Senator YARBOROUGH. I believe I have it in mind. I have been studying it here.

Mr. BLAKESLEE. Fine. Then you can see there is a wide disparity between private pay and Government pay in the upper grades. Senator YARBOROUGH. I think you have made your case.

Mr. BLAKESLEE. All right. We will wind up with that then. Senator YARBOROUGH. Any questions? We appreciate your comments. The Senate is in session. I am going to expedite the hearings here.

Mr. BLAKESLEE. Thank you very much.

Senator YARBOROUGH. We technically have no right to remain in here after the Senate has gone in session. Do you have anything else to detail?

Mr. BLAKESLEE. No, sir. Thank you very much.

Senator YARBOROUGH. Thank you.

I will order placed in the record at this place a communication from the U.S. Chamber of Commerce, dated March 28, 1962, opposing the pay raise for Federal employees at this time.

(The letter is as follows:)

CHAMBER OF COMMERCE OF THE UNITED STATES,

Hon. OLIN D. JOHNSTON,

Washington, D.C., March 28, 1962.

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

DEAR MR. CHAIRMAN: The Chamber of Commerce of the United States urges the Senate Post Office and Civil Service Committee to table consideration of any general Federal pay raise at this time.

It is the considered opinion of the chamber's board of directors, that a general pay raise for Government employees at this time would be basically inconsistent with the President's strong admonition to both labor and industry to hold down wages and prices. It is reasonable to expect that a general increase in Government pay would reinforce a pattern in industry for another wage and price spiral that could easily unleash vast inflationary pressures on the entire economy and further impair our imbalance in international payments.

The chamber endorses the principle of reasonable comparability between salaries and employee benefits in Government and those in private industry. Further, the chamber recognizes that occasions arise when selective salary increases must be made to obtain the services of highly skilled personnel when such talent may be in short supply. Thus, the selective approach, which would have as its basic purpose the easing of inequitable wage discrepancies between the public and private sectors, is the rational approach provided the timing is appropriate.

The razor-thin surplus which the President contemplates for the 1963 budget cannot conceivably support an across-the-board pay raise for Federal employees. It is estimated that the pay proposals most favored by the Government employee union officials would cost $1.7 billion annually if enacted. The restraint which the President is urging on labor and industry becomes meaningless if the Nation's largest employer, the Government itself, does not set a proper example. In fact, the small projected surplus for fiscal 1963, it is now widely believed, will in fact turn out to be a deficit. Any across-the-board pay raise would increase the probabilities of a deficit.

The regular Federal payroll for full-time civilian employees in the executive branch is now running at a rate of over $14.2 billion a year. As of January 1962, there were 2,428,691 full-time employees on the executive branch rolls, and the budget for fiscal year 1963 contemplates an increase to 2,528,815. Should Congress grant the administration's request it would add over 100,000 more Federal employees on the rolls by the end of June 1963, which at the June 30, 1961, median rate of $5,335 per employee, would cost an additional $0.5 billion. The executive branch payrolls would then exceed $14.7 billion a year, not including the inevitable upgrading of personnel which always occurs. From this it can be

readily noted that each percentile point, which might be applied in the case of any across-the-board increase, would amount to approximately $147 million.

Apart from the compelling reasons set forth above as to why a general pay raise for Federal employees should be rejected at this time, certain claims have been made by pay raise proponents which are contradicted by information available in official Government reports. In substantiation of this statement, the following information is submitted for your consideration:

(1) Pay raise proponents contend that Government salaries are inadequate to retain the services of trained personnel. Proponents even go so far as to state that essential services "face collapse," because of the high percentage of employee departure from the Federal service. While most competent individuals seek to improve their positions, the rate of employee turnover in Federal service is considerably lower than it is in private industry, so much lower in fact that it indicates in an emphatic way the attractiveness of Federal service. A review of Federal employment statistics bulletins, published monthly by the U.S. Civil Service Commission, for the period January 1958 through December 1961 (the latest issue) discloses the following monthly quit-rate averages per hundred employees for the 4-year period:

All Federal employees (including postal workers).
Postal workers.

Manufacturing industries' employees---.

