As a matter of fact, in terms of salary, half of the employees get less than $2,874 and half get more than $2,874. That is the middle point at which the group splits. GS-9 under this schedule would pay a minimum of $4,600. According to our present distribution figures, 85 percent of the employees would be below $4,600; 15 percent above. So the great bulk would be below the GS-9 level.

Senator LONG. That is right. In other words, they are GS-1 through 8.

Mr. BARUCH. That is right, sir, and almost all of the employees in CPC would be below the pay level for GS-9.

Senator LONG. Out of the aggregate amount of increases, it would appear to me that starting at GS-9 and coming forward, that is the area where most of the amount of increase takes place.

Mr. BARUCH. That is right, sir, because that is where the lesser part of the increases took place between 1945 and 1948.

Senator LONG. Let me see if I understand the logic of this now. Your position is that these lower-paid employees have been pretty well taken care of now, that their salaries are pretty much in line with what they ought to have. I notice their increases vary anywhere from an average in the lowest, you might say, $1.72, to the highest of $96.60.

Mr. BARUCH. That is right, in grades GS-1 to 8.

Senator LONG. Yes. Those average fairly low, it would appear to me. Is the theory of that that these people are being pretty well paid the way it is now, is that the idea?

Mr. BARUCH. No, sir; the Commission has not taken that position. The Commission's position is that this is not a cost-of-living-increase bill. Mr. Winslow can probably testify more reliably than I can on the attitude of the administration on this point; but my understanding is that the administration's viewpoint is that any increase which is to recognize the change in the cost of living since 1939, or any other date, should, so far as Classification Act employees are concerned, be worked into this bill. In that way we would get both whatever the committee regarded as a fair increase for both lower-paid and higherpaid employees, and also the very desirable administrative contribution which the committee could make, namely, a complete revision of the Classification Act and its operating provisions.

Senator FLANDERS. This is primarily a revision proposal that you are presenting?

Mr. BARUCH. Yes, sir. If I may offer a suggestion, this would be the basic structure for the committee to consider in deciding what other pay scales might be more appropriate.

Senator LONG. I see. Let us see if I understand you further. Your idea would be, then, that if this committee was to attempt to make some cost-of-living adjustment, that the adjustment

Mr. BARUCH. Within the structure.

Senator LONG. You should first get this structure into effect where each person, to your way of looking at it, would be getting proportionately what you thought they should receive and from that point forward you should proceed to spread over the whole group. But that in effect, each pay scale, and each pay scale getting their proportional increase instead of one group getting, let's say, a 30-percent increase, and another group getting a 3-percent increase. You feel

they should all get maybe a 20-percent increase, for example, so as to spread it?

Senator FLANDERS. This salary scale, where the upper end of it is not so much a cost-of-living thing, but a matter of competition in getting the desired talent, while at the lower end it is a cost-of-living thing

Mr. BARUCH. I think that is right, Senator. The situation is, and of course you are very familiar with that, that it is difficult to both secure initially and to retain after you do secure them, the very best, talent in the very highest professional and scientific and administrative jobs in the Government service.

We could enter into a discussion about what the cost-of-living index really means and what its applicability really is to the higher brackets. We would find, although the Bureau of Labor Statistics is very much better qualified than I am to discuss this, that the cost-of-living index, which is now termed the consumers' price index, is based on the prices of goods and services purchased by moderate-income families in large cities of the United States. The budget which BLS uses to price goods and commodities does not reflect equally well the lower brackets, the middle brackets, and the higher brackets. Just one illustration. The cost of food is a very much higher percentage of the budget of the low income or moderate-income family than of the budget of a higher income family. After all, there is a limit to the amount of food we can eat. So that it has always been questionable whether we can logically use the consumer's price index as the principal basis for increasing rates of pay in the higher brackets. If such rates are to be increased, the principal basis should be administrative.

Senator FLANDERS. I want to ask one other elementary question. You have been speaking about GS grades. Now, are these the new grades you are applying the term GS to?

Mr. BARUCH. That is right. In this general schedule at the top of the page.

Senator FLANDERS. You use one alphabetical designation for grades?

Mr. BARUCH. That is the CPC.

Senator FLANDERS. What is the CPC?

