The new dollar units were obtained by multiplying each of the revenue units for the classes of office and key positions by $55.89.

For example:

36 times $55.89 equals $2,012.04.

190 times $55.89 equals $10,619.10.

Individual postmasters would not have to adjust their receipts and then match them against the requirements for class of office to determine their standing. Instead, they would receive from the Controller's office a report of their gross annual intake of revenue. This gross intake, including money order fees, would then be matched against the announced basis for the different classes of office and key positions. For example, if a post office received in 1963 gross revenue of $43,224, he would know that he would fall in the second class and that he was closer to key position 25 than to key position 27 for salary level ranking purposes. Currently, the gross figure of $43,224 would have to be adjusted by the discount factor for the year and then matched against the factors for class and level. Not only will discontinuing be eliminated for each individual office but also we would not have to make studies as to what the fair discount rate should be each year for each class of office. Furthermore, our published records of receipts and classes of offices would give a true picture to the public of the full undiscounted monetary volume of our postal business.

In addition to shifting from a receipts base to a revenue unit base, H.R. 11049 also proposes to shift the dates for classifying offices. At present, classification of office is based on receipts earned in a calendar year. However, almost all other accounting dates pertain to the end of a fiscal year. H.R. 11049 would shift the accounting for total receipts to a fiscal year base. Salary changes for postmasters following the annual review of their positions would then become effective as of the beginning of the pay period following January 1, instead of July 1 as at present. This should result in some savings in administrative costs.

2. Compensation of postmasters in fourth-class post offices

Last year during the course of hearings on Postal Service and Federal Employees Salary Act, Mr. Day, then Postmaster General, and I presented the need for a substantial salary increase for our lowest paid employees. Our postmasters in fourth-class post offices receive, today, a pay rate that is much less than the pay of janitors, laborers, charwomen, elevator operators, and others needing little or no skill and who have absolutely no financial, postal, or community relations responsibilities. In terms of their hourly rate, they are among the lowest paid employees in the entire Federal civilian service. In order for these postmasters to receive the minimum wage of $1.25 per hour we have had to reduce their minimum number of hours of daily service. For example, if the postmaster receives $857 a year, the minimum daily number of hours of duty for the postmaster is 1 hour and 45 minutes.

As you can readily see, that is no way to run a post office. First, the hours of service of a post office should not be tied to the salary received by the postmaster but to the postal service needs of the community. If the needs require at least 4 hours a day of service, we ought to provide 4 hours a day of service.

Secondly, I believe it is obvious that we ought to pay any postmaster a rate which will recognize the requirements and responsibilities we place on him. Surely he should not be our lowest paid employee. Surely he should rate above a clerk.

Last year, as a first step toward reforming the pay treatment accorded to postmasters in fourth-class offices, we proposed a new wage schedule, using as its base the minimum wage of $1.25 per hour and with minimum reqiured duty of 2 hours a day. This small beginning, nonetheless, would have resulted in about a 26-percent-average increase for this group of employees. That is how far behind they had fallen over the years. However, the bill that was finally enacted-the Federal Salary Reform Act of 1962 only granted this group a flat 10percent increase in schedule I, and another 5 perecnt in schedule II, postmasters in fourth-class post offices still are inadequately paid.

H.R. 11049, which embodies the Presidents' pay recommendations, proposes an entirely new approach which we think is eminently fair. It is fair to all since it puts fourth-class postmasters on a par above the typical clerk and into the postmaster pay category.

The proposal in H.R. 11049 is to:

1. Eliminate the fourth-class salary schedule entirely.

2. Assign each postmaster at a fourth-class office to the lowest PFS level for postmasters. That is level PFS-5.

3. Pay these postmasters a pro rata amount of the annual rate for PFS 5 which will equate with the postal needs of the patrons of that office. For example, if the service needs of that office require 4 hours a day of operation, then the postmaster would receive one-half the annual salary of PFS-5 on the assumption that an ordinary business day is 8 hours. The workweek would still be Monday through Saturday, or 6 days a week.

4. Continue the allowance a postmaster receives for rent, light, fuel, and equipment. However, the 15-percent allowance would be based on step 1 of PFS-5 rather than any other step rate which the postmaster may have earned for time in his level. Further, this 15-percent allowance would not go automatically to the postmaster. Instead, the Postmaster General would have the option of either furnishing the necessary facilities or giving the postmaster the allowance if we cannot furnish the facilities. This is a necessary change in that it can only result in the use of better quarters for the conduct of postal business.

