? Part of increase in CPC-9 and CPC-10 is due to upward revision of basic rates by Pay Act of 1946,

Mr. WINSLOW. That, Senator, is all I have.
Senator LONG. I do not believe that I have any further questions.
Do you have any questions, Senator Flanders?

Senator FLANDERS. Well, the expected cost of this change is, of course, comparatively small, but still, as Senator Byrd was telling us Friday, it is just that little bit added to what you have got.

Mr. WINSLOW. Correct.

Senator FLANDERS. But are you willing to go on record as saying that you think this is in any sense of the word a constructive change that will pay for itself in any way-in better conditions, better morale, or anything of that sort?

Or would you rather leave it as it is?

Mr. WINSLOW. Well, I will put it this way, Senator. I think this bill will, in the long run, pay for itself, without any question.

And as Mr. Baruch indicated this morning, one thing you will get in this bill, as not now true under the Classification Act is a consistency of your pay rates in the field.

Today the heads of the departments and the agencies are fixing those rates. There is no consistency then in between departments, except insofar as they do it on a voluntary basis.

You will find, I am sure, that in some departments the classifications are below what they ought to be. And as a result, that department, in that particular area, is having a higher turn-over than they should.

Senator LONG. It seems to me that here we have run into one of the first proposals to streamline and make consistent and modernize this Government, and the first one we run into is going to mean more personnel and cost more money than it did before.

Mr. Baruch testified this morning that they were going to hire. more people in order to handle this thing.

Why should they have to have more people if this is going to be streamlined, more shipshape, less complicated. If it were really that, it would cost less money; or so, theoretically, it appears to me.

Mr. WINSLOW. I would not say this streamlines anything any more than the whole Classification Act did, in terms of setting up a salary structure that was effective in the schedules between grades and within grades.

But in terms of what the bill does, it accomplishes the kind of thing that the Hoover Commission is interested in, and I think you gentlemen are interested in, in terms of assuring ourselves here that we are paying approximately the same rates throughout the Government for those positions that should be paid at the same rate.

Today you have a sort of free-wheeling rate fixing in the field, because there is not any control. This brings within the control of the Civil Service Commission the allocations made by those agencies, without the difficulty that you would have if you applied the provisions of the Classification Act as they apply in the departmental

service.

Senator FLANDERS. Did not Mr. Baruch indicate that what increase there was would be related to starting the full salaries on the broader scale?

Mr. WINSLOW, That is correct.

Senator FLANDERS. That was the way I understood the reasons. Mr. WINSLOW. You see, Senator, these are made under Executive order.

Senator LONG. As I understand this thing, it is going to work better and cost more.

Mr. WINSLOW. That is right.

Senator FLANDERS. I cannot understand why an action to rationalize the structure should make it cost more. That is the point I would like an answer on.

Mr. WINSLOw. I would answer that, Senator, in this way. The major cost in this bill is not going to be the administration of the bill. I would doubt if the increased cost of the administration of the bill to the Civil Service Commission will cost them much over a million or a million and a half dollars.

The real cost in this bill comes out of the fact that the salary schedules today are out of whack, and they got out of whack because of the way in which the increases were granted.

Now, if we are going to be unfair in the way in which we set up our rate structure, we can administer classification on the same scale we have today, at a cost of another million and a half dollars given to the Civil Service Commission to do that job.

But this bill is to correct the inequities which we feel have crept in the schedule because of the methods used by Congress in raising the

rates.

Senator LONG. I can see what the argument there is.

Well, thank you very much, Mr. Winslow. We appreciate your coming.

Mr. WINSLOw. Thank you.

Senator LONG. Now, is Mr. Clague here?

Mr. CLAGUE. Right here, Senator.

Senator LONG. Please come forward and go right ahead.

STATEMENT OF EWAN CLAGUE, COMMISSIONER OF LABOR STATISTICS, UNITED STATES DEPARTMENT OF LABOR

Mr. CLAGUE. My name is Ewan Clague and I am Commissioner of Labor Statistics in the United States Department of Labor. I am happy to accede to the committee's request to discuss some general economic considerations that appear to bear upon S. 1762.