Mr. BARUCH. Crafts, protective, and custodial. That is shown on the table, the multilithed table No. 2, Senator Flanders. That shows the same kind of information as is on table 1 for the GS service. Senator FLANDERS. Are these grades, here on the summary table, CPC? Are they the GS grades?

Mr. BARUCH. They are the same as the grades of the crafts, protective, and custodial service in existing law.

Senator FLANDERS. On this second table, they appear to be identically numbered.

Mr. BARUCH. Yes. Well, the first column should be, proposed grade CPC, dash. That CPC symbol should apply all the way down

the first column.

Senator FLANDERS. But the proposed grades are the same as these GS grades?

Mr. BARUCH. No, sir; they are in a separate schedule on page 30 of the bill.

Senator FLANDERS. I am getting a little mixed up. I presume I ought not to be. I thought the GS grades would supersede everything else.

Mr. BARUCH. Professional and scientific, the subprofessionsl and the CAF. The crafts, protective, and custodial schedule is separate. Senator FLANDERS. I get it now. These are the ones that relate to prevailing

Mr. BARUCH. The reason why it has been suggested and incorporrated in the bill that the crafts, protective, and custodial positions should be continued in a separate schedule in this: The great bulk of those positions are in crafts and trades and labor employments. In general character, they are the same as about 500,000 other crafts, trades and labor positions whose wages are fixed not by statute but under wage board procedures with reference to prevailing rates.

Senator FLANDERS. I was familiar with these two things but the discussion we were having on this summary table led me to believe that it related to the whole show, but it does not; it relates to CPC. Mr. BARUCH. We have one summary table for the GS and one summary for CPC, but the general tone of the two schedules is the same, that is, at the bottom the increase is small; they get larger as you go toward the top and the largest increases are at the very top.

A question was raised a moment ago about the four new grades. I would like to go over just briefly the reasoning which would support two or three or four new grades at the top of the present Classification Act structure.

To begin with, by other provisions of the bill, in title V, no position can be placed in new grade GS-16, GS-17, or GS-18 except by prior approval of the Civil Service Commission and no position can be placed in grade 19 except by approval of the President. That $16,000 rate, I might say in passing, is keyed to S. 498, the top bracket salary bill which has been reported to the Senate by this committee. Depending on the fate of S. 498 in the Senate and the corresponding bill, H. R. 1689 in the House, the top figure of this bill may remain or may have to be changed.

Senator LONG. In other words, your thought was that this classification bill would go up to the point where the top pay bill began and your feeling is if the top-pay bill is reduced this ought to be correspondingly reduced, on down the line.

Mr. BARUCH. Yes, sir; because it would be about as confusing as it is now, if the Classification Act ceiling would be higher than the top bracket floor. Some of us in the Civil Service Commission and other people in other agencies get $330 more than their Presidential appointee bosses, which is embarrassing, to say the least. Senator FLANDERS. It is intended to be.

Mr. BARUCH. Well, at any rate, the first point I want to make is that the use of these top four grades, GS-16, 17, 18, and 19 under the bill would be very closely controlled, in about the same manner as the range of $10,000 to $15,000 that we spoke of a moment ago under Public Law 313 is controlled by the Civil Service Commission.

There are two aspects to these grades: first, irrespective of rates of pay, we have found that due to the increasing complexity of the Government since the time these schedules were first constructed and the grades determined, there are not quite enough grades at the top of the schedule of the Classification Act, to recognize the differences in responsibility among the various positions that you strike in an organization. If you had a simple organization with a head and an assistant head and everybody spreading out below in sort of a pyramid. or cabinet form, the original construction of the Classification Act

would probably suffice. But organizations have become so complex now that we just haven't got enough grades to recognize the differences in duties and responsibilities among the positions at the very top. The result is that the departments and the Commission squeeze into the same grades, the positions that are materially different in difficulty and responsibility.

So, from purely a position classification or job evaluation standpoint, it would help administration to have two, three or four grades added to the top of the Classification Act.

Senator LONG. While we are on that subject, I wondered if you did have some idea or some recommendation in the event that this committee should consider a proposal, which I know will be made to boost the pay scale generally, how would you feel that any general increase should be made in the event, let us say, that we increase about over-all $200,000,000 or something to that effect. How would you feel it should be distributed?

