of Government employees who are dependent upon the consideration of measures for their welfare by this committee.

I wish to commend the continuing concern of the chairman of this committee for the thorough discussion and impartial analysis of bills referred to this body. I would also express our appreciation to Representatives Morrison, Dulski, Olsen, Wallhauser, Broyhill, Udall, Ellsworth, and Daniels, members of the committee, for the bills they have introduced in behalf of salary adjustment.

It is my desire to express our support of the proposals in these bills which will benefit not only classified employees but employees of the Post Office Department as well. I am glad to join with other unions, such as the postal unions, in support of those provisions in bills before this committee which would benefit both postal and classified employees.

There appears to be no question that the need does exist for salary adjustment to bring up to the level of comparability the rates in the general schedule of the Classification Act and in the salary schedules for the postal and other groups included in the bills under consideration. However, the need does not end there. There are sound reasons why there should be upward adjustment of the salaries of those who are in high positions of major responsibility. I have in mind particularly Members of Congress who have not received an increase of their salaries for 8 years.

It is our belief that an increase for Congressmen is long overdue. And I say with respect to Members of Congress as well as others in the service of our Government, whose duties are of great consequence to this Nation, that they should be adequately compensated. There is no reason whatever why they should be required to serve for salaries that represent personal sacrifice. I believe that in the executive branch, as well as in the judicial branch, salaries should be sufficient to attract the best men available. Compensation should be maintained at a level which will within reason be comparable to salaries in private enterprise. I am in complete agreement with the substance of the recommendations of the report of the President's Advisory Panel on Federal Salary Systems that

the United States cannot argue that independent means and the honor of office are appropriate substitutes for proper compensation for the positions in which its officers are serving.

We endorse in principle the administration bill, H.R. 7552, sponsored by Mr. Udall, for the provisions which substantially increase the rates in schedule II of the Federal Employees Salary Reform Act of 1962. We cannot, however, accept its ignoring altogether grades GS-1 and 2. Nor can we approve the $10 annual increase for the first rate of GS-3 and the less than $100-a-year increase for the next three rates of that grade. We believe the facts substantiate more than these inadequate increases and the further raises of less than 4 percent below GS-10.

The AFGE endorses H.R. 7814, sponsored by Representative Morrison, and the identical bills introduced by Representatives Olsen, Wallhauser, and Dulski, for their more nearly adequate treatment of the rates in GS-1 to GS-9. That portion of the rate schedule in these bills is more realistic.

Rates in the Udall and Morrison bills are identical in grades GS-10 and GS-11, however, the schedule in the Morrison bill for GS-12 and above is unacceptable in that it reduces the increases recommended by the President and embodied in the Udall bill, H.R. 7552. A comparison of rates in these bills with schedule II is summarized in table 1 in the appendix attached to this statement.

Rates in the first several grades of the Morrison bill are preferable in one other respect: the amount of within-grade increases. The Udall bill continues the step rate of $105, which was the amount in GS-1 and GS-2 prior to the enactment of schedule I and is repeated in schedule II. The Morrison bill increases it to $110.

The amount of the within-grade step rate is important in revising a salary schedule. If maintained in the same amount, each rate in the grade will be increased in the same amount but by a lesser percentage for each rate. If the step rate is reduced, it will produce increases within the grade which are successively smaller in amount and percentage. That is what occurred in grade 5 of schedule I of the Reform Act as compared with the rates in the Salary Act of 1960.

The within-grade step rate was cut from $165 to $160. As a result, thousands of employees in that grade were deprived of the raises they should have received proportional to the grade. The total loss was no less than $2,250,000 for the more than 100,000 employees in grade GS-5 at rate 2 and above.

I would like to refer you at this point to table No. 2, which I have attached to my statement. You will note that in grade 5 out of the total of 1,058,485 employees, we have 127,256 or the third largest number of employees, in any single grade. It is important. How this loss occurred is indicated in the following table:

We can find no justification for reducing the step increase. I might say at this point we have had more complaints from the members of this organization who are in this grade 5 regarding the apparent injustice concerning the step increases than any other one item of the 1962 Salary Reform Act.

