Because of this, we strongly endorsed the proposed salary schedule included in the administration's original bill, H.R. 7552. While this bill would not have provided full comparability for Federal engineering salaries, it would have at least prevented Federal rates from falling further behind those of industry,

Unfortunately, the bill presently pending in the House, H.R. 11049, is seriously deficient in this regard. Attached to our prepared statement is a comparison of present Federal engineering rates with those proposed in H.R. 11049, and average industry engineering rates of i year ago. A glance at the dollar increases which this bill proposed for the various grade levels should be adequate to demonstrate why we feel larger increases should be provided for grades GS-7 and above. From an increase of $340 at the GS-5 level, this bill would provide progressively smaller increases to a low of $185 at the GS-11 level. The average grade for engineers, GS-12, would receive an increase of only $310 at step 1, and $295 at step 4.

Because of this, the society recommends strongly that this committee report a bill providing increases for the middle and upper grades which would correspond with those proposed in the original House bill,

H.R. 7552.

In addition. Mr. Chairman, we would like to comment brief y upon a particular provision of the present House bill which could well fave the effect of denying most or all of an already inadequate increask V thousands of engineers, scientists, physicians, accountable, and QAL groups of employees most in need by the Federal Government. I refer, Mr. Chairman, to section 123 under "Miscellaneous Prov.SOLS" which would allow the Civil Service Commission on we etimai va Quik of the bill to reduce or eliminate the special, above-minimum, peaks of pay now authorized for hard-to-hire categories under section VA of the Federal Salary Reform Act of 1962.

In testimony before the House committee, the Chairman of the Civil Service Commission explained that this provision was hooÇoç W pierent these categories of employees from receiving a double maisot, que through action mder section 504, and one through legis atvor presently being considered. Wade this argument would appear to have solce logie on the surface, we feel that the real question is not now tubby raises an individual has received, but whether he is adequately guić. From a comparison of Bureau of Labor Statistics figures of private industry rates with those proposed in the House vill, it is citar that any amount cut from Federal engineers vises will put them that much farther bening engineers employed in private industry, We mus1. therefore, respectful y urge that this provision not be included in my bill reported by this committee.

A fine poin we would like to make. Mr. Chai inat.. comerus cerizit inequities resulting from passage of the 1962 act. The situation vo which I refer resulted from the fact that prior to passage of the Fed eral Salary Reform Act of 1962, employees promoted from one Class fiec graue to another werk guaranteet & minimal sandy increase egitia alent to one-step increase of the grade from wiser they were pro moted. nger the new jav ni guaranteed salary notast Vi FR500 to two-ster increases, wifi. Issu tua? many engineers Mic other higher-grade empiovees who carte grade promotions shortly before the effective tale of the act found that their tota sainty was less than

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that of others similarly situated who had not earned grade promotions until after the act was passed. In some extreme cases, these individuals found that they would actually be better off financially had they not been promoted at all.

A number of bills have been introduced to correct this situation. Briefly, these would provide that employees be allowed to retroactively postpone their grade promotions until after the effective date of the 1962 act, thus assuring them of at least a two-step raise, rather than the one-step raise which many received.

We strongly urge, Mr. Chairman, that corrective legislation of this type be given favorable consideration by this committee, either as a separate measure or as part of a pay bill, as deemed appropriate. While we do not believe the cost of such corrective action would be significant to the Government, we do feel that it would demonstrate the desire of Congress to provide equitable salary treatment for all Federal employees.

This concludes the prepared statement, Mr. Chairman. I will, of course, be happy to answer any questions which you or other members of the committee may have on our comments, or to provide any other information which may be desired.

Thank you for your consideration of our views.

(The tabulation referred to in the statement follows:)

Effect of H.R. 11049 upon Federal engineers

The CHAIRMAN. The next witness is Dillard B. Lasseter, executive officer of the Organization of Professional Employees of the U.S. Department of Agriculture.

You may proceed, Mr. Lasseter.

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

Mr. LASSETER. My name is Dillard B. Lasseter. I represent the Organization of Professional Employees of the U.S. Department of Agriculture (OPEDA). We have almost 7,000 members who are located in the 50 States, various territories and possessions, and in a number of foreign countries. They are engaged in the scientific, professional, technical, and administrative work of the Department.

These employees are in the classified service, and 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 and professional employees. I appreciate this opportunity to do so again. I especially appreciate the opportunity at this time because I wish to go on record solidly in support of the need to follow through on the concept of comparability of Federal salaries with salaries being paid for comparable levels of responsibility in private industry. To do this, special emphasis needs to be placed upon increasing the compensation of professional employees, particularly those in the higher grades. My statement will develop and support this position.

OPEDA strongly endorsed and supported the Federal Salary Reform Act of 1962. The principle of comparability between Federal and industry salary scales, which was the key feature of that act, is one which ŎPEDA has worked toward for many years. This principle, if fully and consistently applied, would give a measure of relief and recognition to that important segment of employees who carry the burden and responsibility of doing the scientific, professional, technical, and administrative work of the Government.

The 1962 act, in establishing the principle of comparability, was a step in the right direction. Except in the lowest grades, however, comparability remains to be achieved. I appear today to urge enactment of pay adjustments needed to equalize pay scales between industry and Government, in line with the principles adopted by the Congress in the Federal Salary Reform Act of 1962.

The Bureau of Labor Statistics, in its first annual review of statutory salaries under that act, has found that industry salaries in the winter of 1961-62 were consistently greater (except in the very lowest grades) than those prevailing for the Federal employee, even though the basis of comparison is after the second step of the salary reform took effect last January 1. When consideration is given to the finding that industry salaries are increasing at a rate of 2 to 4 percent per year, the difference between industry and Federal salaries as of January 1, 1964, are even greater than the amounts indicated in the

survey.

