moving costs to shortage category employees; (3) permit the use of more vigorous recruiting campaigns; and (4) provide the proper atmosphere in Federal employment for the full and complete professional development of engineering and scientific personnel. In addition, the national society vigorously recommended and endorsed recent action by the Civil Service Commission providing higher starting salaries for engineers and scientists possessing graduate degrees.

Under this move, effective early in February of this year, engineers and scientists holding master's degrees may now receive starting salaries from $750 to $1,760 per year more than their counterparts possessing bachelor's degrees. Prior to this revision, the differential was as low as $90. This change should make Federal careers significantly more attractive to engineers with advanced degrees and should encourage prospective Federal engineers to continue their education beyond the bachelor's level.

Although this and other important strides have been taken within recent years to improve the Government's competitive position in the recruitment of engineers and scientists, it is evident that existing laws and policies still do not provide the needed flexibility in the Federal salary structure to assure agencies of sufficient numbers of the type of employees so acutely needed, especially at the higher levels. As shown in the recent study of industry salaries, developed by the Bureau of Labor Statistics, maximum Federal salaries for engineers trail average industry rates from just under $1,000 per year at the GS-7 level, to over $4,000 at GS-15.

There is little doubt that this persistent lag in Federal salaries has adversely affected the Government's ability to hire and retain sufficient numbers of highly qualified engineers and scientists. Various studies by agencies of the Government reveal that far too many top engineering and scientific personnel have been lost to universities and industrial firms in recent years because of the Government's inability to adjust quickly to changing conditions of demand. A study reported by the Washington Post of February 19 shows that in the past 10 years, the National Bureau of Standards has not been able to attract a single engineer or scientist from outside the Federal Government to fill vital, top-level positions. In addition, it is reported that more than a third of the engineers and scientists employed at the National Aeronautics and Space Administration's Goddard Space Flight Center have come from other Government agencies, which have then been left to fill their own gaps as best they can.

Examples of this type are unfortunately not isolated. Our own contacts with with Federal agencies reveal that it is a common problem, one which agency officials see no hope of solving under existing conditions.

Because of this demonstrated need for flexibility, particularly in the engineering and scientific field, the national society has strongly supported and endorsed legislative proposals for establishing a separate classification and compensation system for professional employees of the Federal Government. Such a separate classification system for engineers and scientists, attuned to changing market conditions and permitting the Federal Government to adjust salaries promptly and effectively as circumstances warrant, would represent a long stride forward in making Government service significantly more appealing to engineers and scientists.

The desirability of separate pay schedules for certain classes of employees has been recognized by the Congress for many years. A few examples are the separate schedules for nurses, physicians, and dentists of the Department of Medicine in the Veteran's Administration, the postal field service schedule, and separate schedules for Foreign Service officers and employees. In each of these cases, as with engineers and scientists, the close community of interests and distinguishing group characteristics indicate that separate schedules are the most logical method for adequately recognizing the contributions of these classifications, while at the same time assuring that Congress may maintain adequate control consistent with the need for overall policy and budgetary considerations.

The administration-recommended Federal Salary Reform Act, while it does not specifically provide a separate schedule for engineers and scientists as recommended by the national society, does encompass in principle many of the features of such a separate schedule. Because of these features, and because of the importance of immediate action to provide equitable salaries for engineers and scientists engaged in the many vital programs of the Federal Government, the national society feels that this measure should definitely be given favorable consideration by this committee, and should be enacted as quickly as possible. I would like to comment briefly on several of the provisions contained in this proposal which are of particular importance to engineers and scientists:

1. As presented to Congress, this bill would restore a more proper differential between starting and top-level salaries of engineers and scientists. It has been pointed out that the ratio of starting salaries to top salaries for career employees has been seriously reduced in recent years, causing a corresponding reduction in incentive for continued Federal service among the more promising young engineers and scientists who are so vital to our long-range efforts, particularly in the space program. Under present conditions, Government laboratories too often have become merely training grounds for future careers in private industry, with the best people leaving the Federal service just when their potential contributions are becoming greatest. There is a saying in the engineering profession that good engineering doesn't cost, it pays. In view of the planned allocations for our future space program, it becomes an economic necessity to retain those individuals with the background and experience necessary to assure the American taxpayer that he is getting maximum return on this investment.

2. Unlike former pay-raise bills, the current proposal provides that Federal employees, including engineers and scientists, will retain their present in-grade step in switching to the new schedule. In previous legislation of this type, individuals were placed in the nearest higher salary within their grade, so that in many instances, the effect of the pay raise was practically nullified. In view of the necessity of providing an immediate increase in incentives to engineers and scientists, this provision is particularly desirable.

