STATEMENT OF LUTHER C. STEWARD-Resumed

Senator LONG. About what percentage of Federal employees do you believe ever reach a supervisory position?

Mr. STEWARD. Well, if you include in supervisory positions, not only those who have some direct and ordinary supervisory authority, but the top scientists and technicians, not to exceed 12 percent, I would say is a close approximation.

Senator LONG. Someone told me that only about 5 percent ever reach a supervisory capacity. Do you know what he might have in mind when he states that number?

Mr. STEWARD. Well, I am getting on down to where you have a file room with one person in nominal charge and two assistants. My estimate for that reason is very liberal.

Senator LONG. If you tried to figure in persons who supervise as many as say 8 or 10 people

Mr. STEWARD. Then you would cut it down very sharply.

Senator LONG. Do you know if it would be to about 5 percent? Mr. STEWARD. Oh, yes, it would be cut down very sharply. Senator LONG. Thank you very much.

All right, Mr. Hallbeck, proceed.

STATEMENT OF E. C. HALLBECK, LEGISLATIVE REPRESENTATIVE OF THE NATIONAL FEDERATION OF POST OFFICE CLERKS

Mr. HALLBECK. My name is E. C. Hallbeck, and I am the legislative representative of the National Federation of Post Office Clerks, representing between 90,000 and 100,000 clerks employed in first-, second-, and third-class post offices.

It is my understanding that this subcommittee is considering all bills relating to increases in salary and amendments to the Reclassification Acts affecting Federal employee and employees in the field service of the Post Office Department.

At the outset, I want to specifically endorse S. 558 which was introduced by Senator Johnston, chairman of the Senate Committee on Post Office and Civil Service, for himself and Senators Langer, O'Conor, and Baldwin. This bill would provide horizontal increases of $650 per annum for all employees in the field service of the Post Office Department with increases of 30 cents per hour for all employees paid on an hourly or part-time basis.

We believe this legislation is readily justified on the basis of increases in the cost of living which have taken place in the past few years. Measured in terms of purchasing power, the wages of post office clerks today, based on the formulas of the Bureau of Labor Statistics of the United State Department of Labor, lack $13.28 per week of being equal to the wage received in 1939.

The average annual salary for post office clerks and supervisors for the fiscal year ending June 30, 1948, was $2,848. Public Law No. 900 of the Eightieth Congress added the sum of $450 per annum, making an average annual salary for post office clerks and supervisors as of today of approximately $3,298. This is equal to $63.42 per week.

According to the Bureau of Labor Statistics of the United States Department of Labor, the average weekly salary multiplied by 0.819

plus $7.31, equals the net spendable weekly earnings after allowance for income and social security taxes for a family of four. $63.42 multiplied by 0.819 equals $51.94, plus $7.31 equals $59.25 as the average net spendable weekly earnings of a post office clerk or supervisor with a family of four.

To adjust present weekly earnings with the same earnings expressed in 1939 dollars, according to the Bureau of Labor Statistics, the current consumers price index is divided by the 1939 index. The consumers price index for March 15, 1949, the latest figure available, was 169.6. The consumers price index for the year 1939 was 99.4. 169.6 divided by 99.4 equals 170.6, the ratio between the consumers price index for March 1949 and the year 1939.

The average net spendable weekly earnings of $59.25 divided by 170.6 equals $34.02, the net spendable weekly earnings of post office clerks and supervisors based on a family of four persons in March of 1949 expressed in 1939 dollars.

The average annual salary of post office clerks and supervisors in 1939 reduced to a weekly basis was $41.63. $41.63 less $34.02 equals the actual dollar difference between 1939 and March 1949, or $7.61 per week or $395.72 per annum. However, to obtain the amount necessary to equal 1939 purchasing power, the sum of $7.61 must be multiplied by the ratio 170.6 which equals $13.28 per week or $690.56 per annum.

This is true despite the fact that the Congress has, in recent years, enacted legislation in an effort to alleviate this condition. In all instances, however, the increases that have been provided have been both too little and too late and, as a result, postal employees have been going further and further into debt with each passing year. Bearing in mind that upward salary adjustments in private industry usually provide for retroactive pay to the end of the last contract, the Federal Government should never lag in protecting its own employees against increasing living costs. Unfortunately, however, it has not worked out that way.

