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Mr. MACY. In some scarce skills there is competition with the Government on the part of contractors who are doing work for the Government, that is correct. However, in determining comparability, the comparative levels of salary included in the BLS survey is not limited to scientists and engineers, it includes all occupations.

Mr. JOHANSEN. That goes then to the second part of my question. I understand from news reports this morning that the President is speaking at a labor convention today, I think this forenoon, and is expected to urge some degree of restraint in wage increase demands. Would the principle of comparability be justified with respect to Federal employees' pay, if-in your judgment-if the standards of moderation that the President might set as the basis of this appeal are exceeded through the pressures of collective bargaining, and through the economic pressures which organized labor may exercise? In other words, taking an extreme case-and I hope an exceptional one-would you think that the wage rates of electricians in New York City ought to be the basis for comparability for Federal employees? Mr. MACY. No; those rates would not be included because those are occupations that are outside of the coverage of the salary systems that we are discussing here.

Mr. JOHANSEN. But if there were areas of comparability in which there were excessive demands presented and enforced by organized labor, and if they exceeded in areas that are comparable with what the President regards as a proper and reasonable and moderate restraint, then would you think that the principle of comparability ought to apply?

Mr. MACY. My belief would be that the principle of comparability as proposed in this legislation would permit an annual fact finding to determine what has happened in comparable occupations throughout the private sector; that there would be a subsequent review and evaluation of that data, and then a judgment as to what would be proper adjustments in line with comparability.

Mr. JOHANSEN. Well, my question goes to whether the theory and the premise of comparability is always going to assume that what has happened in private industry through collective bargaining is valid and in the public interest.

Mr. MACY. The assumption is that the accumulation of all means whereby salaries are set, provides a pattern that offers the Government a sound model for setting its salary levels.

Now this will include collective bargaining in some areas; it will include individual action by management in others. In our judgment, this does provide that most reasonable basis for setting salaries for the Federal Government.

Mr. JOHANSEN. Apparently the President felt in the matter of the steel price increases that there was something intemperate and improper being done. Is there any recognition of the possibility that that may happen in private enterprise with respect to wages?

Mr. MACY. I think there is adequate protection

Mr. JOHANSEN. If that does happen then in this area, to that extent the principle of comparability as applied to Federal employees is not valid, is it?

Mr. MACY. This would only be one of a significant number of conditions and factors that would go into determining comparabilityMr. JOHANSEN. I would like to be sure that it would be one.

Mr. MACY (continuing). Because we are talking here about 80 different metropolitan areas and 70 different job occupations. Actually, the jobs involved in the steel discussion would not be a part of this particular sample.

Now with respect to the proposal here and the President's plea for restraint, this program calling for, as it does, an increase of roughly 4 percent, 4.5 percent, during this year, would be within the bounds of the two standards that the President has cited; one the standard of productivity, and the other a standard relating to comparability. So that this does not represent any kind of departure from the President's plea for restraint in the matter of salaries and wages.

Mr. JOHANSEN. The only point I am trying to make, Mr. Chairman, is that this point of reference with respect to comparability is a flying target, it isn't a stationary one. Now nobody objects to its being a flying target if there is a reasonable regard for the general welfare in terms of overall wage increases, but I am simply trying to establish for the record the fact that the mere principle of comparability isn't necessarily ought not necessarily be decisive if that to which comparison is made is unreasonable or unrealistic.

Mr. MACY. If there were serious emergency or other serious conditions that would affect comparability, it would certainly be considered as a part of the Presidential review annually.

Mr. JOHANSEN. That is all I have.

Mr. DULSKI. Mr. Chairman.

Mr. DAVIS. Mr. Dulski.

Mr. DULSKI. Mr. Macy, I have the privilege to serve with the Honorable Judge Davis on the Manpower Utilization Committee, and the people in the lower steps in Government do not have the opportunity for applying for supergrades.

