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(Supplementing the above information, the following communication and tables were received from Mr. Macy :)

U.S. CIVIL SERVICE COMMISSION,
Washington, D.C., May 18, 1964.

Hon. OLIN D. JOHNSTON,

Chairman, Committee on Post Office and Civil Service,
U.S. Senate.

DEAR MR. CHAIRMAN: Supplementing the material on the Classification Act system sent with my letter of May 8, 1964, I am furnishing with this letter parallel tabulations of salary increases and increased salary costs, by levels, proposed under the provisions of H.R. 11049 for the three other statutory systems. The accompanying tabulations show both average pay and cost increases, by levels, for the postal, Foreign Service, and Veterans' Administration medical pay systems, respectfully.

If there is other material that would be helpful to the committee, I shall be very happy to furnish it.

Sincerely yours,

JOHN W. MACY, Jr., Chairman.

Average salary increases and increases in salary cost, by level of proposed postal field service pay rates in H.R. 11049, as ordered reported by House Post Office and Civil Service Committee

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Aggregate cost, including increases for rural carriers and postmasters at 4th-class offices, certain special postal provisions, and Government's expenditure for certain fringe benefits, $229,300,000.

Aggregate cost would be reduced by an amount estimated at approximately $1,200,000 by change in pay computation method, thus leaving an aggregate net cost of about $228,000,000; using 1964 employment base this figure would be about $235,000,000.

Average salary increases and increases in satury cost, by class, of proposed foreign service schedules in HR. 1049, as ordered reported by House Post Office and Cical Service Committee

(Based on June 30, 1983, employment figures of employees paid in accordance with Foreign Service rates in State, Defense, USIA, AD, and Peace Corps]

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Aggregate cost, includmg Government's expenditure for retirement and insurance $1,369,367 Aggregate cost would be reduced by an estimate $300,000 by change m. pay computation methou thus leaving an aggregate net cost of about $1,000,000.

Average salary increases andă incrseases in salary cost, by grade, of proposed Tererans Administration medicine and surgery schedules in H.R. 1104 as ordered reported by Houst Post Office and Civil Service Committer [Based or full-time employment figures, June 30, 1963

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NOTE-Aggregate cost inciucing agency contributions for retirement and insurance in-time empo $9,582.280; including part-time employment $1,52,50

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Senator MONRONEY. The reason for the very great disparity between GS-15 and the GS-16, GS-17, and GS-18 is the fact that the longevity actually has raised the GS-15's to the point where Congress put a cutoff line on GS-16 and even above last time. They do not reflect the higher salaries of appointed people.

Mr. MACY. That is right; the great change occurred because of the application of schedule II of the Federal Salary Reform Act last January which raised the range for GS-15 very close to the fixed ceiling of $20,000.

Senator MONRONEY. Because of the longevity factor built in the step increase.

Mr. MACY. It was due to the number of rates in GS-15 which to a substantial extent do reflect longevity. But even the lowest rate of GS-15 came up close to the GS-16 minimum rate.

Senator MONRONEY. I understand the House bill carries into the legislation compulsory absorption of the cost of the bill. Is that correct?

Mr. MACY. That is correct; I reflected that in the figure of $512 million that I cited. The 10 percent makes it possible to give you the $533 million. Roughly, $57 million is included in the $533 million figure that I gave you.

Senator MONRONEY. You are in favor of that remaining in the bill?

Mr. MACY. Yes; we believe that this will be helpful in continuing the President's program to hold down the level of payroll costs. Senator MONRONEY. How would that be accomplished?

Mr. MACY. This would be accomplished by the Bureau of the Budget through their apportionment process.

Senator MONRONEY. And it would be to try and reduce the numbers so you could upgrade the pay?

Mr. MACY. That is correct.

Senator MONRONEY. The Department would be expected to ask for 10 percent fewer employees. Ten percent would not come out that way, would it?

Mr. MACY. It would be largely absorbed by holding off the filling of vacancies.

Senator MONRONEY. Largely attrition.

Mr. MACY. That is correct.

The CHAIRMAN. Senator Fong?

Senator FONG. Mr. Macy, how far away would you say the present salary scales are from "equal pay for equal work"?

Mr. MACY. As far as that is concerned, the classification structure is adequate. The problem is the discrepancy with respect to comparability. And I think I can quickly state that for grades 1 through 5 the House bill would provide for roughly comparability as of 1963; that from there on up the comparability is between 1961 and 1962. So that we are still running behind in the middle and upper grades insofar as the comparability schedule is concerned.

Senator FONG. So we are concerned here more on a comparability principle rather than equal pay for equal work?

Mr. MACY. That is right. I believe that principle has been built into the grade structure that was approved in the Reform Act of 1962 and that it is now necessary to administratively assure that in taking the classification actions that are authorized that we adhere to the principle of equal pay for equal work.

Senator Foxe. I think you remarked here that the gap is wide down to GS-8.