A recent survey in the city of Seattle, Wash., on the financial status of post office employees, indicated the following: 23 percent of all postal employees in Seattle hold part-time positions in addition to their postal employment; 37 percent of the employees have wives who are obliged to work. This indicates that three out of every five postal employees find present wages so inadequate that they are forced to secure additional employment either for themselves or members of their families. Despite this additional employment, 77 percent of the employees have been forced to draw on their savings and 60 percent have cashed war savings bonds, and an additional 45 percent have had to borrow a total of $611,715 during the past year.

Thus, it will be seen that at least 95 percent of the employees of the Seattle post office were forced to supplement their postal wages in one form or another.

I am aware that the Post Office Department has recommended against the enactment of a bill before this committee, S. 558, for a number of reasons, principally due to the estimated cost. I further note that the Department does not now approve further flat increases on the grounds of equity. While failing to approve flat increases, they have not suggested an alternative proposal nor has there been any indication that such an alternative proposal was even being considered.

The Department refers to inequities existent on the effective date of Public Law No. 134 or brought about since its enactment, but in no case do they suggest a remedy for such inequities. However, I fail to note any suggestion on the part of the Department that further increases are not justified. As a matter of fact, the Postmaster General has, on numerous occasions, expressed the thought that present postal wages are inadequate. Speaking before the convention of the National Federation of Post Office Clerks in Miami, Fla., on August 23d of last year, the Postmaster General stated:

The matter of increased salary for the postal people was pending before the Congress for many months. It finally resulted in legislation providing for a $450 per annum increase to regular employees, 25 cents increase to those employees paid on an hourly rate, and a 20-percent increase to all fourth-class postmasters. In my opinion, the salary increases were not sufficient to cope with the increased cost of living.

I mention this subject because there have been some statements made to the effect that neither President Truman nor the Postmaster General were in favor of increased salaries. This, of course, was not true. The President, in his budget message, directed that something be done to decrease the cost of living and he clearly pointed out that if nothing was done to reduce the cost of living, then salaries would have to be increased.

I testified before a committee of the Congress to the effect that I, personally, would prefer, and I feel that every postal employee would likewise prefer, a reduction in the cost of living in the amount of four, five or six hundred dollars per annum rather than a like increase in salary. I pointed out that postal employees got a $400 per annum increase on January 1, 1946, only to see this increase dissipated in the increased cost of living. When you received these increases on July 1, 1945 and January 1, 1946, and had the cost of living been pegged as of those dates, you surely would not have advocated further increased salaries later on. The living costs were not pegged but they increased at a higher rate than the salaries provided and the increase that you received on July 1, 1948 will soon be dissipated unless something is done to stop this increase in the cost of living. It does no good to give you increased salaries in any given amount if the cost of living increases at the same rate. You and I all know that the last increase you obtained was far less than your increased living costs had been since you got your last salary increase.

You will note that the Postmaster General stated, and I repeat, "You and I all know that the last increase you obtained was far less than your increased living costs had been since you got your last salary increase."

Senator LONG. I take it that you do not agree with the Postmaster General, then, that it is better to try to reduce the cost of living than it is to raise the postal salaries.

Mr. HALLBECK. Yes; I do. Had they done that, I would agree with it, but I think, Senator, you will agree that actually the cost of living has not decreased.

Senator LONG. Well, that is true. Do you feel that since it has not decreased

Mr. HALLBECK. If there were ever a time when the postal service were leveled off with the cost of living and then frozen, I think not only I but every postal employee and every man that works for a living would agree to it, but I submit we are in a poor position to agree to something like that when we are down at the bottom and costs are up at the top.

That, as far as we are concerned, is no time to freeze things. We have got to level off before the freeze begins, or we are going to suffer. Senator LONG. Well, now, I realize that a lot of the Post Office personnel feel that the post office is not designed to be a profit-making organization, and I am certainly in accord with that premise providing

we do not accept that to the extent of feeling that that would justify just any conceivable deficit.

I know as a Member of Congress I feel a responsibility if we are going to increase the expense somewhere, to find the money to pay for it, and sooner or later we have to do it. That is why I am inclined to feel that the Postmaster General, in expressing opposition to that bill-and I do not know that he has done so for sure. Are you positive that he opposed that?

Mr. HALLBECK. Yes; I know very definitely. I have seen a copy of a letter on similar legislation on the other side of the Capitol, and I am quite sure he has sent a similar letter to this committee.

Senator LONG. It gives me the impression he feels a responsibility to hold the Post Office deficit within some limits, and I believe that that is what he has in mind in increasing these mail rates.

