On January 14, 1971, Assistant Secretary of the Army, Benton G. Moeller, Jr., wrote me a letter in which the following paragraph, which speaks clearly for itself, is included:

Contract is the Army's preferred method for obtaining custodial services and it is used predominately. At Army installations, custodial service is a function of the Facilities Engineer. The performance of this service by contract is under the supervision of the facilities engineer and the General Services Administration is not involved.

On February 8, 1971, I received a letter from the Assistant Secretary of the Navy, James D. Little, saying in effect the same thing in the following words:

Attached for your consideration is a discussion paper which explains our policy on the "contracting out of support services" by the naval shipyard.

As you will note in the discussion paper, periodic reviews are conducted to ensure that it is still in the best interest of the government to continue contracting out a particular service. . .

As to the current and future impact on blue collar Federal employees of these Department of Defense policies, I should like to insert the following report which appeared in the Birmingham Post-Herald, March 11, 1971, about cutbacks of 1,300 military support personnel at Craig Air Force Base in Selma, Ala. Among other passages, the report includes the following:

The Air Force said it would make every effort to provide placement for those who are losing civilian jobs. They said many would possibly be hired by the contractor ***

One civilian employee, who might be in a position of being without a job or working for a contractor, said that they would lose all civil service ranking, even if hired by the contractor.

Their same job with the contractor would probably be at a much lower rate of pay, resulting in a lower per capita payroll for any of those who are retained by contractors, the employee said ****

The cutback involves about half of the work force at Craig.

That is not all they lost, Mr. Chairman. They will not only lose a decent living wage, they will lose whatever civil service retirement rights, the health benefits, the insurance rights, and all of those things that you and I and some of the rest of them have, that you have got for these employees over a number of years.

Maybe the contractor will have a pension plan. You and I know what happens to the pension plan when the contract goes out. What about veterans' benefits?

That is meaningless in these contracting situations.

Now I will not offer this summary. I know Mr. Ryan might have a few words to say. What I have said in this summary is more or less what I tried to explain this morning.

The CHAIRMAN. Your full summary will appear intact along with your remarks, so they will not be lost. That will be inserted at this point in the record.

(The statement follows:)

SUMMARY AND CONCLUSION

As I have demonstrated repeatedly in my testimony, blue collar employees desperately need legislation, providing an impartial neutral Chairman at the top and establishing a legal mechanism which can be invoked automatically to resolve differences of honest judgment as well as eliminate factual errors.

The great merit of the wage board bills before you is that they will bring equity to wage board and non-appropriated fund employees in an orderly, constructive

manner, relying on the positive experiences of the past. These Bills definitely are not going to introduce radical or untried concepts into the Federal service.

Proof of this lies in comparing the provisions of these Bills with the provisions of Chapter 532-1 of the Federal Personnel Manual of January 10, 1968, which governs Wage Board employees. Basically a good many of the same kinds of techniques, procedures and modalities of inter-agency cooperation envisaged in these Bills already exist in current regulation.

Where then do the main differences exist? And what are they?

Besides the fact that these Bills give a statutory basis for fixing and adjusting the rates of compensation of wage board employees, the main specific differences concern the following:

1. The composition and role of the National Wage Policy Committee; with a neutral chairman;

2. The inclusion of employees of non-appropriated funds in the wage board system;

3. A statutory provision for the cooperation of private enterprises having government contracts in the conduct of the local wage surveys;

4. The introduction of a ten-step Wage Rate Schedule;

5. The provision of equitable overtime, shift differential and travel time pay;

6. The provision of a five-day workweek with two consecutive days off. These differences summarized under those six clauses, contain the gauge and measure between a modern, equitable wage grade system and the one we have today. In concluding, I earnestly ask you to enact all of them into law.

Mr. GRINER. I want to express my appreciation to you, Mr. Chairman, and members of the committee for the opportunity of appearing before you this morning, and I too hope we can get some early resolution of this wage board situation. It is deplorable. [Applause and standing ovation.]

(The following correspondence was subsequently supplied for the record:)

Hon. ROBERT E. HAMPTON,

Chairman, U.S. Civil Service Commission,
Washington, D.C.

MARCH 30, 1971.

