National Affairs: Nut in Escrow

Little Jim Carey’s big United Electrical, Radio & Machine Workers of America last week ended a wage dispute by taking part of the chance on prosperity that every employer has to take. Other party to this extraordinary labor deal was Mergenthaler Linotype Co., which makes typesetting machines for printers the world over.

Since November 1937, the union has had a contract with Mergenthaler’s Brooklyn plant. Last month it called a strike to resist a 10% wage cut for 1,600 employes.

As a compromise Mergenthaler’s President Joseph T. Mackey proposed to put 10% (about $200,000) of his annual wage bill in escrow, the sum to revert to the company if it lost money next year, to go to the workers if a profit was earned. When young Mr. Carey’s young deputy, William Mitchell, turned this down, New York labor mediators suggested that Mergenthaler continue to pay 95% of present wages, put 5% in escrow until September 1939. To this Messrs. Mackey and Mitchell last week consented. At fiscal year’s end, an impartial arbitrator will go over the Mergenthaler books. If Mergenthaler is in the red, the company takes the amount of its deficit out of the $100,000 nut, gives back the rest to the workers. If the deficit is $100,000 or more the workers of course get nothing; if there is a profit, they get all the $100,000.