The annual Los Alamos survey of professional scientific salaries has also become a recognized reference. For several years the Sandia Corp., has made an annual analysis of administrative exempt personnel. Salary studies like those of the Engineers Joint Council, National Science Foundation, and other professional organizations are also standard references. In some areas large municipal agencies are jointly collecting and analyzing wage and salary data on a regular basis.

Two University of California professors, C. C. Harris, Jr., and D. B. DeLoach, report their study of, "The Profit Motive: A Stimulant to Federal Administrative Efficiency," in the winter issue, 1962 of Public Administration Review, The authors suggest a plan for awards to Federal administartors for saving money as a solution to our increasing cost-of-Government dilemma.

The American Management Association conducts continuing studies of executive compensation. AMA's Executive Compensation Service seeks to inform industry as a whole in its efforts to adhere to the policy of comparability in salaries. The Service stresses that the maintenance of an equitable as well as a competitive salary structure has become a continuing management responsibility ordinarily calling for a thorough study at least once a year. K. E. Foster of System Development Corp. reports in the January-February 1963 issue of Personnel that nearly every sizable company is caught up in the vogue of wage and salary surveys, which are here to stay.

Writing in the Wall Street Journal, May 14, 1963, Alfred L. Malabre observes that the American breadwinners' income is rising far faster than his paycheck indicates. Wage and salary payments have almost tripled since World War II, but employer payments that do not show up in paychecks-so-called fringe benefits-have increased nearly sixfold. This nonpaycheck pay is now somewhere about $20 billion a year and it does not tell the whole story. It covers primarily employer-paid insurance plus pension money for retirement. It does not include, for example, more paid holidays, longer paid vacations, plush employee country clubs, free employee lunches, sizable price discounts, stock option plans, and early retirement plans. M. Reagan, commenting on these facts in the June 15, 1963, issue of New Republic suggests the additional inequity of untaxed income, comparing those whose income is totally in the form of cash and those whose income is partly in nontaxable benefits. A free lunch every workday adds up to a sizable benefit each year-one public servants fail to enjoy.

The New York Times pointed up the salary discrepancy for top professionals in Government and industry on December 5, 1961:

****The basic problem is this: though the Federal Government is the most important, largest and most complex business in this country, the rewards it offers for superlative talent-in law, engineering, economics, and many other fields as well as science-are miserly compared to the rewards that nongovernment organizations pay. The rule of equal pay for equally difficult work ought to apply to all citizens, including those who work for the United States * * *." A report, "Physicians' Earnings and Expenses," published by Medical Economics, Inc., Oradell, N.J., in 1961, based on a 1960 survey reflects the serious discrepancies between salaries paid physicians in the Federal service and the earnings of physicians in private practice.

In a recent American Management Association seminar on "Salary Administration for Scientific, Professional, and Technical Personnel," William Diefenbach, of McKinsey & Co., presented the salary problems of engineers and scientists. One of his principal points of emphasis was that salary plans for such professionals, as well as other employees, must take into consideration "the going industry scale."

In his recently published study, "Higher Skills for the City of New York," David T. Stanley, of the Brookings Institution, compares professional salaries of employees of the city of New York with comparable positions in other governments, including the Federal. The comparison clearly indicates that the Federal service is lagging behind a number of other jurisdictions in compensating many types of professional positions.

A survey by a member of the Federal Professional Association reveals the following pertinent facts about trade association executives in Washington, D.C.:

1. The top trade association executive (executive secretary, executive director, executive vice president, etc.) directs a paid staff of from 75 to 200 personnel engaged in membership, legislation, trade practices, research, and economic forecasts. He reports to a board of directors for policy and lobbying guidance.

2. The salaries of trade association executives range from $25,000 to $35,000 per year, plus fringe benefits too numerous and varied to be computed into dollar equivalents. These benefits include such items as: virtually free medical service, practically unlimited travel and expense accounts, very low-cost life insurance, a great deal of unaccounted-for leave, as well as regular vacation and sick leave, etc.

These are the officials with whom Congressmen and many executive branch officials and employees at subordinate levels must deal on a regular basis.

These trade association officials believe, almost to a man, that congressional salaries are too low by from $10,000 to $15,000 per year. They also believe that the salaries of the executive branch officials with whom they deal are similarly low. They recognize that the responsibility of the Government executive is considerably greater than that of the trade association executive, even though the latter is almost invariably paid more.

Nowhere is the contract made more clear than in the series of charts submitted to this committee by Chairman Macy in his statement of September 4, 1963.