In the requests that are being made each year, these increase year by year as far as supergrades are concerned. I am very interested in the NASA program. There was an organization formed right within the organization and it became a corporation. There were, I think, 14-I wouldn't be sure of the number-scientists and engineers that were laid off in a plant in Canada, and the NASA program picked them up and gave them high salaries. Now there is no difference if it be an electrician or a plumber, if he is unemployed, he is unemployed.

We hired these people at high salaries. There are continuous requests saying that we need professional people. They have a chance to go into the higher step because of these supergrades. Now, is there any equalization of rates overall? Are there any restraints on any other part besides the NASA program on the supergrades?

Mr. MACY. Under this proposal the restraints on supergrades would be one of determining that the duties and responsibilities of a particular job justified grade 16, 17, or 18. There would have to be a showing in the Civil Service Commission that the job content warranted that grade level. I am not familiar with the cases that you cite, but the NASA program has been one of very substantial growth in the last year, and they have been conducting a concentrated re

cruiting program for aerospace technicians in order to build up their capability to move the program forward, and this pay proposal would make it possible for NASA and other agencies to be more nearly competitive with other organizations doing important research and development work.

It would be necessary in each instance where a supergrade was involved, even for NASA, to indicate the contents of the job and have it evaluated by the Commission.

Mr. DULSKI. Mr. Macy, I appreciate there is a great deal of dedication on the part of many of the people, but I have noticed that we have all these dedicated servants in these higher jobs, and all of a sudden there is a promotion to be made and they forget the dedication and they leave the program. The Government trains these scientists and engineers; they get their know-how from the NASA program which they are in. A mail carrier or clerk has no place else to go, they have got to work with the Government. But here we are training these scientists and engineers, spending millions of dollars, and as soon as they reach a certain peak, then if some company offers them-let's say, $35,000-suppose they are getting $17,500 and they are offered a salary of $35,000, there is no comparison as far as the levels are concerned. That is the thing that I am opposed to in this legislation, because when we are going into manpower utilization, and if there is such a request for supergrades, and if we become competitive, we will have salaries as high as $35,000 in order to be competitive with the other fields. Don't you think so?

Mr. MACY. Actually, what we are providing in the higher grades is an extension of the salary line that we have been able to construct from the Bureau of Labor Statistics survey data. We do not have at the present time data that gives us comparability information on salaries in private enterprise at the grades 16, 17, and 18 level, consequently we have extended the line mathematically. We know from our samplings that we are still going to be substantially behind in pay for comparable work as it has been roughly measured. There will be competition for well-trained and skillful people in the Government on the part of those private organizations, but we feel that if we are able to have the kind of adjustment that is proposed here, that the Government will be in a much stronger competitive picture than it has been, and that we can appeal to the people in these jobs with greater force of persuasion to stay with the Government rather than to move into these other jobs.

Now also, in a recent report to the President it has been recommended that the Government exercise a greater control over contractor salaries in these higher levels. I think this, too, will tend to have the effect of reducing unreasonable competition at these levels. Mr. DULSKI. Thank you very much.

Mr. DAVIS. Mr. Wallhauser?

Mr. WALLHAUSER. Mr. Macy, in your statement you say the proposal will serve as a guide in determining the appropriate salary-setting method when new positions are created, and so forth. In other words, it was my understanding this administration was going to try to streamline the Government, and instead of that you tell us in advance practically that new positions are to be established.

Wouldn't it be better to have the word "if" in there?

Mr. MACY. I think we could say "if and when." The experience over a long period of time is that the functions of government have been changing to meet changing conditions; that there are new organizations or modifications on organizations created that necessitate new positions.

Mr. WALLHAUSER. Wouldn't you classify this legislation that you are proposing as "good for the chiefs and not so good for the Indian"? Mr. MACY. I think that I would disagree, that this is an effort to provide legislation that will bring the chiefs and the other people in the middle and upper brackets more into line with prevailing conditions outside of the Government, and recognizing the fact that those at the lower end of the scale have tended to move in recent years into levels where they are already in line with outside conditions.

Mr. WALLHAUSER. It is my understanding that since this administration came into being, that more than 90,000 new jobs have been created.