3. As at present, the bill authorizes the Civil Service Commission to set in-grade minimums higher than the first step in categories which it determines to be in short supply. As demonstrated in the past, this type of flexibility is of extreme importance in the engineering and scientific field, where requirements for highly qualified specialists must be met without delay.

4. Department heads would be given the authority to waive in-step time requirements in cases where exceptional performance clearly merits a step increase. Such merit increases are almost universally used in private industry, where they have proven to be a strong incentive for outstanding contributions among engineering and scientific personnel. In addition, this practice immeasurably raises the morale and status of the more creative individuals, by assuring them that their contributions will be recognized and rewarded.

5. A new appointee possessing extra qualifications could be placed in the lowest above-minimum step in the authorized grade which equals or exceeds his salary immediately prior to appointment. The National Aeronautics and Space Administration has for several months been engaged in a drive to hire hundreds of engineers and scientists to fill new positions created by expansions in the space program. All too often NASA recruiters have talked with highly qualified engineers and scientists possessing specialized skills vital to space research and development, only to find that while many of them are quite willing to accept positions with NASA, they feel they cannot accept the cut in pay which such a move would entail. The authorization to pay above-minimum salaries consistent with prior rates received in industry should greatly enhance the ability of NASA and other Government agencies to recruit these highly qualified specialists.

Because we believe the Federal Government should do all within its power to elevate the salaries of engineers and scientists to a level which is more closely equal to the salaries currently being received by their counterparts in industry and other areas of employment, we naturally support and favor classified pay legislation such as that proposed by the administration, which, based on sound economic factors, is equitable and just. The development of a salary system which is attuned to changing market conditions and which would permit the Federal Government to adjust salaries promptly and effectively as circumstances warrant, meets and solves one of the most glaring inequities in the present salary system. It is respectfully submitted that private industry could not thrive and flourish in our free and competitive economic society without this flexibility, and the Federal Government cannot thrive in a highly competitive, free labor market, unless it too is able to adjust to changing conditions.

We appreciated this opportunity of presenting our views and trust the above recommendations and comments will be of some assistance to the committee in its important considerations of Federal classified pay raise legislation. As in the past, we stand ready to further cooperate with the committee to the maximum of our ability.

STATEMENT OF DILLARD B. LASSETER, ORGANIZATION OF PROFESSIONAL EMPLOYEES OF THE U.S. DEPARTMENT OF AGRICULTURE

My name is Dillard B. Lasseter. I represent the Organization of Professional Employees of the U.S. Department of Agriculture (OPEDA). We have some 6,000 members who are located in the 50 States, various territories and possessions, and in a number of foreign countries. They do scientific, professional, technical, and administrative work. They are in the classified service and it should be understood that my remarks are intended to apply only to that service. It has been my privilege to appear before your committee in past years in behalf of OPEDA. I appreciate this opportunity to do so again. I may say that I especially appreciate the opportunity this time because I wish to go on record as being solidly in support of the administration's pay proposal as set forth in H.R. 10480.

The officers and executive committee of OPEDA have specifically authorized me to do this. They see in the administration's plan the embodiment of the basic ideas which they have endorsed and promoted for years past. They believe the proposed pay scales are modest and fully supported by the facts presented. They also favor the many other reforms proposed in the administration of the pay system.

We recommend adoption of the plan "as is" in order to avoid confusion and delay. If, however, change is to be made, we would recommend making the increases effective at the beginning of the fiscal year, starting with July 1, 1962, instead of at the beginning of the next calendar year. We would also favor making the initial increases in two steps rather than three.

As indicated above, we believe the administration's proposal is fully supported by the facts and considerations of policy presented. The plan results from years of study and years of experience. It has been reviewed and endorsed by a committee of disinterested experts. For the first time in many years the Congress has before it a concrete proposal, backed by the administration, which would give a measure of relief and recognition to the minority of employees who carry the burden and responsibility of doing the scientific, professional, technical, and administrative work of the Government. This is the group represented by OPEDA in the Department of Agriculture.

In my statement before the Senate Committee on Post Office and Civil Service 5 years ago (May 22, 1957) I called attention to a bulletin entitled, "Teaching Salaries Then and Now" published by the Fund for the Advancement of Education. The bulletin was based on a study by Beardsly Ruml and Sidney Tickton. Mr. Ruml reported some of his conclusions in the Atlantic, April 1957, as follows: "Fifty years ago, a salary of $3,000 a year was good, but not uncommon. Allowing for changes in the cost of living and Federal income taxes, and assuming that the professor has a wife and two dependents. in 1953 he would have had to have $11,200 in order to have equivalent economic status with that of his professorial colleague at the turn of the century***.

