Summary of new positions requested-Continued ACTIVITY 1. COLLECTION, ANALYSIS AND PUBLICATION OF LABOR AND ECONOMIC STATISTICS-Continued (E) MEASUREMENT OF PRODUCTIVITY-continued Field: 7 GS-7 field representative__ Total permanent, field__‒‒‒ Portion of machine tabulation allocated to activity 1(e): 1 GS-3 machine operator_--- $34, 944 34, 944 3,515 Portion of machine tabulation allocated to activity 1(f): 5, 990 4, 056 15, 080 25, 106 "For expenses necessary to enable the Bureau of Labor Statistics to revise the Consumer Price Index, including temporary employees at rates to be fixed by the Secretary of Labor without regard to the civil service laws and Classification Act of 1949, as amended, services as authorized by section 15 of the Act of August 2, 1946 (5 U.S.C. 55a), $230,000, to remain available until June 30, 1964." Program increase item: Revision of the Consumer Price Index (35 positions, $196,970, nonlabor $33,030) – Net change.... Summary of new positions requested $230,000 230,000 +230,000 +230,000 Activity 1. Collection, analysis, and publication of labor and economic statistics Senator HILL. We will have the Bureau of Labor Statistics, Mr. Clague. Do you have a prepared statement, Mr. Clague? Mr. CLAGUE. Mr. Chairman, I do have a prepared statement which I shall be glad to submit for the record. Senator HILL. We will have that appear in full in the record. (The statement referred to follows:) STATEMENT OF EWAN CLAGUE, COMMISSIONER OF LABOR STATISTICS The budget estimate for the regular program of the Bureau of Labor Statistics For fiscal 1960 is $9,465,000. In addition, a separate statement is being subted recommending the revision of the Consumer Price Index (CPI) upon the asis of new studies of consumer expenditures. I should like to state at the outset that approximately three-quarters of the crease, or $1.080,000, reflects the result of administrative arrangements to ransfer responsibility for the Monthly Report on the Labor Force, which profaces the Government's basic labor force, employment and unemployment data, m the Bureau of the Census of the Department of Commerce, to the BLS. Thas, this is not a true increase; the Bureau of the Census estimates reflect a eduction of like amount. The following increases are mandatory items because they cover costs over Thich the BLS has no control: Derease in postal rates.. Extra day of pay in 1960___. $45, 000 22,000 Increases in State employee salary rates under the cooperative Federal- 24,000 215,000 37,500 Beyond this, the requested increase is to conduct statistical studies of labor irements ($158,000); to improve the pricing underlying the Consumer Price lodex (CPI) ($215,000); and for adding Alaska to the employment and indusTial relations programs. MONTHLY REPORT ON THE LABOR FORCE The apparent increases related to the monthly report on the labor force grow at of an agreement between the Secretary of Labor and the Secretary of Comberce placing responsibility for this program in the BLS. Under this new arrangement, if approved by appropriation action, the Department of Labor will he responsible for the overall labor force, employment and unemployment data for the economy as a whole. In addition, of course, the Department will also continue its established responsibility for current data on employment by indusy and locality, and insured unemployment. At the present time, some of the Government's data are the responsibility of the Department of Labor and some the responsibility of the Department of Commerce. The new system should imrove the effectiveness of the Government's statistics on employment and unemployment and produce improvements in our analyses and understanding of these subjects. Under the new arrangement, the BLS will have the full responsibility for Trogram direction, planning, analysis, and publication of the monthly data on bor force, employment and unemployment, but will contract with the Census Bureau for the collection and tabulation of the material upon which the reports are based. The total of $1,080,000 in the request includes $980,000 to be transferred to the Census Bureau for its role in the program as an agent of the BLS. CONSTRUCTION STATISTICS PROGRAM The Secretaries of Commerce and Labor have also agreed on steps which would consolidate in one agency the Government's construction statistics programs formerly carried on in these agencies. Here too, at the present time, the responsibilities are divided between the two departments. The agreement, to be effective in fiscal 1960, if approved by appropriation action, would consolidate the responsibility for construction statistics in the Department of Commerce. This will involve the transfer of a major part of the Bureau's present construction activity to the Department of Commerce and a decrease of $352,000 in the Bureau's basic appropriation. 41001-597 LABOR REQUIREMENT In connection with this agreement to concentrate the Government's construction statistics in the Department of Commerce, it has been agreed that the BLS shall continue to have responsibility for employment statistics for the construction industry and for statistics on construction and other labor requirements. The last surveys of labor requirements were made over a decade ago, covered only the construction industry, and are virtually useless for present purposes. During recent years, the lack of these data have been particularly notable, especially in connection with efforts to estimate the employment effects of Government and private construction programs. The Bureau has been asked repeatedly for estimates of the employment effects of particular programs and has been able to supply little or no information. Last year, during the recession, the Bureau was unable to estimate the employment-creating effects of public works programs for the administration and was not able to give adequate information to the chairman of the Senate Appropriations Committee in response to his request for similar data to evaluate hospital building projects then under consideration. To remedy this deficiency, the request includes an increase of $158,000 to conduct statistical studies of labor requirements on a continuing basis. INCREASES IN STATE SALARY RATES The proposed increase in the funds for transfer to the States is in recognition of the necessity to make regular provision for State statutory salary increases affecting the joint Federal-State employment and manpower program. This will help to