We believe this provision offers every opportunity for discrimination and reprisal, and already there have been indications that our fears in this regard have not been unfounded. The provision superimposes an indeterminate standard on the already existing performance rating system and should be eliminated from the law.

The AFGE and AFTE endorse the principle of comparability. The Salary Reform Act has provided a sound salary policy in adopting comparability with the compensation paid in private industry as the underlying principle of salary determination in the Federal service. We urge most sincerely that this principle be preserved and strengthened, that the means for comparison of Federal with industry salaries will be improved, and that the system will more and more assure Government workers of justice and equity and the Government itself greater assurance of competence that can be provided only by experience and long service in a position.

In closing, Mr. Chairman, we wish to express our appreciation to the committee for accepting our views on this very important legislative proposal.

TABLE 1.-Amount and percentage of increase of minimum rates in H.R. 11049 over schedule II of the Salary Reform Act of 1962, effective Jan. 1, 1964

TABLE 2.-Federal employees subject to Classification Act, by grade, all areas,

TABLE 3.-Number of employees1 in 4 general schedule grades who will receive less than 2, 2.5, or 3 percent under H.R. 11049

TABLE 4.-Rates needed in H.R. 11049 to raise salaries in 4 grades 3 percent over

The CHAIRMAN. We will now hear from Mr. Griner. You know, John is in my Sunday school class. I teach Sunday school, and he happens to be in my Sunday school class.

STATEMENT OF JOHN F. GRINER, PRESIDENT, AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES

Mr. GRINER. Thank you, Mr. Chairman, members of the committee, I would like for the record to show that we agree 100 percent with what Mr. Keating has said; that we have endorsed his statement, and I would also like to show that my statement at this point is in behalf of both the American Federation of Government Employees and the American Federation of Technical Engineers.

The problem that I would like to call your attention is similar to both of these organizations, and that problem is in respect to four grades in the Classified Act; namely, the grades 9 through 12. We

find there is about 322,378 employees in this category, within those four grades.

And in those four grades, the percentage of increase is less than 3 percent, and somewhat less, I might say materially less, than what was recommended by the administration in their original administrative bill, which, I believe, was introduced by Mr. Udall, and designated as H.R. 7552.

We find in these four grades that there is about half, or more than 100,000 employees who are in engineering positions. There are about one-fourth of 100,000 employees that are in accounting and budgetary work. There are about 10,000 of them in legal positions, and about 32,000 in investigating work, and about one-half of 30,000 that are working in physical sciences. We also find many doctors and nurses that are included in these four grades.

These are hard-to-get categories. In other words, among all of the recruitment that we now have, and where the Civil Service Commission has exercised its authority under section 504 (a) of the 1962 act, a great number of these people are included therein.

We feel that we just can't go back to our membership and the people who are involved in these particular grades and justify the action of not having at least a 3-percent increase for these people.

Furthermore, I would like to call your attention to, I believe, something that just needs clarification, and that is with respect to this 504 (a) of the 1962 act, which authorizes the Civil Service Commission by authority designated by the President to establish a new salary range of rates, above those in the regular rate range, of a grade in which positions for which recruitment and retention are difficult.

In other words, as we read the law, it would be very easy for the Commission to say that we have now established this range. Let us take the grade 9, for instance. I believe they established it on the base of the present growing step 5, and, of course, under this bill as presented, or under the Morrison bill, the step 5 in the grade 9 would mean somewhat of an increase.

We believe that they could say that it has been established, let's say, at $7,950 under the old bill, and we are going to hold to that range, and all that we are asking is that the language be clarified, so that these people will receive the same increase for the step 5 as other people who might be in that similar step.

Frankly, I think that was the intention, but the language certainly does not clearly define it.

With that, Mr. Chairman and members of the committee, I will close and say I appreciate any consideration that you might give to these two particular amendments.

Thank you very much.

The CHAIRMAN. John, we appreciate your remarks.

Mr. O'Connor, I am informed that you also wish to testify.

STATEMENT OF JOHN F. O'CONNOR, LEGISLATIVE DIRECTOR, UNITED FEDERATION OF POSTAL CLERKS

Mr. O'CONNOR. Now, Mr. Chairman, in the interest of conserving time, representing the United Federation of Postal Clerks, I am also presenting a statement. However, there are one or two things in my statement I would like to draw your attention to.

One is that the 1962 act has resulted in a number of inequities in the salary in connection with the years of service, and we would like to see something done concerning that, or looked at, anyway. And we also would like you to think about the absorption of costs as it concerns the postal service.

We have cut some service in the postal service at the present time, and it is resulting in some chaos. We think 10 percent more would add additional chaos to that service.

We thank you for the opportunity of talking to you today. The CHAIRMAN. We are certainly glad to have heard you. (The prepared statement of Mr. O'Connor is as follows:)

STATEMENT OF JOHN F. O'CONNOR, LEGISLATIVE DIRECTOR, UNITED FEDERATION OF POSTAL CLERKS

Mr. Chairman and members of the committee, I am John F. O'Connor, legislative director of the United Federation of Postal Clerks. Our national headquarters are located in the Federation Building located at 817 14th Street NW., Washington, D.C. We represent some 160,000 clerks in first-, second-, and third-class post offices in each of the 50 States and Puerto Rico and the Virgin Islands. Under Executive Order 10988, and as a result of a nationwide election conducted by the Post Office Department over a year ago, we hold national executive recognition for all clerks in the postal service.

