Average salary increases and increases in salary cost, by class, of proposed foreign service schedules in H.R. 11049, as ordered reported by House Post Office and Civil Service Committee

[Based on June 30, 1963, employment figures of employees paid in accordance with Foreign Service rates in State, Defense, USIA, AID, and Peace Corps]

Aggregate cost, including Government's expenditure for retirement and insurance: $11,369,367. Aggregate cost would be reduced by an estimate $300,000 by change in pay computation method, thus leaving an aggregate net cost of about $11,000,000.

Average salary increases and incrseases in salary cost, by grade, of proposed Veterans' Administration medicine and surgery schedules in H.R. 11049, as ordered reported by House Post Office and Civil Service Committee [Based on full-time employment figures, June 30, 1963]

NOTE.-Aggregate cost including agency contributions for retirement and insurance (full-time employment), $9,582,280; including part-time employment, $9,827,507.

32-884-64-7

Senator MONRONEY. The reason for the very great disparity between GS-15 and the GS-16, GS-17, and GS-18 is the fact that the longevity actually has raised the GS-15's to the point where Congress put a cutoff line on GS-16 and even above last time. They do not reflect the higher salaries of appointed people.

Mr. MACY. That is right; the great change occurred because of the application of schedule II of the Federal Salary Reform Act last January which raised the range for GS-15 very close to the fixed ceiling of $20,000.

Senator MONRONEY. Because of the longevity factor built in the step increase.

Mr. MACY. It was due to the number of rates in GS-15 which to a substantial extent do reflect longevity. But even the lowest rate of GS-15 came up close to the GS-16 minimum rate.

Senator MONRONEY. I understand the House bill carries into the legislation compulsory absorption of the cost of the bill. Is that correct?

Mr. MACY. That is correct; I reflected that in the figure of $512 million that I cited. The 10 percent makes it possible to give you the $533 million. Roughly, $57 million is included in the $533 million figure that I gave you.

Senator MONRONEY. You are in favor of that remaining in the bill?

Mr. MACY. Yes; we believe that this will be helpful in continuing the President's program to hold down the level of payroll costs. Senator MONRONEY. How would that be accomplished?

Mr. MACY. This would be accomplished by the Bureau of the Budget through their apportionment process.

Senator MONRONEY. And it would be to try and reduce the numbers so you could upgrade the pay?

Mr. MACY. That is correct.

Senator MONRONEY. The Department would be expected to ask for 10 percent fewer employees. Ten percent would not come out that way, would it?

Mr. MACY. It would be largely absorbed by holding off the filling of vacancies.

Senator MONRONEY. Largely attrition.

Mr. MACY. That is correct.

The CHAIRMAN. Senator Fong?

Senator FONG. Mr. Macy, how far away would you say the present salary scales are from "equal pay for equal work”?

Mr. MACY. As far as that is concerned, the classification structure is adequate. The problem is the discrepancy with respect to comparability. And I think I can quickly state that for grades 1 through 5 the House bill would provide for roughly comparability as of 1963; that from there on up the comparability is between 1961 and 1962. So that we are still running behind in the middle and upper grades insofar as the comparability schedule is concerned.

Senator FONG. So we are concerned here more on a comparability principle rather than equal pay for equal work?

Mr. MACY. That is right. I believe that principle has been built into the grade structure that was approved in the Reform Act of 1962 and that it is now necessary to administratively assure that in taking the classification actions that are authorized that we adhere to the principle of equal pay for equal work.

Senator FONG. I think you remarked here that the gap is wide down to GS-8.

Mr. MACY. That is right; that is, down to GS-8 we are running behind in comparability. But in order to provide comparability from GS-8 up we need to raise this ceiling in this compensation house of ours or otherwise we have further compression among the various grades at the top.

If there is action taken, as proposed by the House bill, it will make it possible for us to adjust the pay for the intervening levels so that we can more nearly approach comparability without further compression in those grades.

Senator FONG. In other words, your ceiling is too low so you haven't enough room for the upper grades?

Mr. MACY. That is right. Some observers of Federal compensation have stated that the Federal compensation structure, as it exists at the present time, resembles a modern house, a solid foundation but a low ceiling. What we are proposing here is that we make sure that the architecture calls for more of a peak on this structure to make it possible for us to properly aline in terms of comparability the grade levels from 8 on up through executive pay.

Senator FONG. And the comparability gap is the widest up to GS-16, GS-17, and GS-18 because Congress did not take care of them in the last salary increase in the act of 1962?

Mr. MACY. That is right. In fact, the greatest discrepancy is at GS-18. Comparability would place grade 18 at $25,500. However, the level is constrained now to $20,000. That is why in the House bill the percentage of increase is substantially greater for the top three levels than it is for the other levels in career pay.

Senator FONG. Approximately how many people are involved in grades 16 to 18?

Mr. MACY. Roughly 3,000.

Senator FONG. And what increase would that represent?

Mr. MACY. It works out to roughly a 20-percent increase in salary for those in those three grades.

Senator FONG. Do you have the total amount involved?

Mr. MACY. I can provide that for you. I do not have it in my head. Senator FONG. You stated that cost of the increases would be about $533 million.

Mr. MACY. That is correct.

Senator FONG. And how much of that is for those outside of the legislative, executive, and judiciary?

Mr. MACY. $512 million is the increase cost outside of the legislative, executive, and judicial groups.

Senator FONG. So those groups only will take $11 million of the $533 million; is that correct?

Mr. MACY. It comes to $21 million.