Percent

0.75

.56

1. 11

It cannot be argued that the quit rate of Federal employees has been on the rise during the last year or two-in fact, the Government rate improved with relation to the industry rate in 1961, when the all Federal employee rate remained constant at 0.75 percent; the postal workers rate decreased slightly to 0.55 percent and, the industry rate rose to 1.22 percent. The quit-rate percentage for all Federal employees includes employee transfers in each instance cited here. Thus, it will be noted that the quit and transfer rate of all Federal employees during the 4 years was only 68 percent that of the quit rate in industry, and the postal employees rate only 50 percent of the industry rate.

(2) Pay raise proponents frequently argue lack of opportunity for advancement in Federal service. A comparison of grades of classified employees for fiscal years 1956 and 1960 when the average number of employees aggregated 950,277 and 972,923 respectively, indicates a substantial promotional pattern in every grade above GS-3 except in grades GS-7 and GS-10. At the same time the number of employees in grades GS-1 through GS-3 declined 30 percent. The percentage increases in grades GS-11 and above run the largest, with GS-11 showing a 41-percent increase; GS-12 about 46 percent; GS-13 about 56 percent; GS-14 about 66 percent; and GS-15 about 65 percent. The number of positions in the supergrades increased over 200 percent. We trust that the promotions were based on merit, despite a recent criticism of one agency that promotions were granted merely as a device to upgrade employees' salaries without increased responsibilities. To a large extent Federal employees have benefited by aggressive promotion policies operating within their agencies.

(3) Postal employee leaders content that the positions of postal clerks and carriers lack comparability with positions in the private sector. Quite obviously, these positions are unique so far as the absence of absolute counterparts in industry might be concerned, but it stands to reason that each of these positions involves defined levels of skills, responsibility, education, physical fitness, and maturity. These are all attributes which are common to other positions in Government as well as to positions in private industry. These represent comparable standards which can be identified with positions now existing in private industry. The fact that it may be necessary to segment the duties and responsibilities among two or more related jobs does not prevent a fair evaluation of postal positions. Comparability can be determined if it is so desired.

(4) The contention that Government employees generally do not earn as much as their counterparts in private industry appears difficult to reconcile with available data. The U.S. Department of Commerce, Survey of Current Business, for July 1961 in table No. 52 reports the full-time earnings for all employees in the United States. While using different criteria for determining the average annual salary of Federal civil employees than those used by the Civil Service Commission, this report is consistent in the evaluation and comparison of earnings in both the public and private sector. The average annual earnings of Federal civilian

employees compared with the functional grouping of privately employed workers are reported as follows:

Average annual income

$5, 946

5, 928

5, 685

5, 642

5, 488

5, 342

4,840

4, 445

3, 587

1, 729

(5) The need to keep pace with the cost of living is frequently advanced in support of employee pay raises. In this respect, according to information furnished by the Deputy Director, Bureau of the Budget, to Senator A. Willis Robertson in a letter dated March 1, 1962, the Consumer Price Index increased 113 percent between the period of 1939 and July 1, 1960, the date of the last Federal pay raise. However, in contrast to this increase, the pay for the clerk-carrier group of the postal service, which represents approximately 90 percent of the total employees of the postal service, had increased 179.1 percent. Similarly, the pay for the beginning grade in the classified service, principally messengers, had increased by 152.8 percent and the entry level for professional employees at GS-5 had increased by 117.3 percent. The Deputy Director advised also that the Consumer Price Index has increased only 1.3 percent between July 1, 1960, the date of the last employee pay increase, through January 1962.

From the foregoing information, it will be noted that wage increases of 90 percent of the postal workers exceed the cost-of-living increases based on 1939 indexes. With regard to classified employees, the Civil Service Federal Employment Statistics Bulletin for October 1961, reveals that on June 30, 1961, 48 percent of the classified workers were employed in grade GS-5 and below. Thus, it follows that the increases of this group likewise exceed the cost-of-living increases since 1939. If any case is to be made of the cost-of-living factor, it can only prevail with respect to employees in the higher salary grades. Analysts, furthermore, are increasingly agreed that basing wages on cost-of-living changes creates a built-in inflation policy into our economic system.