I want to express our appreciation to the chairman and to the members of the committee for scheduling these hearings on salary adjustments so that we may express our views with respect to this extremely important subject.

I appear here today in support of legislation to bring about an adequate adjustment in the salaries of both postal and Federal employees. We believe that the Salary Reform Act of 1962 was a long step in the direction of fair and equitable postal and Federal employee salaries. It set up the machinery necessary to bring about proper annual adjustments.

We see the 1962 act not as exact justice, but rather as the best compromise that could be reached at the time. One of the things that persuaded us to accept the administration proposal was the thought that the annual reviews that would result would bring about annual adjustments, which certainly are to be preferred to the somewhat haphazard, too little, too late, patterns of former years.

Failure of the Congress to take favorable action on pay proposals at this session is, of course, unthinkable. In our judgment, such failure to act in this, the first test of the theory, would completely destroy the employees' faith in the comparability principle. The implied promise contained in section 503 of the 1962 Pay Act was not lightly given and postal and Federal employees are confident that these hearings will result in the enactment of legislation.

For one of the few times in history, there is very near universal agreement that an increase or adjustment in pay is justified. The amount of increase necessary to establish true comparability seems to be the only area of disagreement. We feel that the statements made by the Chairman of the Civil Service Commission, Mr. Macy; the Deputy Director of the Bureau of the Budget, Mr. Staats; and the Assistant Postmaster General for Personnel, Mr. Murphy, who have previously testified, have given the committee the necessary statistical data to support salary increases at this time.

The obligation imposed on the executive branch of the Government under section 502 of Public Law 87-793 has been fulfilled by the President. We believe that a further obligation rests with the Congress to translate the recommendations into law, taking into consideration the President's message, his letters to the Congress endorsing pay increases, the salary increases granted in private industry during the last 2 years, and the salary proposals presently before this Congress.

In discussing this question, we invite your attention to the long interval between the time the satistics on salaries in private industry are gathered and the time the recommendations of the President can be translated into legislation and made effective. There is a 2-year lag between the time when the information was collected in late 1961 and early 1962. This timelag must be taken into consideration if there is to be any true comparability.

The bill, H.R. 11049, reported by the House committee provides for an approximate additional 6-percent increase in the levels affecting the most numerous group of employees. The only way in which actual comparability could be attained would be to make any necessary increases retroactive to the time when the study by the Bureau of Labor Statistics was made.

There has been a general upward trend of 3 percent per year in wages in private industry for the years 1962-63. Assistant Postmaster General Murphy, in his appearance before the House committee on August 22, in reply to a question from Congressman Johansen, stated that the "average increase to date has been around 3 percent per year," and the Randall report (p. 7) confirms this. Our own experience and investigations and the reports of the Department of Labor also confirm these views.

That current wages of the vast majority of postal employees are somewhat less than ideal, or completely adequate in today's markets, is pretty generally recognized. Homeownership in the larger metropolitan areas, particularly new housing, is virtually out of reach. The highest paid clerks and letter carriers cannot meet the income requirements. As an example, the following table is taken from an advertisement of the M. T. Broyhill & Sons Corp., that appeared in the Washington Post for Saturday, June 29, 1963.

These homes are between 15 and 20 miles from downtown Washington, and it is safe to assume that they are within the price range for similar housing in the Washington area. These houses range in price from $16,000 to $20,800 each, which in this day and age is certainly neither unreasonable nor extravagant.

However, if you will refer to the last column in the table "Annual income required" you will find that clerks and letter carriers on today's salaries can only qualify for a VA loan for a single model and cannot qualify for an FHA loan for any model. If private financing is required, new housing is today completely out of the reach of postal employees.

Many salary inequities resulted from the 1962 Pay Act. The implementation of the act in October of 1962 resulted in many senior employees not receiving credit for their years of service. These senior employees, many with 25 and 30 to 35 years of service found themselves in the same salary level as employees with a great many years less service. An attempt to correct this situation was made in the House committee through introduction of the Dulski amendments to H.R. 8986, which would have given all employees credit for all their years of service. We feel that consideration by this committee should be given to amendments somewhat similar to the Dulski amendments in order to give proper recognition to the years of service of the employees who lost credit for these years of service in the 1962 Pay Act. Much of the criticism of the Dulski amendments came from what we consider fantastic guesses as to cost.

The present bill reported by the House (H.R. 11049, sec. 114) provides that the Postmaster General is authorized to advance any employee in PFS-9 or below who "(1) was promoted to a higher level between July 9, 1960, and October 13, 1962; and (2) is senior with respect to total postal service to an employee in his own post office promoted to the same position since October 13, 1962, and is at a step in the level below the step of the junior employee."

While we agree that this is an attempt to correct some of the inequities we believe that the date of July 9, 1960, should be eliminated for the reason that it is also presently creating an inequity in many instances. May I quote from a letter received from a member of our organization.