Senator FONG. In that is $8.2 million for the judiciary and that includes every person working in the judiciary?

Mr. MACY. That is correct, sir. This would include the clerks in the courts, other support personnel for the judges.

Senator FONG. Just for the judges what would you say?

Mr. MACY. It is $4.9 million.

Senator FONG. And just for the executive?

Mr. MACY. Just for the executives would be $3 million.

Senator FONG. And just for the legislative?

Mr. MACY. $4.1 million for Members of Congress.

Senator FONG. So about $12 million has been set aside just for the legislative, the executive, and the Judiciary out of $533 million? Mr. MACY. That is correct.

Senator FONG. Thank you.

Mr. MACY. Thank you.

The CHAIRMAN. You have found that during the last 2 years that the cost of living has gone up a great deal; is that not true?

Mr. MACY. The cost of living has gone up in the last 2 years something less than 2 percent.

The CHAIRMAN. Do you not find that private industries have increased salaries considerably during the last 2 years for those in lower areas of employment?

Mr. MACY. Yes. That is really the findings of the Bureau of Labor Statistics survey that in comparing salaries from time to time there has been roughly a 22- to 3-percent increase in the salary level for positions like those in the lower levels of the Federal service. That is what is reflected in this amount.

The CHAIRMAN. That being so, the House bill reflects that and cares for that above what was recommended at first by the administration. Mr. MACY. That is right. The House bill endeavors to overcome the timelag with respect to the lower levels. And as I have testified, the comparability gap does continue between GS-8 and GS-18, but that it is extremely difficult to overcome that gap until we do something about the very top rates.

The CHAIRMAN. Any other questions? Senator Monroney.

Senator MONRONEY. What is the increase in grade 15? I note that this is where the disparity occurs and according to the pay table of the two previous pay increases the 15, if I read it correctly, had an increase of 8.1 and then effective January 1964, had a pay increase of

8.2.

Mr. MACY. The increase at grade 15 is 5.5 percent.

Senator MONRONEY. This time?

Mr. MACY. About $922.

Senator MONRONEY. And then the increase of the 16 and 17?
Mr. MACY GS-16 is 19.2 percent.

Senator MONRONEY. Over the present?

Mr. MACY. Over the present schedule which is really schedule I in the Salary Reform Act of 1962.

Senator MONRONEY. This makes up for the disparity that they did not receive in the January 1964 increase.

Mr. MACY. Exactly.

Senator MONRONEY. It was pushed up 8 percent to a total of 16.3 percent over former salaries.

Mr. MACY. That is correct. And GS-17 is 20.3 and GS-18 is 22.5. Those higher percentages are to overcome the substantial gap that has existed between the level for these jobs and a level that constitutes a projection of the comparability line. I think it is important that I make it clear that even these rates based upon the surveys that the Civil Service Commission has conducted do not represent comparable rates with private enterprise.

It is very difficult at this level of responsibility to arrive at any kind of exactitude in measuring comparability. Consequently, we have

taken the comparability line up to GS-15 and then just projected it statistically in order to get these levels.

Senator MONRONEY. Are step increases generally comparable to private industry?

Mr. MACY. Yes; generally private industry follows a rate increase or more than 3 percent, which is the amount that is written into the Salary Reform Act schedules as the difference between rates within a grade.

Senator MONRONEY. Thank you.

The CHAIRMAN. Senator Fong.

Senator FONG. Mr. Macy, would you say, taking a figure of $533 million in mind and taking the figure of $12 million in mind only for the executive, legislative, and the judiciary, that the reluctance really to achieve reasonable comparability is due to the fact that we have been reluctant to look at 22 percent of the $533 million which will give you the $12 million, to really look at that 22 percent, in a more realistic manner?

Mr. MACY. I would agree with that observation completely.
Senator FONG. Thank you.

The CHAIRMAN. I see our friend from West Virginia. Do you have some questions, Senator Randolph ?

Senator RANDOLPH. Mr. Chairman, I regret that I have not been privileged to listen to the statements of the Chairman of the Civil Service Commission, Mr. Macy. I presume, Mr. Macy, you have endorsed the basic bill which is pending in this committee.

Mr. MACY. Yes, sir. The bill that has been reported out of the House committee, H.R. 11049, and is before this committee today. Senator RANDOLPH. Have you stated your views this morning on the advisability of an increase in salary for Members of the Congress? Mr. MACY. I have indicated that title II of H.R. 11049 which specifies an increase for Members of Congress is appropriate and as set forth in the bill maintains sound interrelationships among the branches of Government.

Senator RANDOLPH. Mr. Chairman, do you feel that the raise should be $10,000 rather than any figures below that amount?

Mr. MACY. Yes; I testified earlier that my position was that a higher figure such as $10,000 would be more appropriate and entirely warranted in view of the information we have concerning the comparable salaries outside of Government.

Senator RANDOLPH. One further question, Mr. Chairman.

If in the judgment of the House and Senate no appreciable raiselet's say a $2,500 raise were the figure-would be included in the bill, you would think of the overall purpose of the increase for Federal employees. You would ask the President presumably to sign such a bill, is that true?

Mr. MACY. Let me make certain that I understand your question fully. This is in the event that the Congress were to enact a bill that would call for an increase of $2,500 in congressional pay and in executive pay, what would my recommendation be to the Congress.

I fear that that is an "iffy" question which I hope will never have to be answered. However, I would feel that some increase would certainly be better than none. But I feel as small an increase as that would not go sufficiently far to rectify the inequities that exist at the present time or to meet the needs of the Federal service.