhattan and Wall Street).
Now it could be that average wages really went up that much and that within IT the average wage of $300,000 means that for everyone in tech making only $100k there is someone making $500k. It is also possible that for every 1,000 guys making only $100k there is someone who exercised stock options worth $200 million. And Facebook did go public, so something like that may have happened.
In any case, it seems further evidence that what Henry Ford did for manufacturing workers with the assembly line, Silicon Valley could do for knowledge workers with entrepreneurship and stock options.

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