DEAR BOB: In his testimony before the Committee on Post Office and Civil Service on wage board legislation yesterday, AFGE President John Griner stated that 71,845 blue collar employees were dismissed from the Federal service during the period July, 1969 through July, 1970 (page 3 of his prepared testimony).

This figure seems unusual. I would appreciate your advising me whether the rate of dismissal was this high or if other factors contributed to the decline in employee population.

Hearings on wage board legislation will be resumed after the Easter recess at which time I will ask you to testify. Kind regards. Sincerely,

Hon. GALE MCGEE,

GALE MCGEE, Chairman.

U.S. CIVIL SERVICE COMMISSION,
Washington, D.C., April 13, 1971.

Chairman, Committee on Post Office and Civil Service,
U.S. Senate, Washington, D.C.

DEAR MR. CHAIRMAN: This is in response to your letter of March 30, 1971, concerning testimony of AFGE President John Griner before the Committee on Post Office and Civil Service on wage board legislation. Mr. Griner stated that 71,845 blue collar employees were dismissed from the Federal service during the period July 1969 through July 1970 (page 3 of his prepared testimony).

Mr. Griner cited that in July 1969 there were 745,735 blue collar employees of the United States and that in July 1970 there were only 674,250, or a reduction of 71,845. These figures include foreign national employees in overseas areas. However, since Mr. Griner said they were employees of the United States instead of in the United States his statement was correct although somewhat misleading.

The number of wage system employees in the United States dropped from 592,218 on June 30, 1969 to 545,373 on June 30, 1970. This was a reduction of 48,845 wage system employees. During this same period the number of General Schedule employees in the United States dropped from 1,273,695 on June 30, 1969 to 1,263,556 on June 30, 1970. This was a reduction of 10,139 General Schedule employees.

The above figures indicate net reductions. They result from many causes including death, resignations, retirement, removal, separation by reduction in force or reclassification from Wage Grade to General Schedule and vice versa. The Civil Service Commission does not maintain records on type of separation broken down to Wage Grade or General Schedule employees. This information is compiled by type of separation rather than type of employees.

Our records reflect that during fiscal year 1970 the percentage of separations from the Federal Government was distributed as follows:

We expect to complete the review and coordination of our legislative proposal for a Federal Wage System in the very near future. We will submit it to the Congress as soon as possible and I will be pleased to testify in support of our proposals.

Kind regards.

Sincerely yours,

ROBERT E. HAMPTON, Chairman.

The CHAIRMAN. We will now hear from Mr. William H. Ryan of the Metal Trades Department, AFL-CIO.

STATEMENT OF WILLIAM H. RYAN, NATIONAL COORDINATOR AND LEGISLATIVE REPRESENTATIVE, GOVERNMENT EMPLOYEES DEPARTMENT OF THE INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS, AFL-CIO; ACCOMPANIED BY SAUL STEIN, METAL TRADES DEPARTMENT

Mr. RYAN. My name is William H. Ryan and I am national coordinator and legislative representative of the Government Employees' Department of the International Association of Machinists and Aerospace Workers, AFL-CIO, and I am authorized by President Maywood Boggs of the Metal Trades Department, AFL-CIO, to testify for and in behalf of the department and its 22 affiliated national and international unions on this very important legislative proposal to bring sense and equity to the wage fixing procedures for prevailing rate employees of the Government.

I am accompanied by Mr. Saul S. Stein, general representative of the metal trades department.

At the outset, I convey the appreciation of our affiliated unions to the chairman of this committee for scheduling hearings, to Senator Moss, and the several other members of the Senate who have sponsored companion bills to S. 231.

All of the 22 affiliated unions of the metal trades department wholeheartedly support the objectives of this proposed legislation with

minor clarifications for which we urge your consideration to insure that the intent of the legislation is clear and objective in bringing about much-needed wage reforms for the Government's wage board employees and nonappropriated fund employees and other groups of employees covered by this proposed legislation.

The main objectives of the bill are to bring about a 10-step pay progression (automatic) in each labor grade, similar to the pay progression set by law for Classification Act (white collar) employees.

Equity and pay justice dictates that blue collar employees be treated equally to the treatment of white collar employees. Under the present administratively controlled coordinated Federal wage system the prevailing rate employees are severely limited to wage progression beyond step 2 of their wage grade.

