Labor: Kaiser's Healthy Bonus

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Henry J. Kaiser, 80, and his son Edgar, 54, have entered into a unique agreement with the Steelworkers union, believing that the best way to keep labor costs reasonable is to peg them to production costs. Last week Kaiser Steel Corp. released the first results of its radical new bonus plan, under which workers divvy up 32.5% of whatever the company saves by cutting costs or increasing productivity. To 3,930 employees went bonuses averaging $79 each for March, when the company was able to save $962,000 against expenses in 1961, the base year. Bonuses ranged from 15% to close to 50% of wages, but averaged 55¢ an hour on top of $3 in regular wages and benefits. The experiment's early success, following a similar showing by profit sharing at American Motors, is bound to stimulate other unions to strive for a slice of productivity or profit gains.