Mr. HALLBECK. I think that that is true. Incidentally, I might say this: The Postmaster General is a former member of our organization.. As a matter of fact he was a charter member of one of our charter locals, and no one has any greater admiration for Jesse Donaldson than the members of my organization.

We do feel, however, that we have a right to disagree on a theory, and I will bring it out a little bit later, that all improvements in the conditions and wages of postal employees must necessarily be dependent upon whether or not the postal budget is balanced.

I do not think that it is our sole responsibility, and I for one am not willing to agree that we have to wait until the postal budget is balanced before we seek any further improvements.

Senator LONG. Well, I agree with you that if you expect to wait until the postal budget is balanced to get your increase, you will be waiting a long time in all probability.

Mr. HALLBECK. We will be in a very stagnant state, sir.

Senator LONG. However, I am inclined to feel that a partial answer to this problem is an increase in the rates to bring the service in line with what it costs. I realize just from a study of it that the first-class mail is paying its way, but that is, as I understand it, only 10 percent of the weight that a postmaster carries around.

About 90 percent of it is this mail that is not carrying its weight, and it looks to me as though that is one of the few things in this country that has not gone up, the cost of many classes of mail.

Mr. HALLBECK. Well, you say it has not gone up. I can remember when it was 2 cents an ounce, so it has increased at least 50 percent, and that is not too long ago. Actually it has gone up, but certainly postal rates generally have not increased like everything else has increased. There can be no doubt about that.

Senator LONG. That is the impression I got.

Mr. HALLBECK. Whether or not they should increase, sir, is a matter that the Congress itself is ultimately going to have to determine. As a matter of fact there has never yet been a determination by the Congress whether the Post Office Department was necessarily a selfsupporting institution, or whether it was a service arm of the Federal Government.

Now the fact that it takes in revenues cannot be the sole criterion because a lot of other Government departments take in revenues, and those revenues by no means even approximate their expenditures, so they have a deficit, too, if we are going to talk in terms of deficits.

Senator LONG. I am inclined to think that when we speak of the Post Office as being subsidized, that actually we are not subsidizing the Post Office. We are subsidizing the unlimited number of people who are getting something from the Post Office for less than what it costs to provide the service.

Mr. HALLBECK. That is true, sir. Of course, there is another angle. You could, I imagine, prepare a statement of cost and expenditures based on the classes of office and you would probably find the first and possibly the second-class offices pay their own way entirely, whereas third and fourth-class offices universally lost money.

Well, now, certainly neither I nor as far as I know anyone else is going to advocate increasing services in those localities that are served by third- and fourth-class post offices. The service is rendered to the

American people whether they live in the largest city or in the smallest town, and the fact that the revenues in that particular office do not equal the expenditures for postal service is not to my mind a valid reason for discontinuing those services.

Senator LONG. What do you think of the proposal that is being debated on the floor of the Senate at this moment, the proposal to reduce the Post Office budget by a flat 5 percent?

Mr. HALLBECK. This might surprise you. From an experience of almost 29 years in the postal service now, I do not believe that it could possible be worked out. What you said this morning is substantially true.

Approximately 95 percent of the postal expenditure is paid either for transportation or for salaries. Now as far as transportation goes, you know as well as I do that the Post Office Department cannot possibly reduce that. That is a matter for the Interstate Commerce Commission and other quasi-judicial bodies to determine. The Postmaster General has no control over that.

They increase those rates and he cannot help himself except to pay them.

Well, now, as far as salaries are concerned, they are set by the Congress. The theory might be offered that perhaps you could do with fewer employees. Actually the business of the Post Office Department is increasing at such a rate that they are going to have to have more employees.

Just recently in the case of the Railway Express Agency, they quit handling an awful lot of express parcels. All of those came into the postal service, and they cannot be moved without manpower.

Probably more than any other single industry, the Post Office Department is dependent upon the hands and the eyes and the minds of its employees. It is impossible to mechanize it.

If you go through the parcel post section in any large city, I am sure you will see what they mean when they say that a post-office clerk works at manual labor. The filling of sacks, the dragging of sacks, the sorting of mail, is actually hard, laborious work. It is not something that you can say, "Well, we will take 10 men out of here and it will get done," because each package requires handling and it has got to have manpower to handle it.

Senator LONG. The theory being argued on the floor a few minutes ago is if you have 20 attorneys working in an office, you can always do without one of them. Now do you think where you have got 20 postal workers somewhere, you can always get rid of one of them and still get the work done?