The loss in real income may be seen in the accompanying table, which compares Federal salaries as they will stand on January 1, 1964, with the salary required to restore the purchasing power of 1939 salaries in the same grades.

Federal salaries up through grades GS-5 provide the same or greater purchasing power to their recipients than did 1939 salaries in the same grade. This is as it should be in a growing and increasingly affluent economy. Indeed, we should expect not just maintenance of purchasing power, but a substantial growth in real income since before World War II. However, Federal salaries in grades GS-6 and up offer less buying power today than 25 years ago, and the lag becomes steadily more pronounced as the GS grade increases. A beginning GS-9 today can buy with his salary 11 percent less goods and services than he could have 25 years ago. At grade 13, the loss is 21 percent; at grade 15, 32 percent.

The members of OPEDA are in grades GS-5 and up. This table indicates the extent to which the economic position of this group has deteriorated since pre-World War II. We say as a group because many individuals have received grade promotions and step increases which offset in varying degrees the rise in living costs and taxes.

Another way to examine what has happened is to consider the question from the standpoint of compression of salary differences between the various grades. Since 1939 there has been a compression of the differences in salary between the higher and the lower grades.

In 1939 the beginning salary of a grade 15 was 393 percent above the beginning salary of a grade 3. By 1949 the percentage had declined to 277. Under the salary levels now in effect the grade 15 beginning salary is 281 percent above the beginning salary of a grade 3. The increases scheduled for next January 1 will increase this percentage to 303.

In other words, the beginning salary of a grade 3 will have increased, by next January 1, to 140 percent above the level in effect in 1939 compared to an increase of 96 percent for the grade 15. Had the salary of grades 13, 14, and 15 been increased by as much as the average of the increases for grades 3 through 12 by next January 1, the beginning salaries for these three grades would be $819, $945, and $2,255 higher, respectively. Also, in 1939 the beginning salary of a grade 15 was 23 percent above the beginning salary of a grade 14; by next January this difference will be 15 percent. The difference will be only 3, 12, and 11 percent under present legislation for grades 16, 17, and 18, respectively. This compares to differences in the vicinity of 20 percent for promotion from 5 to 7,7 to 9, 9 to 11, and 11 to 12.

It is also interesting to compare the differences between the beginning salary and the top longevity salary in each grade. For the grades below grade 15, the differences on January 1, 1964, will range from 26 to 31 percent. But under present legislation the differences for grades 15, 16, and 17 will be 23, 12, and 11 percent, respectively. Of course, under existing legislation the grade 18 is not privileged to receive any "in-grades" or longevities.

As I stated earlier, the OPEDA reiterates its support of the concept of comparability in civil service salaries to salary levels being paid in private industry. However, OPEDA believes this concept of comparability should be applied effectively and currently to all classified

grade levels. The OPEDA believes there is not a reasonable basis for perpetuating disparities between grades, such as those mentioned earlier. Occupants of higher grades should have available to them the prospect of worthwhile increments in salary within their grades. The grade 18 should receive in-grades and longevities on a basis comparable to other higher graded positions. Also, there should be enough salary difference between the higher grades so that after serving in a grade for 5 to 10 years, and an employee is promoted, the increase in financial return will be more realistic in relation to the demands of the higher graded position.

It is within the higher graded positions that Government policy is hammered out. Also, these positions represent key levels of administering the programs of the Government. The occupants of these positions represent years of specialized training and experience. It is essential that these positions attract, and retain, the most competent scientists and administrators available. For that reason the OPEDA believes there should be no reluctance in making suitable adjustments in salary levels for higher graded classified positions.

Civil service salaries, 1939, and Jan. 1, 1964, and increases to restore 1939 buying power

1 Takes into account rise in Consumer Price Index from 1939 to June 1963 and increase in Federal income tax. Tax is calculated using reduced rate schedule voted by the House Ways and Means Committee in August 1963, and is based on married couple with two dependents and no other income and assumes deductions of 10 percent of total income. Direct effect of increases in State and other taxes not considered.

NOTE.-Allowing for changes in cost of living and Federal income taxes, the present equivalent of a prewar salary of $9,000 is $23,566. Equivalent of a prewar salary of $10,000 is $26,246.

Mr. OLSEN. I want to compliment Mr. Lasseter on the statement, and particularly on the schedule attached to the statement. It is of real value to have dollars and cents figures in front of you when you are considering a pay bill.

Mr. LASSETER. I think that is important. Thank you.

Mr. MURRAY. This concludes the list of witnesses who were scheduled to appear this morning. The next session will be held on this legislation on next Tuesday morning, 10 o'clock.

Mr. OLSEN. I would like to interrupt a minute.