This reduction occurred in Schedule I of the Salary Reform Act, was continued in schedule II, and would be perpetuated by the Udall bill. The injustice will not be completely remedied by the Morrison bill. For this reason it is suggested that the step-rate in GS-5 of that bill be further increased from the present $170 to $175 to maintain the percentage increase for each rate as well as the amount of increase. This is particularly important to us due to the fact that in the Salary Reform Act the step increase in grade 5 and in the grade 5 alone was actually decreased and in the administration bill there is no relief for it.

We are dealing with the need for increasing salary rates in schedule II of the Salary Reform Act of 1962. How the 1,058,485 employees compensated according to the general schedule of the Classification

Act were distributed among these grades is indicated in table 2 (appendix). More than one-third the total number were assigned in grades GS-1 to GS-4, and more than 50 percent are accounted for in the first six grades. Seventy-five percent of the employees were below GS-11. With such a large percentage of the employees in grades 1 through 4, I feel that we must find some way-I mean a justifiable way-in order to see that that large group of employees receives some increase by reason of this salary adjustment.

The rates provided in schedule II were based on economic conditions which prevailed in 1961, since the survey data on which they were based were collected largely in the early part of that year. House Document No. 108, 88th Congress, 1st session, containing the President's message of transmittal and the joint annual report to Congress on Federal statutory pay systems, at page 9, stated that the rates in schedule II at grade GS-7 and below "are comparable with private enterprise rates reported by the Bureau of Labor Statistics in 1961."

Rates higher than those in H.R. 7552 will be needed so that they will more nearly reflect the economic conditions which will prevail next January. Rates presently in schedule II were based on BLS wage data in February-March 1961, the average time or point of reference for the wage surveys on which that schedule was based. The average reference point is February for surveys of clerical and technical positions and March for surveys of professional and administrative positions. Nearly another year has gone by since the report in November 1962 of the findings on which the rates in H.R. 7552 were based. This is the timelag which raises the question with respect to achieving comparability by the enactment of the salary schedule in that bill.

Concerning the trend from 1961 to 1962, House Document No. 108, at page 10, has the following comment:

The private enterprise rates included in the 1962 BLS report averaged about 3 percent higher than the private enterprise rates of the 1961 BLS report, and, of course, they exceeded the second schedule rates of the Salary Reform Act for grades GS-8 and above by even greater amounts.

Thus the BLS wage surveys undertaken so far for the purpose of evaluating Federal statutory salaries have indicated that earnings in private industry for positions comparable to those in the Federal service have been advancing at the rate of 3 percent a year. Analysis of data developed in the latest occupational wage surveys of the Bureau of Labor Statistics indicates a continuing upward trend of earnings at the rate of 3 percent a year.

The percentage increase of average earnings for clerical positions in private industry in 32 metropolitan areas from 1961 to 1963 is summarized in table 3 (appendix).

I would like to call to your attention this table. You will note that we have attempted to select points throughout the United States. There is no particular area in which they have been concentrated.

Earnings in 25 of the 32 widely distributed areas exceeded 6 percent. We believe it is a sound conclusion from this tabulation that increases in all grades of the general schedule should be no less than 6 percent to bring them to the level of full and current comparability. The AFGE endorses the principle of comparability. The Salary Reform Act provided a sound salary policy in adopting comparability as the underlying principle of salary determination. It is sincerely

hoped that this policy will be maintained and improved. There is some meaningful improvement needed, largely in applying the industry wage data in the evaluation of Federal salaries.

Our comment on the timelag so far as it relates to wage surveys of the Bureau of Labor Statistics is not to be understood as a criticism of the work of that agency, for it is one of the most objective and dependable in the field of governmental collection of statistics. The problem appears to relate almost entirely to the use of BLS industry wage data in the evaluation of Federal salaries.

It seems apparent, however, that no matter how the BLS occupational wage surveys may be expedited, some lag will still remain. Application of the data also requires their interpretation and translation into a recommended salary schedule by the Civil Service Commission and the Bureau of the Budget. Then must follow the report to the President and consideration of his recommendations by Congress. All this would need to be compressed considerably to bring the entire procedure within a 12-month period.