FRINGE BENEFITS

Any discussion of comparability must, of necessity, take into consideration items other than regular salaries. These other items are commonly termed "fringe benefits."

It is extremely difficult to compare the value of the fringe benefits available to "typical" professional employes in private enterprise with those available in Federal Government employment, because the use of any averages is apt to be misleading.

The annual leave provisions in Federal service are probably about equivalent to the best of those in private enterprise with respect to professional persons who have had at least 15 years of service-taking into account that the 26 days of annual leave in Federal service includes not only vacation time, but also short hour-to-hour absences for personal matters. On the other hand, the much shorter annual leave (15 days) for Federal employees with less than 15 years of service probably does not stack up well against the annual leave provisions for similar private employees.

Professional employees in private enterprise probably, on the whole, have much more liberal sick leave provisions than Federal employees-especially in cases of serious long-term illness.

The retirement benefits for Federal employees are on a very liberal basis, both as to amounts and as to early retirement ages. The cost of the civil service retirement system is probably well in excess of the combined costs of private pension plans and the social security system, although in some cases the former are financed entirely at the expense of the employer.

Undoubtedly, the vast majority of the group life insurance plans of private employers are more liberal than that available to Federal employees since the benefit is frequently two or three times the annual salary but often subject to a maximum of about $25,000 (rather than 1 year's salary). In some instances, group insurance plans in private industry are financed entirely by the employer, but in most cases, it is likely that the employee contribution rate per $1,000 of insurance is about the same as for Federal employees.

As to health benefit plans, the Federal Government finances only about onehalf of the cost of a relatively minimum basic plan, whereas in private industry, such programs are usually far more comprehensive and the employer pays a higher proportion of the cost. In the latter respect, it may be noted that Federal employees can obtain more comprehensive benefits, but then they pay the entire cost themselves.

Benefits for work-connected injury and disease are available to Federal employees under the employees compensation system, which is far more liberal than any of the State programs under which employees in private industry are protected. However, it is likely that professional employees in private industry would have certain supplementary protection available from their employereither under the pension plan (or on an informal basis) that, along with any social security benefits, would provide more adequate treatment than the State workmen's compensation benefits alone.

Some private employers have other types of employee benefit plans (such as savings plans under which the employer matches the employee's savings, stock options, etc.) that do not exist for Federal employees.

above grade 9 may be paid overtime at the time and one-half rate for grade 9 employees. Postal supervisors above level 7 receive no overtime payments.

4. Class act employees may be advanced much more rapidly than supervisors in the postal field service. This can easily be seen by the fact that in the postal field service only 45,151 employees or 9.4 percent are in levels 7 and higher while under the class act, 404,446 employees or 42 percent are in grades 7 and higher. The majority of postal supervisors and postmasters do not progress beyond level 7.

The Post Office Department estimates the cost of this amendment at $1.8 million. Since the cost of H.R. 11049 is estimated at $533 million and the President, in his budget message, has requested $544 million for salary comparability, this small amount could easily be absorbed.

Section 114 on page 24 of H.R. 11049 needs further clarification since the language is subject to many interpretations. This section. grants the Postmaster General authorization to advance any employee in PFS level 9 or below who was promoted to a higher level between July 9, 1960, and October 13, 1962, if he is senior in respect to total postal service to an employee in his own office promoted to the same position since October 13, 1962, and is at a step in the level below the step of the junior employee.

We suggest that paragraph (d) be rewritten by striking out "is authorized to" and substituting "shall" on lines 7 and 8, and by striking out in paragraph (2) the word "position" on line 14 and substituting "level."

The reason for the first change is to make mandatory the stepadvancement of the senior employee who was promoted sooner than the junior employee. The second change is important since the senior employee may be in the same salary level as the junior employee but will be denied the step increase if he is not in exactly the same position. The employee in the same position level should all receive equal treat

ment.

Middle-level compression is something that has been discussed by administration spokesmen, but no suggestions have been made to alleviate this compression. Studies of the BLS figures show that in the PFS schedule, H.R. 11049, the first five levels are closely comparable with salaries in industry, but begin to show a big difference beginning with level 6 (212 percent below salaries in industry for comparable position) and increasing through levels 7, 8, and 9 (all 3.4 percent below salaries in industry) with level 10 5 percent lower and increasing from there through the higher levels. We respectfully urge this committee to grant adjustments in these levels to bring them in line with true comparability.

We all know that Public Law 87-793 was based on comparability with salaries in industry as well as equal pay for equal duties and responsibilities. Although our statement-in order to expedite these hearings is necessarily brief, we could point out many instances where comparability does not apply to the middle and higher levels. We hope that the committee will report a bill based as nearly as possible on true comparability and we also hope that the inequities to which we refer in our statement will be removed from the present law and the proposed House bill.

