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 com puted 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 20 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 simular 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 one half of the cost of a relatively minimum basic plan, whereas in private indus try, 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 employer either under the pension plan for on an informal basis) that, along with and social security benefits, wonid provide more adequate treatment than the State workmen's compensation benefita 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,

CONTRASTING RESPONSIBILITIES

In espousing the principle of comparability for Federal salaries, every well informed individual recognizes the difficulties of comparing the duties and responsibilities of the higher Federal officials with any positions in private enterprise. The fact is that there just is no basis for comparison because the responsibilities of the Federal official transcend any that may be found elsewhere.

Federal officials today are responsible for the largest payrolls, organizations, and economic entities in the world. They deal daily with programs, activities, and problems of a degree of importance and complexity unprecedented in the history of the world. In the course of their daily work they must communicate and negotiate with leaders in business, education, and other professional activities whose salaries are in many instances at least several times those of the Federal officials.

Members of Congress are in a similar situation. The range and complexity of the responsibilities of a Congressman have grown tremendously in the past 20 years. Today he must deal with problems of the national and international economy, with issues of world peace, national defense, atomic energy, space satellites, and medical research. While serving as a legislator for the Nation, he must represent the interests of this district and his constituents, and he must interpret to his constituency the actions and policies of the Federal Government. He frequently must maintain two offices, two residences, and must travel between Washington and his home district on many occasions at his own expense.

OTHER INEQUITIES

One unfortunate provision of the Federal Salary Reform Act of 1962 (Public Law 87-793) relating to effective dates of promotions and within-grade increases resulted in serious inequities for a number of Federal professional employees whose promotions were effective just prior to the effective date of that act. Congressmen Olsen and Cunningham have introduced companion bills (H.R. 2039, and H.R. 2125, respectively) to correct these inequities. We strongly urge incorporation of the provisions of these bills in the Federal Employees Salary Act of 1963. We also urge that similar safeguards be incorporated in this bill with respect to personnel actions being taken in this calendar year.

HISTORICAL COMPARISON

Federal salary rates for the classified grades in 1930 provided a fair measure of the various levels of responsibility carried by the incumbents of those grades. Over the past 30 years, as a result of consistently higher rates of salary increases for the lower grades, the relationships then existing among these grade levels have been seriously distorted. The attached table reflecting the rates prevailing in 1930 and 1964 for the four lowest grades and the grades 9 through 15 illustrates this distortion. For example, to cite two extremes, grade 2 was increased by 176 percent, while grade 15 was increased by only 96 percent-a differential of 80 percent.

Merely to maintain parity with the increases granted at the grade 3 level, grade 15 should now be receiving $19,200 instead of the $15,665 provided by schedule II of the 1962 Salary Act. Even the Udall bill (H.R. 8716) falls short of the parity level, providing an increase over the 1930 rates of only 115 percent. The Morrison bill (H.R. 8986) does even less to correct this inequity.

Changes in Federal pay scales, 1930-64 (selected grades)

The Committee on Post Office and Civil Service of the House of Represta tives has reported out a bill (H.R. 8986) to adjust the rates of buste comme of certain officers and employees in the Federal Government, and for other purposes. This bill goes far toward achieving the objectives of achieving POM parability and the members of the committee are to be commended for the home and serious study they have given to this subject. However, we sincerely beltere that this bill falls short by a still considerable margin with respect to then grade levels which have traditionally suffered most and in which the Rederal servee is encountering the greatest degree of difficulty in attracting and retaining the most competent personnel. The bill substitutes for the rates recommended by the Randall Panel and supported by the Civil Service Commission and the Pressl dent lower rates for all positions at or above the grade 489 We strongly *** that these rates be restored to those proposed in the administration bill (HT 8716). The difference in cost will be trivial in comparison to the viotenes which H.R. 8986 would do to the policy adopted by Congress insuring adhustomer to the principle of comparability. This year provides the first test of the since** of Congress in adopting that policy. The Congress cannot afford to fall in the Beat test. The Congress has an obligation to the Nation to protect the future quelle of the Federal service by continuing to adhere to the principle of comparatdilly so recently adopted.

CONCLUSION

The Members of Congress bear a fearsome burden. The fact that they are the only persons in the entire Federal Government who have the responsiinity for establishing their own salaries is not the least part of that burden. Tide planee them in a difficult and unenviable position. They are bound to be grekenly criticized whatever their decision. But in this difficult situation the Members of Congress cannot afford to ignore the sound advice of the President's Advisory Panel and of leading citizens throughout the Nation. Furthermore, the Taburk quality of the Federal service will be determined in large part by the chick Congress takes now on the Federal salary system.

In the interests of protecting the quality of the Federal servick hug and five the future we urge enactment of the President's salary redmintondatiome live the legislative, judicial, and executive branches of the Federal Government. The CHAIRMAN. Thank you again, Dr. Hartmann

Are there any questions?

(No response.)

Mr. JAY. Mr. Chairman, if I may say a word, I would like the my deep appreciation for appearing here. It is always suona fubreply and the chairman has always been so courteous and geneririz, vt ben ducting these meetings for Federal employees.

The Honorable Robert Ramspecx could not be with me para vah Mỹ his wife's illness, which I think you are familiar A

The weakest link identified in the bill has beer, with, photpak by myspa visory personnel. We would like and hope that the pay for perfha sionals be restored.

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The CHARMAN, is her myking father?

We will now hear from Mr. Paul H. Robbins, executive director of the National Society of Professional Engineers.

M:. LUNCH. Mr. Robbins was unexpectedly called out of town because of illness in his family. If I may, with your permission, I vonid like to read his statement and summarize briefly.

The CHAIRMAN. Very well, you may proceed.

STATEMENT OF PAUL H. ROBBINS, EXECUTIVE DIRECTOR, NATIONAL SOCIETY OF PROFESSIONAL ENGINEERS, PRESENTED BY MISTON F. LUNCH, LEGISLATIVE COUNSEL

Mr. LUNCH. My name is Milton F. Lunch, and I am the legislative ounsel of the National Society of Professional Engineers.

I have with me Mr. Gayle Wright, a member of our legislative staff of the National Society of Professional Engineers.

I will now proceed with the statement of the society.

The socery is composed of over 62,000 members, each of whom safe to engage in the practice of professional engineering under Cable State engineering registration laws.

The national society appreciates the opportunity to appear before >mmittee in connection with its consideration of Federal emvee pay legislation.

“a socery firmly believes that the Federal Government is entitled and should have the best engineering and scientific talent available. •neseve this goal, the Government must be in a position to compete Teeply in terms of salary scales, and must be able to adjust these es mickly in order to meet the changing conditions in the private

Because of this need for flexibility, the national society has strongly etened “egislative proposals for establishing a separate classification Lepersicon system for professional engineers and physical scien

yed in the Federal service. Such a separate schedule, per

Congress to address its specific attention to the needs of eitaði segment of the Federal service, would represent a long wazi u making Government service more appealing to

Se Voceral Salary Reform Act of 1962, while it did not specifier de a separate schedule for engineers and scientists, did

spinciple many of the features of such a separate schedwo "nest ›mportant of these features were (1) establishe spice ple that Federal salary scales should be maintained Svec comparable to mates in private enterprise, and (2) broadenService Commission's authority to adjust Federal rates vc, là, caægeries of employees in short supply. As a result

on Sen, the Civil Service Commission has, in effect, spa, se sedule for engineers in grades GS-5 through ay 'ereves that the principle of comparability was the non son of the 962 act. Not only is it important in anding opiny to Federal employees, but its implementaCoders Government is to attract and retain goy used engineers and scientists.