On the other hand, Classification Act employees can progress to step 10, which provides over 18 percent in longevity increases beyond their fourth step which is considered comparable to the wage board employees' second pay step.

Another objective of the legislation which we support is a uniform night differential of 71⁄2 and 10 percent for the second and third shifts, respectively.

We also support the provision which would establish a Federal Prevailing Rate Advisory Committee composed of 11 persons as indicated in the bill with the Presidential appointment of a Chairman not holding any other position in the Government and/or the District of Columbia.

Our experience under the CFWS with a chairman designated by the Chairman of the Civil Service Commission has been, to say the very least, very frustrating. [Applause.] The weight of logic and merit of our presentations fall on deaf ears and we are continually faced with six to five votes against any realistic proposal we set forth in the National Wage Policy Committee.

We believe that a chairman with no ties to any Government agency will provide the Advisory Committee with a more objective approach in reaching decisions. [Applause.]

We very strongly endorse the language on lines 19 through 24 on page 2 of the bill which would require firms under contract with the Government for providing services or goods, to be responsive to furnishing wage data to the wage fixing system. [Applause.]

Under the mistaken belief that such data is released publicly, many firms and associations of industries have refused to furnish wage data in usable form to accomplish the establishment of comparable area rates for Government prevailing rate employees.

The refusal to furnish such wage rates has worked against the objective of establishing comparable area wage rates, and we urge the Congress to retain this necessary provision of the bill.

We also support the inclusion of nonappropriated fund employees and other groups proposed by the bill.

We, however, urge the inclusion of language which would make it clear that the Congress supports the principle of negotiated wage rates via union contractual relations [applause] where such relations now exist and that it is not the intent of Congress to bring such negotiated rates under the provision of the legislation unless the majority of employees in each unit under a negotiated wage schedule vote for inclusion under the system established by the law.

We also recommend that language be added to the legislation which would make it clear that all time spent in a given labor grade be counted toward entitlement to pay step increments upon the effective date of the law. Equity and fairness dictate that prevailing rate employees be credited for all time spent in their current labor grade. Classification Act employees have been enjoying the benefits of these additional pay increments for many years where, on the otherhand, prevailing rate employees have been denied these progression wage increases based upon job performance of "satisfactory" and length of service within grade.

Under the current CFWS procedures, construction pay rates are not used from the private employment sector to construct a wage pay line for prevailing rate employees, despite the fact that in many instances, private contractor employees performing maintenance functions on military bases work side by side with Government prevailing rate employees. The contractor employees are paid the area construction rates for such work, and the Government employee receives considerably less hourly wages.

We strongly urge the Congress to adopt legislation which would, at the very least require the collection of wage data from contractors engaged in construction and/or maintenance functions where the area construction wage rate is paid for work comparable to that work being performed by Government prevailing rate employees.

We submit that it is unreasonable and unfair to expect Government employees to work side by side with contractor employees on comparable jobs and receive lower hourly rates of pay.

We have experienced situations where area surveys of private industry in a given wage area would not provide data sufficiently high to provide wage increases for prevailing rate employees that would equal the rise in the BLS Consumer Price Index (CPI).

This condition occurs when certain large industry samples are secured from a depressed economic area or from an industry which is going through an economic depression period.

It is unfair to saddle prevailing rate employees of the Government with the adverse effect of depressed economics over which they have no control, and at the same time deny wage adjustments which would, at the very least, keep them abreast of the upward spiral of the CPI. We urge the utilization of BLS-CPI as a reference for establishing minimum increase provisions for prevailing rate employees.

Prior to the issuance of a local prevailing rate wage schedule, a determination should be made of the amount of percentage increase by which the national CPI for the wage survey order date month exceeds the national CPI for the month in which the preceding wage survey was ordered.

After that determination is made, then use a formula for translating CPI increases to a flat cents-per-hour minimum increase.

We propose the following conversion formula: A cents-per-hour increase for each 1.0 percent increase in the CPI-rounded to the nearest percent-times the rate for wage grade 7, step 2, on the schedule for the wage area.

We contend that such a cost-of-living increment as a wage increase minimum is fair and proper to relieve employees from suffering the adverse economic impact of depressed industry and depressed area influence in the establishment of their wage rates.