(6) Government employee union leaders frequently select as representative earnings in industry, highly priced trade union wages and salaries of professional positions outside the Government, and then endeavor to compare these with average civil service salaries. Two important factors are often overlooked: (1) That the trade union jobs fall generally in the so-called blue-collar or wageboard classification in the Government, and therefore are presently fixed on prevailing local wage rates; and (2) that the number of professional positions in the Federal service represents only a small percentage of the total. U.S. Civil Service, Graphic Presentation of Federal Employment, dated March 1961, reports that 15 percent of all white-collar positions are professional. While, it is believed that the next such report issued by the Civil Service Commission will show a substantial percentage increase to reflect the recent hiring of additional scientists for our expanded scientific efforts, the great bulk of Federal employees will continue to be nonprofessionals. On the other hand, positions below the level of GS-4, which comprise 25 percent of all white-collar jobs, pay salaries equal to or greater than those of like comparability in private industry-a fact disclosed by the Bureau of Labor Statistics recent national survey of Federal positions.

Again, you are urged to reject action at this time on a general pay raise for Federal employees.

I would appreciate your making this letter a part of the official record of your current hearings on Federal pay raise legislation.

Cordially yours,

THERON J. RICE, Legislative Action General Manager.

Senator YARBOROUGH. The next witness is Mr. Vaux Owen, president of the National Federation of Federal Employees.

Mr. GULLEDGE. Mr. Owen, unfortunately, is ill but he has this statement to be inserted in the record.

Senator YARBOROUGH. The statement will be printed in full in the record.

(The statements referred to previously follow:)

PREPARED STATEMENT OF VAUX OWEN, PRESIDENT, NATIONAL FEDERATION OF FEDERAL EMPLOYEES

My name is Vaux Owen. I am president of the National Federation of Federal Employees. Our headquarters office is at 1729 G Street NW., Washington, D.C. The National Federation of Federal Employees is an independent organization of Federal employees. It has members in every State and at many locations overseas. Its membership is not limited to any one department or agency. Practically all departments and agencies are represented in our membership. Our membership is not restricted in any way as to grade or pay level. We have many members in the lower grades as well as in the middle and higher grades. Both classified and wage board employees belong to the organization.

Since there exists no affiliation with any organization of employees outside of the Federal service, the views and policies of the National Federation of Federal Employees are the result of the thinking of Federal employees themselves. I know I express their appreciation for the very favorable circumstances under which their future pay legislation is now being considered.

We believe that pay reform is urgently needed and we appreciate the sympathetic interest of the chairman and the members of this committee in the pay situation. We also are encouraged immensely by the decision of the President of the United States to recommend to the Congress a long needed reform in the Federal salary system. With both the Congress and the administration favorably disposed toward remedial action we look hopefully for the enactment of legislation which will not only be as nearly equitable on passage as circumstances will allow, but which in a much broader and a more fundamental way, will provide a pay plan more adaptable to the future needs of the Nation in this space age. The National Federation of Federal Employees strongly approves the administration's new Federal pay reform proposal in principle. We believe it should be the basis for pay legislation during this session of Congress. We think there should be reform as well as a pay raise.

For a number of years, the National Federation of Federal Employees has urged basic reform of Federal pay policies instead of continued patchwork and piecemeal actions. In September 1958 at our national convention in Kansas City, Mo., the National Federation of Federal Employees adopted the following resolution:

"Whereas the National Federal of Federal Employees believes that the public interest demands a comprehensive analysis and study of the overall Federal pay structure leading to the establishment of a salary system for Federal employees which will be broader in vision and more soundly adapted to the requirements of the times; and

"Whereas the present method of establishing Classification Act pay schedules is generally recognized by Members of Congress, the Heads of Federal agencies, and the overwhelming majority of Federal employees as being unsatisfactory; and

"Whereas the increases recently made in Classification Act pay schedules were, by and large, inadequate, and provided only temporary and partial solution to the total Federal employee pay problem: Therefore be it

"Resolved, That the National Federation of Federal Employees establish the following as its basic policy and objectives on classification and salary:

"(1) The encouragement of and participation in a continuing program of research in the field of Federal pay administration aimed at developing meaningful, factual data which may be used by the Congress in considering proposals for improvement of the Federal pay system;

(2) That the NFFE seek legislation which shall require the adjustment of Classification Act salary schedules on a national basis to reflect equal pay for equal work and to establish rates of pay that are reasonably comparable with those paid outside the Government service by progressive employers;

"(3) The introduction of legislation early in the 86th Congress to effect such increases in Classification Act salary schedules as appear to be demanded in the interest of improved public service, recognizing particularly the fact that increases granted in recent years have failed to keep pace with increases in private industry and increases in cost of living."