"Fifty years ago a salary of $4,000 for a professor was uncommon but by no means nonexistent. Today's equivalent would be $15,580.

"A salary of $5,000 in those days generally went with some administrative responsibilities: Today we still have administrative responsibilities, and the salary would be $20,345.

"In 1904, probably the top professor's salary was paid at the University of Chicago, and there to only a few men. The rate was $7,000, and today's equivalent is $31,250. In those happy, not too distant days, a first-class professor was considered economically as worthy as a first-class anybody else who was working for pay and not risking his own capital ***.

"In my opinion, for the liberal college professor an average of $15,000 is required under prevailing cost-of-living and tax circumstances, and top salaries of $30,000 should be widely distributed among the liberal colleges of the United States. But these tops should be put on a merit basis, with merit defined as talent and effort applied in the arts and skills of liberal reading, writing, and instruction."

We believe Mr. Ruml's conclusions were reasonable. We believe they would hold equally well for scientific, professional, and administrative personnel in Government service.

In concluding my remarks I would again hark back 5 years, this time to February 21, 1958, when I appeared before the House Committee on Post Office and Civil Service. At that time I stated the considered belief that the salary policy of the Government in recent years had injured the Government service and that the cumulative effect of that injury would show up for years to come. I concluded my statement then, with a quotation from a prominent economist:

"It is wrong to regard the Government merely or even primarily as an expense. It is a service-rendering organization. Its services are badly needed and are worth many times their cost. When it is proposed to spend either less or more on the Government, the crucial question always is: 'How much less or more in service do we get?' It is just as desirable to increase Government outlays where increases will produce adequate additional services as it is to cut spending where costs can be made without curtailing useful services" (from "Government Spending Can Reduce Taxes," by Sumner H. Slichter in Harvard Business Review, JulyAugust 1957, p. 108).

I shall leave it at that. On behalf of OPEDA and the many other Government employees similarly situated, I recommend favorable action by this Congress on the administration's pay proposal.

Senator YARBOROUGH. The next Friday morning, July 27. here.

The hearing is recessed.

(Whereupon, at 12:05 p.m., Friday, July 20, 1962, the committee adjourned, to reconvene at 10:45 a.m., Friday, July 27, 1962.)

REFORM IN STATUTORY PAY PROVISIONS

TUESDAY, AUGUST 7, 1962

U.S. SENATE,

COMMITTEE ON POST OFFICE AND CIVIL SERVICE,

Washington, D.C.

The committee met, pursuant to recess, at 10:30 a.m., in room 6202, New Senate Office Building, Hon. Olin D. Johnston (chairman) presiding.

Present: Senators Johnston, Monroney, Yarborough, Clark, Jordan, Randolph, Carlson, and Boggs.

Also present: William P. Gulledge, staff director and counsel; J. Don Kerlin, assistant staff director; and Frank A. Paschal, minority clerk.

The CHAIRMAN. The committee will come to order.

As previously announced, this is the final session of public hearings on pay. However, the record will be kept open for 1 week for the insertion of supplemental statements and data requested by the committee. Shortly, thereafter the committee will begin meetings in executive session to consider the testimony presented and the action that should be taken.

We are delighted today to have with us Postmaster General J. Edward Day. General Day is accompanied by a number of assistants, all of whom are welcome to appear with him at the witness table.

General Day, will you please proceed as you see fit. You may introduce those that are present with you, if you care to.

STATEMENT OF J. EDWARD DAY, POSTMASTER GENERAL; ACCOMPANIED BY RICHARD J. MURPHY, ASSISTANT POSTMASTER GENERAL, BUREAU OF PERSONNEL; FREDERICK C. BELEN, ASSISTANT POSTMASTER GENERAL, BUREAU OF OPERATIONS, POST OFFICE DEPARTMENT

Mr. DAY. Thank you, Mr. Chairman and members of the committee. I have with me here at the table Mr. Frederick Belen, Assistant Postmaster General in charge of the Bureau of Operations, and Mr. Richard Murphy, Assistant Postmaster General in charge of the Bureau of Personnel. If it pleases the committee, I would like to give a 71⁄2-page statement which covers the high points of the President's pay reform proposal.

Then Mr. Murphy in about 15 minutes would summarize some of the further details, particularly that part relating to the rural letter carriers pay schedule.