We believe these surveys should not be unduly accelerated. In view of the circumstances, it is suggested that the three agencies cooperat-. ing in the annual comparison of industrial and governmental rates agree on a projection of the experience adduced by the annual BLS surveys. Such a practice has already been discussed in this committee, and the AFGE endorses the suggestion. It would provide rates having economically current significance. If necessary, these projections could be adjusted if the later survey data indicated the need for such adjustment.

The AFGE analysis of BLS industry data also included examination of average earnings for positions which are typical of the first several grades of the general schedule. We noted the earnings for 4 typical positions in manufacturing industry in 17 metropolitan areas scattered over the country. The earnings for these positions are listed in table 4 (appendix).

The distribution of percentage increases in the 32 areas summarized in table 3 is not uniformly related to size of area nor of geographic region. The same characteristic is evident in the amount of earnings for the four positions stated in table 4.

Clerical positions in large corporations tend to be compensated uniformly. An instance of such practice is the United States Steel Corp. Salaries in the steel company for four typical clerical positions are compared with Federal salaries in table 5 (appendix). These are union rates established by a collective-bargaining agreement with the United Steelworkers of America (AFL-CIO). They are the same at all locations, and are well above the current Federal rates in schedule I and range from 10 to 35 percent above the comparable rates in schedule II of the Salary Reform Act of 1962.

It is also noteworthy that some of the large corporations pay their laborers minimum wage rates which exceed the minimum or entrance rate of grade GS-5. The top rate of $3.17 compares with $3.21, the minimum rate of GS-9. The laborer or minimum plant wage rates for seven well-known corporations are stated in table 6 (appendix). It is of interest to contrast the movement of the compensation of Federal wage board positions and of those under the Classification Act. From the establishment of the Army-Air Force wage board sys

tem in 1943-53, classified employees have fared better on the basis of a comparison of average rates for a wage board and a Classification Act position which may be considered on a comparable level of responsibility. Then, as indicated in table 7 (appendix), the wage board rate moved ahead in 1953 and has remained there.

This comparison also points up the advantage of an annual review of rates of pay. In the last decade, wage board rates have consistently moved ahead, at times in a proportion somewhat below the periodic raises for classified workers. However, the cumulation of the rates for the jobs paid under the two systems indicates the benefit which has accrued to wage board employees from the regularity of their annual

wage surveys.

A decade of experience of wage workers compensated under collective-bargaining agreements also exceeds the cumulated percentage increase of 32.9 percent for classified employees in the Federal service during the same period. The percentage increases for seven large companies since 1953 appear in table 8 (appendix).

I realize that the subject matter of this hearing is confined to the adjustment of salaries. I do wish, however, to make a brief reference to one of the most undesirable provisions of the Salary Reform Act of 1962. That provision is section 701 (a) (b) which established the requirement that an employee's work must be "of an acceptable level of competence as determined by the head of the department" before he may receive a within-grade increase.

This requirement may denote as much or as little as a supervisor desires, and therein lies the basis for our opposition. The change offers every opportunity for discrimination and reprisal, and already the AFGE has had indications that our fears in this regard were not unfounded. Some of the injustice resulting from this requirement in the Reform Act has already come to our attention. I know of one outstanding and deserving case which was adjusted satisfactorily through the good offices of a member of the House Post Office and Civil Service Committee.

The anomaly of this change is that an employee may display the degree of satisfactory performance which will preclude his separation. Yet superimposed over and above a showing of satisfactory performance is this dual and conflicting requirement which has not yet been satisfactorily defined nor fully justified. This requirement was not written into that portion of the 1962 Salary Act relating to the postal service.

Lenthening within-grade waiting periods is another inequity in the 1962 act which needs to be corrected. Classified employees in grades GS-1 to GS-10, inclusive, formerly received each of the first six increases after 52 weeks of satisfactory service, and then the last three at intervals of 3 years each. At grades GS-11 to GS-15, the waiting periods were 78 weeks, the last three longevity steps requiring 3-year intervals. To attain to the first longevity increase, the employee had to spend 10 years in the same position (earlier it was 10 years in the same grade). The Reform Act of 1962 required waiting periods of 52 calendar weeks for advancement to rates 2, 3, and 4; 105 weeks, or