The above resolution, in itself, is a foresighted advocacy of the principle of pay reform which is now under consideration.

That the security and progress of the Nation require pay reform as well as a pay raise is now generally agreed in virtually all responsible quarters. The need to make Federal pay more reasonably comparable with pay in business and industry, so that the Government may acquire and retain the skills it must have in these critical days, is unmistakably clear.

It is likewise obvious that all the Federal service must be kept in view else, proverbially, we will not be able to see the forest for the trees. This is no time to let one or two segments of Federal employees shut out the picture of the whole Federal service pay structure. We must look at the whole panorama if there is to be the kind of comprehension the situation demands.

However, while keeping the entire picture in proper perspective, the Congress unquestionably will study the proposed Federal salary reform with great care to be certain that it is in all respects equitable, practicable, and best designed to be adaptable to present needs.

While the plan properly calls for long-needed substantial adjustments in middle and upper level pay, we strongly urge the Congress to make certain that fair and equitable adjustments are made in the salaries of the employees in the lower grades as well.

We note that it is proposed to put the reform plan into effect in three stages. Necessarily substantial long-range budgetary problems are involved. Because Federal pay scales have lagged so seriously, the cost of bringing them in line with pay outside the Federal service has a heavy impact on fiscal planning. As a responsible organization of Federal employees, and as American citizens, we are fully mindful of these problems.

However, it must be emphasized that the problem of pay adjustment in the Federal service is acute and immediate. The Government is confronted now, today, with the urgent need to get and keep qualified employees in many categories of work vital to the security and progress of the country. Federal employees in all departments, grades, and categories are confronted in 1962 with a continual shrinkage in the purchasing power of their pay dollars. The attached chart illustrates this shrinkage (exhibit E). For this reason, we believe that the first stage revision should be larger; in other words, there should be some shifting of emphasis in the three stage provisions. For the same reason, we urgently advocate an earlier effective date and suggest a date-not later than July 1, 1962.

Any attempt to bring basic and long-range reform to the Federal pay structure is an immense and complex task. It is, nevertheless, an essential task too long deferred. Action at this session of Congress is dictated by every consideration of sound national policy. The Congress makes the appropriations and, in the national interest, should compare the cost of doing what ought to be done now against the cost of further delay in taking corrective action.

The National Federation of Federal Employees firmly believes that the administration's proposal points the way to genuine progress, and that in the main it can furnish a sound basis for legislative action which can substantially improve the Government's position as the largest single employer in the United States. We believe it also can be the means of bringing to Federal employees a longdeserved pay increase. We think President Kennedy is to be commended for his initiative and leadership toward reforming the Federal pay structure, for the breadth of his views about it, and for the soundness of the reasoning in his special message on Federal pay reform.

It is not my purpose to burden this committee with a mass of statistics, nor is that required in these circumstances. For the case stands solidly on the record already before the committee. Of that record, the committee is certainly cognizant. The facts regarding the disparity in the pay of Federal employees, as compared with employees doing comparable work outside the Government, are unassailable.

The assiduous care with which Mr. Macy, the Chairman of the Civil Service Commission, Mr. Staats of the Bureau of the Budget, and other responsible high officials presented the case for the administration cannot be gainsaid. To cavil against the principle of comparability is to depart from sound commonsense. There are various levels of difficulty and importance in the positions held by employees in the Federal service, just as there are in private industry, and reasonably intelligent comparisons can be made. The principle of comparability affords an equitable standard for adjusting the pay of Federal employees. The National Federation of Federal Employees has long advocated it. The standard proposed seeks to base future pay action on facts obtained by annual surveys for presentation to the Congress.