assure continued satisfactory performance by the participating States. RECLASSIFICATION TO NEW STANDARD INDUSTRIAL CLASSIFICATION Changes in the organization and structure of industry have required periodic changes in the classification structure which the Government uses to classify its data. The Government statistical agencies, at both Federal and State levels, are now in process of adopting a revised standard industrial classification system. The new system was prepared by the cooperative efforts of Federal statistical agencies, under the leadership of the Bureau of the Budget. The new code system will be used for the 1958 Census of Manufactures and has already been installed by the State unemployment compensation agencies. Comparability with these data is essential. In the case of the Bureau of Labor Statistics, this conversion will affect two programs: the employment, hours, and earnings series, and the work-injury statistics. The cooperating States involved in employment and earnings statistics are now completing their part of the work. The Federal task, which involves code revision, very extensive retabulations, checking, and estimating, is still to be done. Reclassified data on employment, hours, and earnings will be completed in fiscal 1960. In the case of the work-injury data, it will be more efficient to do this work over a 2-year period; the current request is for the first of these 2 years. COVERAGE OF ALASKA Statehood for Alaska makes it necessary to include it in statistical programs of the BLS in the same way that other States are represented. This involves both the question of adding data for Alaska to data for the other 48 States in arriving at totals for the United States, and the question of providing separate data for Alaska where separate State data are now provided for the other States. A general review of this problem has been made throughout the Government, and we are requesting funds to advance national data to include Alaska in two areas of the Bureau's program. It is recommended that funds be appropriated— (a) To bring Alaska into the cooperative employment statistics program; and (b) To preserve the nationwide character of our strike statistics and our information on major labor-management contracts and collective bargaining settlements. The proposed program of consumer expenditure surveys for revision of the CPI will provide a basis for a national index based upon consumer expenditures for the United States as a whole. PRICING PROGRAM FOR THE CONSUMER PRICE INDEX Our continuing review of the way in which we collect prices for the Consumer Price Index has led us to a number of conclusions, all of which point to the need for collecting more price quotations: First, the list of 300 commodities and services now priced for the index has remained virtually unchanged for the past decade. In the meantime the number and variety of goods available in the consumer market has increased greatly. We can no longer rely on that small group of items to reflect price trends. Second, the creation of new kinds of stores-discount houses and suburban stores has resulted in a sizable expansion in the numbers of sources from which consumers buy. Since price trends in these outlets are not uniformly reflected by price trends of large department stores and shops in the central cities, it is important that the new outlets be included in the pricing program. Third, there is greater month-to-month change in the prices of many commodities than was the case several years ago. At present the Bureau collects prices monthly in all the 46 Consumer Price Index cities only for food and fuels. Most other commodities are priced monthly only in 5 cities. These commodities are priced in the remaining cities only once a quarter. This is done on a rotating basis under which approximately 15 quarterly cities are included each month. There is a growing possibility that month-to-month changes in the cities surveyed may exaggerate the changes for the country as a whole. More of the CPI cities should be included in the regular monthly surveys. The combined results of these findings all point to the need for more pricing. We have been able to make some improvements with the funds that the Congress has granted in recent years, but the size of the problem has become so great that much more must be done. The proposed increase in expenditures would permit approximately a one-fifth increase in the total number of price quotations collected. This addition is considered necessary in order to institute and maintain improvements needed immediately to assure the continued accuracy of the index. It is our technical judgment that these changes in pricing should be made at the earliest opportunity. They will enable us to continue to produce an index which measures up to the standards of accuracy that are required for the uses to which it is put. I have referred to these uses in prior appearances before the committee. One effect of the index that has come to my attention in recent months is one which I am sure will interest the committee. Each increase in the index of one index point results in an increased Government expenditure of approximately $22 million a year, as a result of wage increases on Government contract work which are reimbursed by the Government as a cost of production. The expansion in the current index coverage is separate and distinct from the problem of revising the entire index as patterns of consumer expenditure change. A separate request provides for basic revision of the CPI and the expenditure surveys necessary for that revision. MANDATORY ITEMS Mr. CLAGUE. I think if you can give me 5 minutes I can summarize very briefly the general picture of my Bureau. Senator HILL. I notice there is quite an increase, in fact, the Secretary addressed himself to this this morning. We will be happy to have you summarize it any way you wish, sir. Mr. CLAGUE. Thank you, Mr. Chairman. I would like to summarize the four regular major items of the Bureau and the special appropriation as a separate one. First, we have a series of mandatory items. We have the small item for postage, extra day's pay, and so on, and we have a larger one which is the standard industrial classification. That is the reclassification of many of the firms of the country into new industry groups. This has been done by the Bureau of the Census, by the State agencies that cooperate with us. Our Bureau is scheduled to do this next year. |