The proposed Position-Classification and Pay Act of 1949 is designed to establish a systematic and logical basis for the grading of positions in the classified Federal service in accordance with specific criteria, such as level of responsibility, training requirements, and other factors. Moreover, the bill sets forth salary scales that will determine the economic well-being of Federal employees in these various positions. My specific field of interest and knowledge relates mainly to the latter aspects of the act; that is, to the question of the salaries and related economic factors affecting Federal employees. I hope that my brief comments will help to provide a factual background for your deliberations on the equities of the proposed act.

To get to the heart of the matter, I should like to examine briefly how salaries of Federal employees at various grades have changed since August 1939. For this purpose I have prepared two tabulations which show selected salary levels in August 1939 and currently, and the percentage changes that have occurred during this period. The most striking fact about these tables is the variation in percentage increases for different salary levels. The positions in the lower salary

grades received higher percentage increases than those in the upper grades. For example, employees receiving salaries of $600 in 1939 received increases of 135 percent (table 2), while those with salaries of $8,000 in 1939 received increases of only 29 percent (table 1). (The tables referred to above are as follows:)

TABLE 1.-Minimum salary rates for classified Federal services except crafts, protective and custodial, 1939, 1948, and proposed

TABLE 2.---Minimum salary rate for the crafts, protective and custodial service, 1939, 1948, and proposed

Mr. CLAGUE. This variation in percentage increases resulted wholly from the fact that uniform dollar increases were granted in both the salary adjustments in 1945 and 1948 to nearly all classifications.

Aside from the equity of the matter, these changes had the effect of compressing the salary scales, particularly at the higher grades. As a result, traditional policy of compensating employees in accordance with differences in level of responsibility, could not be adequately maintained. For example, in 1939 the top grades had salary scales that were over eight times as high as those of the lower grades, while at present the corresponding spread is only five times as great. There is no doubt that the scales embodied in S. 1762 permit the restoration of some of the traditional differences. It is also true that as far as most of the classifications are concerned, particularly with reference

to the grades below the top three or four, the newscales do not provide for any appreciable change in the income of the Federal employees. It is of considerable importance to compare briefly the changes in Federal salary rates since August 1939, with changes in consumer prices during the same period.

We have the following figures on percent changes in Federal salary rates and consumer prices.

Percentage changes in Federal salary rates and consumer prices

From August 1939 to March 1949 average salaries of Federal classified employees increased 46.6 percent.

These increases relate wholly to increases in basic scales, and are not influenced by changes in the number of employees at specific salary levels.

Senator LONG. Those figures would indicate that the average Federal salary had gone up 46 percent, while consumer prices had gone up 72 percent is that correct?

Mr. CLAGUE. That is correct. That is the average increase there. This takes no account of how many people are in each classification or grade of salary scales, but just the average minimum salary.

Senator LONG. You did not attempt to weight it with the number of people in each grade?

Mr. CLAGUE. No, we did not attempt to grade it. It is shown the same way for all the salaries.

Senator LONG. You take a class that had only a thousand people in it, that class, when you go to strike off your average, would receive as much consideration, when you made that average, as a class that had a hundred thousand people in it.

Is that right?

Mr. CLAGUE. Yes. You could work it the other way.

Senator LONG. Actually, to be correct, you could not tell how much the average wage was increased unless you weighted each one of those salaries there.

Mr. CLAGUE. That is right.

Senator LONG. By the number of people in them.

Mr. CLAGUE. That is right.

Senator LONG. For that kind of an average, you would have to know how much reclassification there was, and how many people there were in different grades.

Mr. CLAGUE. That is right. You would have an increase-that would be a weighted average,

By the way, in the last column in table 1 that I mentioned before, there it does show the percentages for each grade. That forecasts that the 46.6 percent in the average, the general average, is composed of various percentage increases from 68.3 percent in the instance of the lowest grade to 28.3 percent in the highest.

So this does show the range of which this 46.6 percent is the average. To continue with my statement, during the same period consumer prices in large cities increased 71.9 percent. It it obvious, therefore,