3. Fees for special delivery mail

In our first-class post offices, special delivery mat is delivered by letter gr riers or special delivery messengers. They receive no fee for delivering this mail since they are either on an hourly or annual pay cheque. The pay they receive is unrelated to the fee on the letter or the number of pieces they deliver.

In second- third-, and fourth-class offices the Department has been authorized to pay persons who deliver specials ar amount yelled by law. That lav, which has not been changed sine Maret 2 1852, provides these senedjes: (1) Nine cents for first-class mall weighing not more than 2 pounds. (2) Ter cents for other mail weighing not more than 2 pounds.

(3) Fourteen cents for mall of any class wegning more than 2 pounds, but not more than 10 pounds.

(4) Twenty cents for mail of ary class weighing more tuar 16 pounds. Because the fees prescribed by law have not changed since 185 in sual offices we have not beer ale to give the full serrig that a petro exjerne it al cases to be gel to special delivery ma £ 10087* & suite for al errand is ridictivas. If you send a final boy Govt to the eorser bakery for a loaf of bread you usually give him a dime for the ePTENÉ Here they is rat oftentimes Lappens in a small office when a special conA İL

It is given to the rural carrier if the delivery J8 OL Dis roule
The postmaster teens the patron and aske I to come to the office
The postcaster gelisen the jetter jener in the gam

in at of uni wzene gera around mading gener
pay enouri for prompt delivery
and specials were 10 sms more
received nine-tenths of the extra cust

H.R. 11049 provides a means for increasing the fee payable to persons delivering specials. That section would permit the Postmaster General to declare what the fee might be at any period of time provided the fee does not exceed the postal rate for special delivery. I think such authority is administratively sound in that it gives us latitude to obtain service, but within a standard set by Congress.

There is one additional section in H.R. 11049 which I believe is worth noting at this time. This section-114-provides a means for adjusting the pay of senior employees, in certain limited situations, where they are not receiving as much as their juniors. Because employees in PFS-4 and below received an extra pay step on conversion to the new pay schedules of Public Law 87-793 last October 1962, we now find some situations where subsequent promotions above PFS-4 have resulted in junior employees being a step ahead of their seniors, that is, employees promoted before October 1962. This new section allows the Postmaster General to adjust the senior employees in PFS-9 or below under these conditions: (1) The senior employee was promoted to his level between July 9, 1960, and October 13, 1962, and is in a step below that of the junior employee, (2) both employees are in the same field installation, and (3) both positions, titles, and levels are identical. If the bill is passed we intend to apply the measure as prescribed, but only to situations where the junior employee was promoted directly from PFS-4 to a higher salary level and by the advancement of the senior employee by not more than one step.

That, Mr. Chairman and members of this committee, represents our thoughts on the pay changes needed to update the postal field service. You will note that most of my testimony has dealt with postal administration matters and not with salary schedules, as such. As we move along the path of comparability with private enterprise and the technique for the application of comparability becomes a settled issue, we hope we can spend more time on the improvement of postal salary administration within the framework of the precepts of Federal Salary Reform Act of 1962.

Mr. MURPHY. We are very pleased, Mr. Chairman, to have this opportunity of appearing this morning and to endorse strongly the need for a salary increase for postal employees and for Federal employees, as reflected in the BLS figures of 1962, and to some extent, those of 1963.

This particular salary bill, we feel, is very urgently needed because the salaries of postal employees have, once again, fallen considerably behind, when based upon the standards which the Congress and this committee set up in the year 1962 when it passed the Federal Salary Reform Act in October of that year.

Very briefly, insofar as the postal field service is concerned, the proposed pay adjustments range from a 2.4-percent increase to a 22.7percent increase over the current rates.

The increase at level 4, which is our most numerous grade, our clerkcarrier grade, is about 6 percent. The increase for the top pay levels is sharpest, because of the catchup adjustment which is needed there. As you will recall, the Salary Act of 1962 placed a $20,000 ceiling on career salaries. This meant that while most postal employees received a pay increase when schedule 2 of the act was effected January 4 of this year, employees in PFS levels 18, 19, and 20 received no increase at all. With a higher ceiling on PFS levels to $24,000, 445 catchup adjustments can be made in the higher pay levels.