To best illustrate how the principle of comparability is destroyed by H.R. 11049, a look at the following chart will show how the supervisors in the first supervisory levels, in spite of their additional responsibility, receive much less dollarwise and percentagewise than those supervised by them:

There is no place in industry where we find greater increases going to employees with lesser responsibility.

Our association strongly supports the congressional salary adjustment. We feel that it is long overdue and that it should be made more realistic as soon as possible. We know that if your constituents were in as close contact with you as we are, they, too, would agree unanimously that there should be an upward adjustment in your salaries immediately. They would wonder how so many good people can be found who are willing to make such sacrifices with comparatively little reimbursement when all factors are taken into consideration. Our members are letting their relatives, friends, and neighbors know that a congressional salary increase is not only deserved, but necessary.

Thank you very much for the opportunity of appearing before you and presenting our views.

The CHAIRMAN. We thank you for coming before us this morning and giving us this information and pointing out the desires of yourself and your association.

As you know, and I think you pointed out in your statement, Postmaster General Murphy has also been requested to give certain information to us along this line. We are hoping to get that now by Monday.

Mr. JASPAN. I understand he has already compiled the information and it should be in the hands of the committee soon. We were told that yesterday.

The CHAIRMAN. We will have it in, I am informed, by Monday.

Mr. JASPAN. He also pointed out the inequities resulting from the increase in one level caused by this discrimination against postal supervisors and promised to furnish the committee with some samples. The CHAIRMAN. We thank you for your statement and your additional comments.

Are there any questions by members of the staff?

Mr. PASCHAL. On the amendment you emphasized in one particular, have you any wording for such an amendment that you are submitting?

Mr. JASPAN. Yes, Mr. Paschal. I will read it to you:

Section 3552 (a) of title 39, United States Code, is amended to read as follows:

"(a) (1) Each employee of the Postal Field Service Schedule and each employee subject to the Rural Carrier Schedule who has not reached the highest

step for his position shall be advanced successively to the next higher step as follows:

"(A) To steps 2, 3, 4, 5, 6, and 7-at the beginning of the first pay period following the completion of fifty-two calendar weeks of satisfactory service; and

"(B) To steps 8 and above at the beginning of the first pay period following the completion of one hundred and fifty-six calendar weeks of satisfactory service.

"(2) The receipt of an equivalent increase during any of the waiting periods specified in this subsection shall cause a new full waiting period to commence for further step increases.

Mr. PASCHAL. That is the proposal you would like to have?

Mr. JASPEN. Yes, sir. And that would take care of the greatest inequity in the bill.'

The CHAIRMAN. We will now hear from Dr. Gregory K. Hartmann, president of the Federal Professional Association.

We hope you will try to stay within the time, 15 minutes is the limit. We don't want to do that, but we are trying to wind up this little ball today and Monday, if we possibly can.

Dr. HARTMANN. Thank you. I believe we can conserve time if I go through our prepared statement, essentially reading it to you.

STATEMENT OF DR. GREGORY K. HARTMANN, PRESIDENT, FEDERAL PROFESSIONAL ASSOCIATION; ACCOMPANIED BY VINCENT JAY, EXECUTIVE VICE PRESIDENT

Dr. HARTMANN. My name is Gregory K. Hartmann, and I am president of the Federal Professional Association, a new organization of career professionals employed in the Federal service.

Accompanying me is Mr. Vincent Jay, past president of the association and currently executive vice president. The Honorable Robert Ramspeck, distinguished former Member of the Congress and now consultant to the association, is unable to be with us today.

The CHAIRMAN. I too regret that the distinguished Mr. Ramspeck could not be with us. I know that his wife is ill.

Dr. HARTMANN. The Federal Professional Association is a voluntary nonprofit organization consisting exclusively of professional employees in the Federal service. It encompasses all disciplines and all agencies. It is dedicated to enhancing the value of the Federal career service to the public fostering high standards of professional service to the Government, and promoting the welfare of Federal career professional personnel, through education, research, and appropriate consultation.

We were incorporated in the District of Columbia, April 30, 1962, and formally established at a founding conference November 28, 1962, at Washington, D.C. Now we are just a year and a half old, the association has a membership of over 600, with local chapters currently active in 10 cities and with more chapters being organized throughout the country.

THE PROBLEM

We are appearing on behalf of career professionals in the Federal service who favor continued congressional support for the principle of comparability of pay between private enterprise and the Federal service. The basic principle that Federal salary rates shall be com