Mr. MACT. That is right; that is down to GS-S we are running behind in comparability. But in order to provide comparability from GS-8 up we need to raise this ceiling in this compensation house of ours or otherwise we have further compression among the various grades at the top.

If there is action taken, as proposed by the House bill, it will make it possible for us to adjust the pay for the intervening levels so that we can more nearly approach comparability without further compression in those grades.

Senator Foxe. In other words, your ceiling is too low so you haven't enough room for the upper grades?

Mr. Macy. That is right. Some observers of Federal compensation have stated that the Federal compensation structure, as it exists at the present time, resembles a modern house, a solid foundation but a low ceiling. What we are proposing here is that we make sure that the architecture calls for more of a peak on this structure to make it possible for us to properly aline in terms of comparability the grade levels from S on up through executive pay.

Senator FONG. And the comparability gap is the widest up to GS-16, GS-17, and GS-18 because Congress did not take care of them in the last salary increase in the act of 1962!

Mr. Macy. That is right. In fact, the greatest discrepancy is at GS-18. Comparability would place grade 15 at $25.500. However, the level is constrained now to $20.000. That is why in the House bill the percentage of increase is substantially greater for the top three levels than it is for the other levels in career pay.

Senator FoNG. Approximately how many people are involved in grades 16 to 158!

Mr. MACT. Roughly 3,000.

Senator FoNG. And what increase would that represent?

Mr. MACY. It works out to roughly a 20-percent increase in salary for those in those three grades.

Senator FoNG. Do you have the total amount involved?

Mr. Macy. I can provide that for you. I do not have it in my head. Senator FONG. You stated that cost of the increases would be about $533 million.

Mr. MACY. That is correct.

Senator FONG. And how much of that is for those outside of the legislative, executive, and judiciary?

Mr. MACY. 8512 million is the increase cost outside of the legislative, executive, and judicial groups.

Senator FoxG. So those groups only will take $11 million of the $533 million: is that correct?

Mr. MACY. It comes to $21 million.

Senator FoNG. In that is $8.2 million for the judiciary and that includes every person working in the judiciary?

Mr. MACT. That is correct, sir. This would include the clerks in the courts, other support personnel for the judges.

Senator FONG. Just for the judges what would you say?

Mr. MACY. It is $4.9 million.

Senator FONG. And just for the executive?

Mr. MACY. Just for the executives would be $3 million.

Senator FONG. And just for the legislative?

Mr. MACY. $4.1 million for Members of Congress.

Senator FONG. So about $12 million has been set aside just for the legislative, the executive, and the Judiciary out of $533 million? Mr. MACY. That is correct.

Senator FONG. Thank you.

Mr. MACY. Thank you.

The CHAIRMAN. You have found that during the last 2 years that the cost of living has gone up a great deal; is that not true?

Mr. MACY. The cost of living has gone up in the last 2 years something less than 2 percent.

The CHAIRMAN. Do you not find that private industries have increased salaries considerably during the last 2 years for those in lower areas of employment?

Mr. MACY. Yes. That is really the findings of the Bureau of Labor Statistics survey that in comparing salaries from time to time there has been roughly a 22- to 3-percent increase in the salary level for positions like those in the lower levels of the Federal service. That is what is reflected in this amount.

The CHAIRMAN. That being so, the House bill reflects that and cares for that above what was recommended at first by the administration. Mr. MACY. That is right. The House bill endeavors to overcome the timelag with respect to the lower levels. And as I have testified, the comparability gap does continue between GS-8 and GS-18, but that it is extremely difficult to overcome that gap until we do something about the very top rates.

The CHAIRMAN. Any other questions? Senator Monroney.

Senator MONRONEY. What is the increase in grade 15? I note that this is where the disparity occurs and according to the pay table of the two previous pay increases the 15, if I read it correctly, had an increase of 8.1 and then effective January 1964, had a pay increase of

8.2.

Mr. MACY. The increase at grade 15 is 5.5 percent.

Senator MONRONEY. This time?

Mr. MACY. About $922.

Senator MONRONEY. And then the increase of the 16 and 17?
Mr. MACY GS-16 is 19.2 percent.

Senator MONRONEY. Over the present?

Mr. MACY. Over the present schedule which is really schedule I in the Salary Reform Act of 1962.

Senator MONRONEY. This makes up for the disparity that they did not receive in the January 1964 increase.

Mr. MACY. Exactly.

Senator MONRONEY. It was pushed up 8 percent to a total of 16.3 percent over former salaries.

Mr. MACY. That is correct. And GS-17 is 20.3 and GS-18 is 22.5. Those higher percentages are to overcome the substantial gap that has existed between the level for these jobs and a level that constitutes a projection of the comparability line. I think it is important that I make it clear that even these rates based upon the surveys that the Civil Service Commission has conducted do not represent comparable rates with private enterprise.

It is very difficult at this level of responsibility to arrive at any kind of exactitude in measuring comparability. Consequently, we have

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