The most significant finding, from the viewpoint of OPEDA, is that the gap between industry and Federal salaries widens steadily as the GS grade increases. At GS-3. Federal salaries lagged bellind the salary in comparable jobs in industry by only 2 percent. At grade GS-3, the bottom rung of the professional ladder, a gap of 3.2 percent was found: at GS-11, 5.2 percent; at GS-13, 7.4 percent; and at GS-15, 9.6 percent. The BLS report shows salaries in the top three grades in the classified civil service to be one-fourth lower that salaries for comparable positions outside the Government. I emphasize again that these comparisons are between Federal salaries as they stand after the increase of Jamiary 1. 1964, and industry salaries almost 2 years ago.

The advantage of private employment over Federal employment in the higher grades is even more pronounced when other beneils available to many top industry employees are considered. These include annual bonuses, paid up insurance, stock options, deferred con pensation, and many other advantages other than salary. The salary equiva

lent of these benefits is substantial, especially when arrangements can be worked out to avoid or defer income tax on them.

The gap in salary between top level scientific and professional people in Government and those with comparable jobs in private employment is a product of many years of inadequate emphasis to higher graded positions when salary adjustments have been made. The OPEDA believes it is time to emphasize what has happened in recent years. One consequence of this policy has been a gradual erosion of the real income received by Federal employees in the higher grades. The 1962 act went only part way to correct this situation.

The loss in real income may be seen in the accompanying table, which compares Federal salaries as they stood on January 1, 1964, with the salary required to restore the purchasing power of 1939 salaries in the same grades.

Federal salaries up through grade GS-5 provide the same or greater purchasing power to their recipients than did 1939 salaries in the same grade. This is as it should be in a growing and increasingly affluent economy. Indeed, we should expect not just maintenance of purchasing power, but a substantial growth in real income since before World War II. However, Federal salaries in grades GS-6 and up offer less buying power today than 25 years ago, and the lag becomes steadily more pronounced as the GS grade increases. A beginning GS-9 today can buy with his salary 11 percent less goods and services than he could have 25 years ago. At grade 13, the loss is 21 percent; at grade 15, 32 percent.

has

The members of OPEDA are in grades GS-5 and up. This table indicates the extent to which the economic position of this group deteriorated since pre-World War II. We say "as a group" because many individuals have received grade promotions and step increases which offset in varying degrees the rise in living costs and taxes. Another way to examine what has happened is to consider the question from the standpoint of "compression" of salary differences between the various grades. Since 1939 there has been a compression of the differences in salary between the higher and the lower grades.

In 1939 the beginning salary of a grade 15 was 393 percent above the beginning salary of a grade 3. By 1949 the percentage had declined to 277. The increases of January 1, 1964 increased this percentage to 303.

As I stated earlier, the OPEDA reiterates its support of the concept of comparability in civil service salaries to salary levels being paid in private industry. However, OPEDA believes this concept of comparability should be applied effectively and currently to all classified grade levels. The OPEDA believes there is not a reasonable basis for perpetuating disparities between grades, such as those mentioned earlier. Occupants of higher grades should have available to them the prospect of worthwhile increments in salary within their grades. The grade 18 should receive in-grades and longevities on a basis comparable to other higher graded positions. Also, there should be enough salary difference between the higher grades so that after serving in a grade for 5 to 10 years, and an employee is promoted, the increase in

financial return will be more realistic in relation to the demands of the higher graded position.

It is within the higher graded positions that Government policy is hammered out. Also, these positions represent key levels of administering the programs of the Government. The occupants of these positions represent years of specialized training and experience. It is essential that these positions attract, and retain, the most competent scientists and administrators available. For that reason the OPEDA believes there should be no reluctance in making suitable adjustments in salary levels for higher graded classified positions.

SUPPLEMENTARY STATEMENT

From the foregoing statement it is clear that the OPEDA supports the classified salary adjustments proposed by the administration. The OPEDA does not support the House bill, H.R. 8986 unreservedly because it does not respond to the concept of comparability which has been adopted by, and is the recognized policy of, the Congress and the Government. On the contrary, H.R. 8986 would adjust compensation in certain grade levels above the amount which official studies have indicated to be necesary to maintain comparability. We do not need to emphasize, therefore, that H.R. 8986 will contribute to a further erosion of middle and upper grade salary levels in relation to the goal of comparability.

However, should the Congress determine that legislation somewhat comparable to H.R. 8986 should become law, we strongly recommend that at least two adjustments be made. Under the salary levels proposed in the bill, the beginning salary levels of grades 2 through 11 are from 8.6 percent (grade 2) to a high of 11.6 percent (grade 5) above the beginning salary of the next lower grade. However, beginning with grade 12, there is a considerable increase in the difference, it being 19.3 percent in the instance of grade 12. Since grade 11 is recognized as the "journeyman" professional grade, the grade at which employees begin to function with less direct supervision and more independent discretion and judgment, it is recommended that the substantive increase in beginning salary be moved back to include this grade. To accomplish this, we recommend that the first step be $9,200 for grade 11 and step 10 be increased to $12,200.

We also recommend that five steps be provided for grade 18. We see no justification for denying in-grade steps to this grade any more than any other classified grade. Providing in-grade steps for this grade would also make it possible to remove some of the "compression" that the bill provides in the upper three grades. For example, the top of grade 16, the top of grade 17, and the base (and top) of grade 18 would be seperated by only $55 to $325. This situation should be corrected.

Thank you for the privilege of presenting this statement to your committee.

The CHAIRMAN. Thank you, Dillard. Your views will be carefully examined by the staff and the committee. The table attached to your statement will be placed in the record at this place.