of the Service and to the fact that the Service under current policy, is refraining from participating in minor cases. Table 2, attached, shows the average costs for communications for a 9-year period. C. Over-all operating costs The major item in the budget of the Service is salaries. In the former Service salaries were established in accordance with the (civil service) Classification Act of 1923 as amended. In the new Service, the Director has the authority (sec. 202b, Public Law 101, 80th Cong.) to appoint and fix the compensation of conciliators and mediators without regard to the civil-service laws and regulations. The Director has elected, however, to follow the same pattern of salary classification as that used by the Civil Service Commission. Employees, other than conciliators and mediators, are, of course, subject to all civil-service laws and regulations. Two actions taken in the past year have had the effect of increasing the salary costs of the Service. First, the Congress passed, on July 1948, the Pay Act of 1948 (Public Law 900, 80th Cong.), which provided for a flat increase of $330 for each employee. Second, the Director of the Federal Mediation and Conciliation Service in June 1948 announced the adoption of a new and uniform classification and salary plan for conciliators and mediators, aimed at enabling the new Service to attract and retain higher caliber personnel. Prior to that time, conciliators and mediators had ranged in grade from CAF-7 to CAF-15, quite often with little or no distinction in the duties performed. Under the new salary plan of the Federal Mediation and Conciliation Service the following grades were established: CAF-11, $5,232 per annum (entrance rate). CAF-12, $6,235.20 per annum (probationary status). CAF-14, $8,509.50 per annum (reserved for outstanding and meritorious Grade CAF-12 is achieved after 1 year of satisfactory performance at the entrance grade; grade CAF-13 is achieved after 1 year of satisfactory performance at the probationary level of CAF-12. Grade CAF-13 is now considered the full professional level. Grade CAF-14 is now held by about 30 out of the total staff of about 220 conciliators and mediators. The net effect of these two actions (the $330 increase to all employees granted by Congress, and the Director's new salary plan for conciliators) has been to increase the average salary costs of the new Service by about $615 per employee per year over the average salary costs of the former Service. Despite this fact, the net increase in over-all expenses (including salaries) will be only $390 per person per year in the fiscal year 1949 and less than $340 per person per year in 1950 as compared to the costs in fiscal year 1947. In other words, the savings in costs other than salaries offsets almost half of the increase in salary costs. these other savings had not been effected, the increase in over-all costs might easily have amounted to $1,000 or more per person per year. If This fact may be seen more readily from table 3, attached, which shows for a 9-year period the average salary cost and the average over-all costs per person per fiscal year. 2. EFFECT OF RETURN OF FMCS TO THE DEPARTMENT OF LABOR From the preceding paragraphs it may be seen that despite the rising cost of living and the general increase in the wage-price level (which, of course, have affected private business and all other Government agencies as well as the Service), the Service has, by improvements in administration, managed to reduce operating costs sufficiently to maintain the over-all costs at a level far below what they would otherwise have been. In fact, it has been possible to restrict the increase in over-all costs (including salaries) to less than the increase in salary costs alone. Where then may further economics be sought? What would be the nature of the economies resulting from the transfer of the Service to the Department of Labor? Certainly not from further improvements in administration; the record of the new Service could hardly be improved upon in that respect. Two other possibilities offer themselves: (1) An over-all reduction in staff; (2) the alleged economy of "centralization" of administrative services. The first of these possibilities could be accomplished in an independent Service just as well as in a Department; there is no evidence, however, of any thought by the Department that a reduction of personnel is desirable. In the absence of any criticism of the present manning of the Service, it is reasonable to assume no drastic curtailment of staff is intended. The second of these possibilities, centralization of administrative services, then, is apparently the only basis for a possible claim of economy in transferring the Service to the Department of Labor. Let us ascertain whether this claim has any validity; and in order not to overlook any items, let us give the broadest possible coverage to the term "administrative services"-let us apply "administrative services" to the entire national office staff. The national office of the Federal Mediation and Conciliation Service now consists of the following units: 1 (1) Office of the Director-13 positions. (2) Office of the General Counsel-5 positions. (3) Division of Administrative Management-41 positions. Let us examine each of these units in turn for possible economies which might result from transfer of the Service to the Department of Labor. In the Office of the Director and the Office of the General Counsel are a total of 18 positions. These 18 positions provide for all of the substantive or program functions of the national office. In the former Service in the Department of Labor there were over 40 positions in this category. By simplifying procedures, decentralizing operations, eliminating certain functions and positions, and streamlining organization, the new Service has effected a net reduction of over 20 positions. It is difficult to see