I have only missed two of these sessions when we started and then because I had to be in the Public Works Subcommittee. I have observed our chairman has been most diligent and most patient and for my part, and for several on the committee that I have spoken to, I want to commend the chairman on his great devotion to duty and his great patience. You have my admiration and that of all the

members.

Mr. MURRAY. The meeting will stand adjourned.

(Whereupon, at 11:45 p.m., the committee adjourned, to reconvene Tuesday, September 24, 1963, at 10 a.m.)

FEDERAL EMPLOYEES SALARY ACT OF 1963

TUESDAY, SEPTEMBER 24, 1963

HOUSE OF REPRESENTATIVES,

COMMITTEE ON POST OFFICE AND CIVIL SERVICE,

Washington, D.C.

The committee met at 10 a.m., in room 215, Cannon House Office Building, Hon. Tom Murray (chairman) presiding,

The CHAIRMAN. The committee will come to order. The hearings will be resumed on pay legislation.

The first witness this morning is our colleague and former able member of this committee, the Honorable George Miller of California. We are glad to welcome you here, Mr. Miller.

STATEMENT OF HON. GEORGE P. MILLER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA

Mr. MILLER. I am always happy to come down here. It seems unrealistic that I should sit on this side of the table and face you. For so many years I occupied Mr. Dulski's chair.

Mr. Chairman, I do not have a prepared statement. I just returned from California. Some of the things that have been transpiring recently have kept me extremely busy. I want to come here and by my presence indicate my support of pay legislation. I feel it is long overdue.

As chairman of the Science and Astronautic Committee of the House, I am brought into contact with eminent scientists throughout the country, eminent scientists in Government, and there are people who are making the great contribution in this field in Government who are doing it at a great financial sacrifice, and we should not ask them to continue these sacrifices when they can step out into industry and better themselves materially.

The CHAIRMAN. Are you referring to all Federal employees?
Mr. MILLER. I am referring to all Federal employees.

The CHAIRMAN. Do you not think Congress has been rather liberal in the past with its treatment of Federal employees?

Mr. MILLER. I can tell you, Mr. Chairman, just recently we tried to get a man to come to work for my committee. He was very much interested in our work, but he said, "I cannot go to work for you. I am making $40,000 a year. You are offering me the top that you can offer me, $18,000."

We need that $40,000-a-year man.

The CHAIRMAN. Is that not an exception to the general rule? Mr. MILLER. No, I do not think it is, Mr. Chairman. I think the political subdivisions in my State have had to raise the salaries of their people and are continuing to raise them.

The Legislature of California gave all the State employees increases. Municipal and county employees have received pay raises. The wage scales of the country are going up. If we are going to retain good people who will do good jobs, we have to meet the competition that is on the outside. I feel it is economy to do this. I am conscious also of the non-white-collar employees that need adjustment, the postal employees and others.

I just want to lend my effort and show by my presence here that I subscribe to this theory and urge favorable consideration by this committee of a pay raise for Federal employees. I know the committee will be generous with them and do what it has always donework out the best position it can for these people.

The CHAIRMAN. Thank you.

Mr. DULSKI. I welcome my good friend from California, Mr. Miller.

I have a question. I happened to visit NASA. I think there is a category we should divide. That is a specialized field.

Do you think we should have special grades for scientific people? Do you not think we need people in that category in a specialized field?

Take a scientist. He is only one individual. You have to be competitive in that field. Would you be agreeable for having a specialized class for these individuals?

Mr. MILLER. I do not know. I have never given that too much consideration. Today this field of science and technology does require consideration, and perhaps someone should take a look at it. am conscious also that all who serve the Government are worthy of consideration for pay increases.

With respect to these particular people in NASA and other places, I do not have to tell you we have had to go to the nonprofit organizations with which we contract to do a lot of this specialized work because we can contract with these nonprofit organizations and they can pay salaries comparable with private industry. We say, well, this is private industry being hired by the Government to do certain jobs when it is just a fiction. These people are being paid with the taxpayers' money, and it is just a fiction to get away from the civil service laws and to get away from our own control over them. Perhaps if we took a good hard look at this matter, we would quit kidding ourselves and the American taxpayers that we are doing something in the line of private industry when it is not private at all. These groups are specially set up in order to circumvent the civil service laws.

Mr. DULSKI. Thank you very much.

Mr. OLSEN. I want to thank Mr. Miller for coming before the committee with his very valuable testimony and with his very knowledgeable views. I share the gentleman's views most strongly. Thanks again.

The CHAIRMAN. Thank you very much.

Mr. Nix. I would like to say, Mr. Miller, when you mention the difficulty experienced by your State in securing competent people, you mentioned the same problem we have in Pennsylvania in education and public health and in every specialized field. We find great difficulty in securing people of competence to fill those positions because they are going into private industry.