1 Source: Table of "Total Emoluments, United Nations Professional Staff," 10:01A: February 1963. Source: "Information on the Operations and Financing of the United Nations," a Feb. 6, 1962, joint committee print of the Senate Committee on Foreign Relations and House Committee on Foreign Affairs. The numbers shown in ranks D-2, D-1, and P-5 are those in posts "subject to geographical distribution." Mr. MACY. Consequently, I shall now merely summarize and reemphasize certain key features. First, conformance with requirements of law: One fundamental consideration is that the salary adjustments proposed by the President are called for by existing law and have been developed in strict accordance with existing statutory provisions. As basic policy, the 1962 act requires that— Federal salary fixing shall be based upon the principles that- (a) There shall be equal pay for substantially equal work, and pay distinctions shall be maintained in keeping with work and performance distinctions; and (b) Federal salary rates shall be comparable with private enterprise salary rates for the same levels of work. To give effect to this prescribed salary policy, the act in section 503 calls for A report to the President, by agencies he designates, comparing Federal statutory salary rates with private enterprise rates for the same levels of work, as determined on the basis of annual surveys by the Bureau of Labor Statistics. A report to Congress, by the President, after seeking the views of employee organizations in a manner he deems appropriate; the report to provide the comparison of Federal and private enterprise salary rates and any recommendations the President deems advisable. The salary adjustments that the President has recommended for January 1964 conform with the policy and procedure prescribed by law. Salary levels proposed are equivalent to private enterprise average rates-national average rates. They represent salaries of neither the best private employers nor the lowest paying employers. The Government's practice is to follow a middle-of-the-road salary policy. For the balance of my statement, Mr. Chairman, I shall discuss the salient details of the proposals as depicted by the charts which I submit to you. This will be a somewhat more informal presentation. It was my judgment that this might be more helpful to the committee than to have a detailed statement of a narrative nature. Chart I endeavors to depict in outline form the statutory procedure followed in the development of the proposed schedules. The first step was the Bureau of Labor Statistics salary survey report. This report was a summarization and an analysis of the data collected by the Bureau of Labor Statistics in 1961-62. This data included national average private enterprise salaries for 75 position classes which were identified to be in like content and like level with positions in the Federal service. The data was collected from 80 metropolitan centers across the country. The data came in two general categories: First, the category of clerical and drafting jobs from about 4,700 private establishments in the 80 metropolitan areas. The second survey included pay data for administrative and professional jobs from about 1,750 private establishments. This information was published by the Secretary of Labor in a pamphlet entitled "National Survey of Professional, Administrative, Technical, and Clerical Pay, 1961-62" and is identified as Bulletin No. 1346. CHART I. STATUTORY PROCEDURE FOLLOWED IN DEVELOPMENT OF PROPOSED Bureau of Labor Statistics salary survey report issued in late 1962: Pay data for clerical and drafting jobs from about 4,700 establishments. Pay data for administrative and professional jobs from about 1,750 establishments. President, in Executive Order 11073, designated Director of Bureau of Budget and Chairman of Civil Service Commission to make the annual comparison of Federal and private enterprise salary levels, as required by Salary Reform Act. Director and Chairman made the comparisons, developed proposed Federal salary schedules which would be comparable to private enterprise salary levels, and submitted report to President. BLS findings showed a rise of about 3 percent in pay levels between 1961 survey, on which Federal Salary Reform Act schedules are based, and 1962 survey. Director and Chairman met with representatives of employee organizations and later obtained their views, in accordance with provisions of Salary Reform Act and Executive Order 11073. Principal problem: timelag. Staff study being made, to be completed before this fall's annual salary review based on 1963 BLS report of private enterprise rates. President transmitted to Congress on April 29, 1963, the comparison of Federal salaries with those in private enterprise, as required each year by the salary law, and recommended revisions in statutory salary schedules necessary to carry out statutory policy of comparability with private enterprise levels. Followed on May 16 by proposed draft bill, transmitted by Chairman, Civil Service Commission. at President's direction. In the proposal, the salary schedules of the other statutory systems-postal, Foreign Service, Veterans' Administration medicine and surgery-are linked with the Classification Act schedule. The second step was necessary in 1962-63 because of the first cycle in the application of the comparability principle. In this step President Kennedy in Executive Order 11073 on January 2 of this year, desig nated the Director of the Bureau of the Budget and the Chairman of the Civil Service Commission to make the annual comparison of Federal and private enterprise salary levels, as required by the Salary Reform Act. The third step was in accordance with that directive from the President. The Director and Chairman made the comparisons, developed proposed Federal