I think it is well to point out at this point, Mr. Chairman, that the increase which is called for in level 4, the first four levels of H.R. 11049, which is the bill that I will speak mostly about now-that is the bill which has just recently been reported out favorably by the House committee-in the first of four levels, we provide almost full, complete comparability, based on the 1963 figures which are the latest figures available to us. Above that level, you provide something

less than comparability, and I do have a chart here, which has been developed, which I would be happy to have entered into the record. The CHAIRMAN. This will become a part of the record. (The chart referred to is as follows:)

Comparability paylines for 1961, 1962, and 1963

In October 1962, incumbents in this level were given an extra step worth 3.3 percent. * Employees in this grade received no pay increase in January 1964.

Mr. MURPHY. Yes, sir; this chart will show the degree to which full comparability is lacking above the basic grades.

However, just to tell you what is in this chart, as you get above level 4, which is 99.5 percent of comparability, level 5 is 98.5 percent, level 6 is 97.5 percent, and it decreases all the way up to PFS level 20, which is 92.8 percent of comparability.

So, between level 4, PFS-4, and level 20, you have a descending scale of comparability from 98.5 percent down to 92.8 percent.

Senator FONG. Is the classified list the same?

Mr. MURPHY. I think it is roughly the same, Senator Fong. I don't have the classified with me. I have just the postal field service schedule. Mr. Jones, I think, is providing the list to that effect to the committee for the classified.

The CHAIRMAN. It is nearly the same, but it varies a little.
Mr. MURPHY. Yes; it varies a little.

Senator MONRONEY. Mr. Chairman, do you want to interrupt him as he goes along?

The CHAIRMAN. Yes.

Senator MONRONEY. When you pass the first four grades, which are blue collar, and measurable against large bodies of men in wage schedules, isn't it almost impossible to check the 18's, 19's, and 20's against the comparability? I mean, one corporation may have growth rate, but low pay, and another one may have maturity and high pay. Yet people are glad to go to work in either case, without too much reference to comparability, because there are very few jobs of managerial type available in old and well-established substantial firms.

Mr. MURPHY. Yes, I would say that is so Senator. However, I would also indicate that the figures I am quoting here are based upon the preliminary 1963 BLS figures, and even those figures do not make an attempt to equate full comparability of the supergrades in the Government with counterparts in private industry. They make no attempt to do that.

Senator MONRONEY. Who calculated the 92.8 percent comparability? Mr. MURPHY. This is based on the 1963 figures on the pay line that we have in the postal field service schedule, which equates the GS-11 with PFS-11 and PFS-4 with GS-5.

Senator MONRONEY. Against the comparability in private enterprise?

Mr. MURPHY. This is worked out-you mean against comparability in private enterprise? This is worked out by the Civil Service Commission, the Bureau of the Budget and Bureau of Labor Statistics, based upon the formula for the payline that was voted in 1962.

Senator MONRONEY. I am not saying they didn't do the best they could. What I am trying to say is it's very hard to establish direct comparability.

Mr. MURPHY. Yes, sir, I would agree with that.

Senator FONG. In the classified, they have gone up to GS-15 and stopped?

Mr. MURPHY. Yes, that is so.

Senator FONG. Where do they stop in there?

Mr. MURPHY. Well, actually the classified, I don't think, Senator Fong, has provided full comparability in H.R. 11049 through GS-15. They have applied the 1962 rates of the BLS through GS-15 but they have applied the 1963 rates through GS-5, but between GS-5 and GS-15, you are still operating in H.R. 11049 under the 1962 rates. Senator FONG. They don't contemplate to attempt comparability over the GS-15; do they?

Mr. MURPHY. That is correct, sir.

Senator FONG. And PF is what?

Mr. MURPHY. That would be 18, 19, and 20. The supergrades. However, I do have another chart here also, which would indicate in relation to some questions that you were asking on last Thursday, Senator Fong, about the degree to which the percentage increases were given in grades PFS-5 through PFS-15. I have a chart here, which, with the chairman's permission, I will also insert in the record, which shows the percentage increases that have been voted, and would be voted, were H.R. 11049 to be passed this time, to all grades in the postal field service since 1962. And it shows that the percentage increases are pretty even for all grades.