how any further economies could be accomplished in these two units. Transfer of the Service to the Department of Labor could not possibly result in any further reduction in staff in these two units without seriously interfering with operations. The only positions which might appear to be susceptible to elimination by reason of transfer to the Department would be those of general counsel and attorney. These functions, it may be argued, could be performed by the Solicitor's office in the Department. An examination of the duties performed by these two officials, however, will readily show that the functions could not be absorbed by the Solicitor's office. Legal functions per se account for only a small portion of the duties and time of these officials. The major portion of their time and duties is devoted to policy formulation, administration of the arbitration program, public information and providing advice and counsel on conciliation and arbitration matters to the Director and the field personnel. Even with transfer of the Service to the Department of Labor, both of the positions would need to be continued in the Service. Further, the Service would still require legal services to be performed for it by the Solicitor of Labor and others on his staff. Let us now turn to the third unit listed above, the Division of Administrative Management, which might be more readily suspected of offering opportunities for economy through transfer to the Department of Labor. The Division consists of 41 positions; it performs organization and methods analysis, personnel management, budgetary and financial administration, services, and supply and operating statistics functions for the national and field offices of the Service. For the bulk of these functions, the Bureau of the Budget has formulated staffing standards; for example, there have been determined the appropriate ratios of pay roll clerks to total personnel, personnel technicians to total personnel, etc. It is interesting to note that for each of the functions for which the Bureau of the Budget has established staffing standards, the Service has no more than the approved number of positions. In other words, for the total number of positions now provided for the Service there would be required the same number of administrative management personnel now provided to perform those functions for which the Bureau of the Budget has established staffing standards, regardless of the organizational location of the Service. Even if the Service were transferred to the Department of Labor, there would still be required the same number of personnel now utilized by the Service for fiscal, personnel and supply functions. The other functions performed by the staff of the Division of Administrative Management (maintenance of operating statistics, editing of a weekly news letter, records management) are of such nature that it would be essential to continue to have them performed within the Service even if the Service were transferred to the "Units" includes clerical and messenger staff. Department. They could not be "centralized" by the Department. As a matter of fact, these functions were performed by the former Service itself when it was in the Department of Labor. The only change made by the new Service has been to simplify the methods and procedures and to reduce the number of positions. The supervisory staff of the Division of Administrative Management is the last area in which it might be suggested that it is possible to effect economy by "centralization" of administrative services in the Department of Labor. In this category are three positions: Director of Administrative Management, Assistant Director of Administrative Management, Executive Secretary, National LaborManagement Panel. The last two of these positions represent a continuation of similar positions in the former Service. Presumably they would be continued even if the Service were returned to the Department of Labor; one as an executive or administrative assistant to the Director, the other to continue to serve as executive secretary to the labor-management advisory council, whatever its name might be. The first named position of these three may then represent a possibility for economy. The Director of Administrative Management, in the Service, serves as budget officer and as director of personnel, in addition to directing the activities of the Division. Since the ultimate reponsibility for both budgetary and personnel matters would rest with the Secretary of Labor or his staff, if the Service were transferred to the Department, presumably the position of Director of Administrative Management could be abolished. But in the present Service the Director of Administrative Management, in addition to his purely administrative functions, also serves as a staff aide to the Director and participates in all phases of policy formulation and adoption, program planning, field supervision and administration and organization. The separation of these duties and functions from the immediate staff of the Service would most certainly deprive it of the valuable technical and informed administrative planning and execution indispensable to effective operation. 3. SUMMARY From the above statements and the attached tables it will be seen: (a) That the new independent Service has demonstrated, on the record, its ability to reduce operating costs by continually improving methods of administration which were in effect when the Service was in the Department of Labor. (b) That the transfer of the Service to the Department of Labor is not likely to result in any further reduction in over-all operating costs. (c) That the transfer of the Service to the Department of Labor, far from resulting in any great savings as a result of "centralization" of administrative services, could possibly result in the reduction of only one position, namely that of Director of Administrative Management. But even this savings is not certain since the incumbent of the position in addition to his purely administrative functions, has important staff duties as technical and administrative aide and adviser to the Director the performance of which are indispensible to effective operations. TABLE 1.