Mr. MACY. There has been an increase since January of 1961 of about 80,000 new employees.

Mr. WALLHAUSER. Taking a rough average of $6,000 per annum, this means that more than half a billion dollars has been added to the payroll. It seems to me that it would have been more judicious to have taken care of those who are already employed, and give them decent living wages before we add such a tremendous number of employees.

I noticed in your testimony that you said that you were unable to compare postal clerks and carriers with private industry. What did you compare them with? Did you take into account the cost-of-living index for a family, or what caused you to give the increase that you suggest?

Mr. MACY. The pattern that we followed, Mr. Wallhauser, was this: That we used the Bureau of Labor Statistics survey, which compared positions in the Government with like positions on the outside. These were positions that are covered by the Classification Act at the present time. From that information we were able to get national averages for each grade and fit a salary line over the Classification Act.

Then with respect to the postal field service and the other separate salary systems, we endeavor, by comparing jobs between the Classification Act and the postal service, and arrived at points of linkage. We did feel that there was comparability between a clerk in the Classification Act and a clerk in the postal field service, and in the pay law the postal clerks and the postal carriers are in the same level.

We also brought into consideration not only the job contents comparison, but also some of the unique characteristics that pertain to the clerk and carrier in the postal service. The fact that many men spend a full career in that particular job, that many of them are heads of families, and the result is that we equated level 4 in the Post Office, where some 377,000 employees are assigned, to GS-5 in the Classification Act.

Mr. WALLHAUSER. This I am familiar with because you testified to this, but the fact is, isn't it, that you did not take into consideration the cost-of-living requirements of a head of a family, so much as you did in comparing it with some ambiguous classification in another

area that might not take into account the fact that the person was the head of a family, or had to live according to standards that we would all like to see them live by?

Mr. MACY. These factors are reflected in the salary levels that are established in private enterprise. We did not apply, in determining these levels, the cost of living. If we had, the increases would have been less at that particular level.

Mr. WALLHAUSER. I don't want to prolong this, but the Government keeps making the point that they have difficulty in acquiring scientific brains. It seems to me that it's the responsibility of Government to train scientific brains. I introduced a bill in the Congress to establish a commission to inquire into the establishment of a Science Academy, which would take into account the fact that a person had to be a graduate of an engineering school, would come to this Academy, would be trained by the Government, by scientific brains of the Government, and in return for this would have to dedicate a certain number of years to Government service, similar to West Point and Annapolis and the Air Force Academy, but without congressional appointments.

It seems to me that our Government should take some steps to accomplish this without reaching out into private industry all the time for top-ranking people.

Do you agree with this?

Mr. MACY. I would agree, and I would add that our pattern of recruitment is primarily at the graduate level, at the B.S. and M.S. and Ph D. level, rather than endeavoring to compete with those who are already advanced in university life or in industrial laboratories, and some of the work of the National Science Foundation has been aimed at expanding the training facilities or educational facilities for scientists and engineers in this country.

I certainly agree with you that one of our basic problems is developing an adequate supply in these scarce skills so that all of the purposes of the Nation can be adequately served.

Mr. WALLHAUSER. I might add that I am sorry to say this bill of mine hasn't been able to find any wings; it is still on the ground. I have one further question, and then I am finished.

You keep referring to the fact that you have tested your results with 21 corporations. These are supposedly the largest corporations in the country, or among the largest?

Mr. MACY. These are among the largest corporations, and limited to just grades 16, 17, and 18.

Mr. WALLHAUSER. My question is: why you chose 21, and secondly, do these 21 corporations depend largely on governmental contracts, defense contracts?

Mr. MACY. There are some corporations in the sampling that do have defense contracts, but they were not predominantly of that type. Mr. WALLHAUSER. They could pay almost any salaries without too much of a problem?

Mr. MACY. These were corporate positions that were not related to their Government work, and they were positions below the level of the president and chairman of the board.

Mr. WALLHAUSER. But the corporations enjoyed governmental subsidies to a large extent perhaps?

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