salary schedules which would be comparable to private enterprise salary levels, and submitted the report with recommendations to the President. Very briefly, the findings showed that the BLS survey indicated a rise of about 3 percent in pay levels between the 1961 survey, on which the Federal Salary Reform Act schedules were based, and the 1962 survey. I will deal with the facts with respect to the two surveys in a moment. The fourth step, also pursuant to statutory requirement, involved the presentation by the Budget Director and the Commission Chairman to representatives of employee organizations. This presentation included a detailed graphic offering of the data that had been collected. az explanation as to how the salary lines had been computed, and the conditions that were found as a result of the compariso The employee organizations were invited to submit to the Commis sion their socuments concerning this presentation. This was done and you will find these comments included as a part of the report submitted to the Congress by the President. The principal comment from the employee organizations related to the timelag in measuring comparability, the fact that over a year's delay occurred in handling the data, and presenting it for actual consideration by the Congress. The surveys that had taken place in 1961 and 1962 were offered for application in 1964. This represented a timelag. In response to this and on the basis of its own evaluation the Civil Service Commission, in concert with the Bureau of the Budget and the Bureau of Labor Statistics, has been studying this timelag and intends prior to the review of the 1963 BLS report to develop proposals with respect to the reduction in the amount of time in handling the data that comes from the surveys. There are actually three stages that produced the timelag. One is the actual time required by the BLS survey itself. Secondly, there is the analysis of the data provided by the survey and the comparison of that data with Federal salary schedules within the executive branch leading up to the President's report to Congress. Then, the third stage is the consideration by the Congress of the recommendations that come before it. The fifth step was the presentation by President Kennedy to the Congress on April 29 of his report as required by the statute. This included the comparison of Federal salaries with those in private enterprise and recommended revisions in the statutory salary schedules necessary to carry out the statutory intent with respect to comparability. The Civil Service Commission transmitted to the Congress on May 16 a draft bill that would fulfill the recommendations in the President's report. Finally, the salary schedules in the proposal, it should be pointed out, deal with four statutory systems. In most of my discussion I will refer to the Classification Act because that serves as the guidemarker with respect to the other systems, but we are also discussing the postal field service, the medicine and surgery schedule of the Veterans' Administration, and the Foreign Service. In terms of Federal population we are talking about approximately 1,681,000 positions and men and women in those positions. Chart II is in three stages. It is offered in an effort to depict graphically the existence of the salary gap that calls for the adjustment in the schedules, Chart A, identified as the leftover gap, compares the difference between schedule 11 in the Salary Reform Act and the 1961 pay line, which was the basis for the Salary Reform Act. Chart 118 shows the additional gap, which is the difference between the pay line for 1961 and the pay line for 1962. Vid the third chart shows how the President's proposal would close that gap and eliminate the difference between the lines and provide comparability as of the data and analysis for 1962. No, if you would turn to chart IIA, the leftover gap, I invite your attention to a few points that are illustrated by that chart. There are (wo bapito salary lines that are presented here. The heavy dotted line is the comparability pay line based upon the Dat HES report. This is the pay line that was before you at the time You were considering salary reform last year. The lighter dotted line represents the fourth rates of the Classification Act schedule II, the second stage of the Salary Reform Act. There are four points that need to be identified with respect to the relationship between these two lines. First, you will note at the lower left-hand corner that GS-1, GS-2, and GS-3 in schedule II, that is, the rates that are already authorized to go into effect on January 1, 1964, are above the 1961 pay line. Secondly, grades GS-4 through GS-7 are on the line. They are comparable as of the 1961 survey. Thirdly, a gap develops at roughly grade 9 with an annual salary difference of $80. This spread increases by grade 12 to $335 and by grade 15 to $1,075. This gap, this failure to achieve comparability with respect to 1961, was caused by a fourth factor, which you will see in the upper righthand corner, namely, the determination by the Congress last year to retain a ceiling of $20,000 with respect to career pay in these four systems. By the establishment of that ceiling it was necessary to trim down the comparability rates for virtually all of the grade levels down to grade 8, so this is the slippage or, as I have described it, the leftover gap gap from 1962, which I believe is illustrated here. I should also point out that the comparability pay line is based upon Bureau of Labor Statistics data only up to grade GS-15, that for grades GS-16, GS-17, and GS-18, the line that you see here is a mathematical projection of the line in the lower levels. Last year when President Kennedy submitted his message with the proposal for the principle of comparability and the multistage ad |