Mr. BARUCH. This is just a quick reaction, Mr. Chairman, without having given it much thought. If a total cost figure were given as a limitation, which is one of the usual things, I would suggest that a percentage figure be worked out which could be applied to the entire schedule all the way from the top to the bottom, so as to produce that additional cost. That takes some experimentation.

Senator FLANDERS. Would you, for instance, apply that percentage to the $16,000?

Mr. BARUCH. No, sir. I would taper that off.

Senator FLANDERS. I am thinking of the heavier incidence which you just mentioned and which we will get some information from the Bureau of Labor Statistics, whether we should not again apply somewhat higher percentages at the bottom and taper off those positions to zero at the top.

Mr. BARUCH. That is contracting your telescope again.

Senator FLANDERS. Yes, but if we satisfactorily provide for these top positions, it would seem as though we ought to begin to taper off as we approach them.

Mr. BARUCH. The violence of the telescoping would depend, of course, on the amount of percentage, but as you indicated, Senator Flanders, there are many things which should be taken into consideration in fixing rates of pay for the upper brackets which do not apply in the lower brackets. It has been said over and over again that the Government, for example, should pay some attention to prevailing rate levels in private industry when it fixes pay scales, and to costof-living changes. But everybody knows that it would be futile for the United States to attempt to compete with large corporations in private industry for executive personnel.

Senator FLANDERS. A good man has to make sacrifice to go with the Government and that is the way it should be.

Mr. BARUCH. The point of view which the Commission has taken all along is that that sacrifice should not be so great as to be an injustice to the man and an injustice to his family also. His salary should be a sufficient remuneration which, when taken in connection with all the other advantages of Government employment, including the prestige value which Government service has especially in the upper brackets, will be sufficient to influence him to come into the Government in the first place and stay in the Government afterward.

That is as far as I think we can go toward recognizing economic factors in setting scales in the higher brackets.

Senator LONG. How do you think that pay in the lower brackets compares with those under this bill; how do you think it will compare with private industry-the pay in private industry for the same kind of work?

Mr. BARUCH. We have never made any comprehensive survey in the Civil Service Commission, but from figures which have been published in industrial magazines from time to time, we believe that generally speaking the rates in the lower brackets compare pretty well with the rates for comparable positions in private industry. there you will find instances where the rates in Government are lower. For example, we have difficulty at the moment in some metropolitan centers in recruiting in our lowest grade for hearing reporters. That is just one illustration indicating that the market rate, at least for that class in that locality, is higher than the entrance rate possible under the Classification Act.

Senator FLANDERS. Does that come under CAF?

Mr. BARUCH. CAF-6.

We have a provision in the bill, section 803, which would permit us to take care of a temporary situation of that kind without altering the rates of the schedule.

Senator LONG. The Government, generally speaking, has probably more holidays and holiday provisions, do they not, and more leave provisions?

Mr. BARUCH. Leave and retirement privileges as a general rule are more liberal than in most private employment.

Senator FLANDERS. You have fewer 3- and 4-day weeks than you have in industry at the present time.

Mr. BARUCH. Yes, our 5-day week practice in the Federal service is relatively new. In that respect the Federal service came along behind industry. The white-collar group in the Federal service were put on a 5-day week many years after that standard was established for the blue-collar workers of the Federal Government. But there are many privileges and perquisites of working for the Government in these higher brackets that compensate somewhat for not paying fifty or sixty or seventy-five thousand dollars a year, such as a private corporation might pay to a general manager.

At the same time, the Government ought to pay enough so that we would not force people at these higher levels to consider their economic situation in terms of income as outweighing all other factors. It should be sufficient to give each one of them a comfortable living according to his standard at that level.

As

Now, it is interesting to note that the ceiling of the Classification Act has been raised over the years. We do not have a situation in which the ceiling has remained absolutely static for 25 years. a matter of fact, if I may give these figures, in 1923 when the Classification Act was first enacted, the ceiling was $7,500. In 1928, it was raised to $9,000; in 1945 to $9,800; in 1946 to $10,000; and in 1948 to $10,330. So that over a period of 25 years or so the ceiling has been raised from $7,500 to $10,330 under this act.

Senator LONG. Let me ask you as you go along this line, too. Now, then, to my mind, when I am thinking about what we can pay these employees, it occurs to me that you have to think in terms of