-Comparison of average travel costs U. S. Conciliation Service and Federal Mediation and Conciliation Service, fiscal years 1942-50, inclusive Source: Average cost figures derived by dividing total cost for travel by number of employees. Information taken from the "actual expenses" column of the latest printed edition of the Budget of the United States for each fiscal year set forth. TABLE 2.-Comparison of average communication costs U. S. Conciliation Service and Federal Mediation and Conciliation Service, fiscal years 1942-50, inclusive Source: Average cost figures derived by dividing total cost for communications by number of employees. Information taken from the "actual expenses" column of the latest printed edition of the Budget of the United States for each fiscal year set forth. TABLE 3.-Comparison of average salary costs and average over-all costs, U. S. Conciliation Service and Federal Mediation and Conciliation Service, fiscal years 1942 to 1950, inclusive 1 Average cost figures derived by dividing total cost for salaries by number of employees. Information taken from the "actual expenses" column of the latest printed edition of the Budget of the United States for each fiscal year set forth. 2 Average cost figures derived by dividing total cost by number of employees. Information taken from the "actual expenses" column of the latest printed edition of the Budget of the United States for each fiscal year set forth. Mr. CHING. There is another point also, Senator Aiken, that comes up. Under the Labor Management Relations Act of 1947 notice was required to be given to the Service; it permitted the Service to get. into a lot of cases early. We were alerted. That was the purpose of that part of the law, I presume, and we found that quite effective because we were alerted to the conditions that existed, and we went into a lot of those cases before there were any difficulties. Now, had it not been for the notices it might have been that we would not have heard anything about the dispute until something had almost reached the crisis stage. There is another point that is important here, namely, that under the Labor-Management Act of 1947, there was a prohibition against our getting into the smaller cases, and the old Service had no such limitation at all. Senator AIKEN. I am about through. I have no further questions, Mr. Chairman. I simply want to reiterate my opinion that the Mediation Board will have to be either a part of the Labor Department or completely out of it. It cannot be a part in and part out. Senator TAFT. Mr. Chairman, may I follow up one small point that was made. I understood Mr. Ching to say that this emergency board should make a definite recommendation of settlement, which it does not do under the Taft law. Was I correct in understanding you to say that? Mr. CHING. Senator Taft, I do not know that I would make it. mandatory, but I would certainly leave them free to make recommendations for settlement, to mediate, to do anything that they could to get the case settled. Senator TAFT. You mean also then to approve this theory that they should seek to induce the parties to reach a settlement of the dispute, which is really mediation again? Mr. CHING. Yes. Senator TAFT. As I recollect all the testimony we had here from all the experts 2 years ago and this was a question which was in no way particularly labor or prolabor or anything else-mediation was considered to be one thing, and fact-finding was another. They ought to be kept separate. But do you think now that this emergency board should have powers of mediation, of fact-finding, and of recommendation, all three? Is that your opinion? Mr. CHING. Yes. Senator TAFT. That is what I wanted to get your opinion on. Mr. CHING. Fully realizing, when I say that, that the pressure that will be put on one party or the other to accept a recommendation of such board set up by the President is very great, but where the public interest is involved vitally, as you might have in a case of that kind, I think that the Government must exert pressure or throw its weight on the side of what they believe to be right. When you have a National crisis growing out of a dispute, that is inevitable. The CHAIRMAN. Senator Neely. Senator NEELY. I have no questions. The CHAIRMAN. Senator Smith. Senator SMITH. Just one or two questions, Mr. Ching. In the first place, I would like to let the record show that I have tried to watch the operations of your department since you took over your office, and I want to congratulate you on what I feel has been a very sincere approach to dealing with this problem, and doing what has been done in the best way. I think the committee would be interested if in the figures which you are going to furnish, you would show prior to your taking over, that is when the Service was in the Labor Department, and if you have any evidence as to the hesitation of employers under those conditions to use the Service, I think that would be of value to us. Mr. CHING. I do not think, Senator Smith, we could do that statistically. I do not know how to arrive at that, except that I can furnish you copies of a large number of letters that we have received from employers and unions since I have taken over the Service. I assume those letters indicate something; they indicate satisfaction with the Service, they indicate an acceptance of the Service, but to try to statistically show that the Service is acceptable or not, that is a bit difficult. if Senator SMITH. I did not mean statistics on that phase. I thought you could show the number of cases adjusted that came up when it 85905-49-pt. 1-6 |