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Salaries have not been kept in pace with these increases. The starting salary of a custodial laborer, for example, has gone from $2,870 to $3,670 since 1951, or a rise of about 28 percent. The combined price advance and the productivity increase are nearly double the increase of a custodial laborer's salary. Salaries for other positions in levels 1 to 3 have increased about the same percentage. Raises provided in the Morrison bill, H.R. 9531, more nearly reflect the need of these custodial workers.

The compensation of comparable positions in private industry has advanced somewhat beyond the rates of pay now in effect in the field service of the Post Office Department. The average hourly earnings for the positions of janitor, laborer, and fireman in private industry are stated in table 1, appended to this statement. The earnings reported are averages in large cities in different sections of the country.

Earnings reported for the position of guard further point up the disparity between the pay in industry and in the postal field service. Table 2 states the average hourly earnings of guards in five metropolitan areas. The Federal average to be compared with these figures is the average of $2.20 for level 3 in which these guard positions are classified. In addition to average earnings in manufacturing a further significant comparison is made with the earnings of guards who work for public utility companies in those cities. In each city, the industrial average is well above the Federal Average.

The problem, as we see it, is for the Government to recognize the fact that it is in competition with private industry. Industry places a high value on skill and experience and unless the Government also recognizes that principle to the fullest measure possible it will continue to lose good employees to private employers.

If the Government is to meet successfully the competition from industry, it must pay reasonably good rates. We believe the Morrison bill would provide rates which will recognize the value of good workers and the need for retaining their services.

Thank you, Mr. Chairman, for accepting this statement of our views on this important subject.

TABLE 1.-Average earnings of 3 custodial positions in industry in selected metropolitan areas as stated in BLS occupational surveys

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Excludes premium pay for overtime and for work on weekends, holidays, and late shifts.
Source: Based on official statistics of U.S. Bureau of Labor Statistics and Civil Service Commission.

1

TABLE 2.—Average earnings of guards in industry in selected metropolitan areas 1

City

Average hourly earnings

Manufacturing Public utilities

Detroit...

Minneapolis-St. Paul.
Pittsburgh..

San Francisco-Oakland.

St. Louis...

1 Positions are in postal level 3 for which average pay is $2.20 an hour. Source: U.S. Bureau of Labor Statistics, Occupational Surveys, 1961-62.

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Hon. Toм MURRAY,

CHAMBER OF COMMERCE OF THE UNITED STATES,
Washington, D.C., May 2, 1962.

Chairman, Committee on Post Office and Civil Service,
House of Representatives, Washington, D.C.

DEAR MR. CHAIRMAN: The Chamber of Commerce of the United States urges the Committee on Post Office and Civil Service to table consideration of any general Federal pay raise at this time.

It is the considered opinion of the chamber's board of directors, that a general pay raise for Government employees at this time would be basically inconsistent with the President's strong admonition to both labor and industry to hold down wages and prices. It is reasonable to expect that a general increase in Government pay would reenforce a pattern in industry for another wage and price spiral that could easily unleash vast inflationary pressures on the entire economy and further impair our imbalance in international payments.

The chamber endorses the principle of reasonable comparability between salaries and employee benefits in Government and those in private industry. Further, the chamber recognizes that occasions arise when selective salary increases must be made to obtain the services of highly skilled personnel when such talent may be in short supply. Thus, the selective approach, which would have as its basic purpose the easing of inequitable wage discrepancies between the public and private sectors, is the rational approach provided the timing is appropriate.

The razor-thin surplus which the President contemplates for the 1963 budget cannot conceivably support an across-the-board pay raise for Federal employees. It is estimated that the pay proposals most favored by the Government employee union officials would cost $1.8 billion annually if enacted. The restraint which the President is urging on labor and industry becomes meaningless if the Nation's largest employer, the Government itself, does not set a proper example. In fact, the small projected surplus for fiscal 1963, it is now widely believed, will in fact turn out to be a deficit. Any across-the-board pay raise would increase the probabilities of a deficit.

The regular Federal payroll for full-time civilian employees in the executive branch is now running at a rate of over $14.2 billion a year. As of January 1962, there were 2,428,691 full-time employees on the executive branch rolls, and the budget for fiscal year 1963 contemplates an increase to 2,528,815. Should Congress grant the administration's request it would add over 100,000 more Federal employees to the rolls by the end of June 1963, which at the June 30, 1961, median rate of $5,335 per employee, would cost an additional $0.5 billion. The executive branch payrolls would then exceed $14.7 billion a year, not including the inevitable up-grading of personnel which always occurs. From this it can be readily noted that each percentile point, which might be applied in the cast of any across-the-board increase, would amount to approximately $147 million.

Apart from the compelling reasons set forth above as to why a general pay raise for Federal employees should be rejected at this time, certain claims have been made by pay raise proponents which are contradicted by information available in official Government reports. In substantiation of this statement, the following information is submitted for your consideration:

(1) Pay raise proponents contend that Government salaries are inadequate to retain the services of trained personnel. Proponents even go so far as to state that essential services face collapse, because of the high percentage of employee departure from the Federal service. While most competent individuals seek to improve their positions, the rate of employee turnover in Federal service is considerably lower than it is in private industry, so much lower in fact that it indicates in an emphatic way the attractiveness of Federal service. A review of Federal Employment Statistics Bulletins, published monthly by the U.S. Civil Service Commission, for the period January 1958 through December 1961 (the latest issue), discloses the following monthly "quit-rate" averages per hundred employees for the 4-year period:

All Federal employees (including postal workers)
Postal workers__.

Manufacturing industries' employees---

Percent

0.75

.56

1. 11

It cannot be argued that the quit-rate of Federal employees has been on the rise during the last year or two-in fact, the Government rate improved with relation to the industry rate in 1961, when the all Federal employee rate remained constant at 0.75 percent; the postal workers rate decreased slightly to 0.55 percent and the industry rate rose to 1.22 percent. The quit-rate percentage for all Federal employees includes employee transfers in each instance cited here. Thus, it will be noted that the quit and transfer rate of all Federal employees during the 4 years was only 68 percent that of the quit-rate in industry, and the postal employees rate only 50 percent of the industry rate.

(2) Pay raise proponents frequently argue lack of opportunity for advancement in Federal service. A comparison of grades of classified employees for fiscal years 1956 and 1960 when the average number of employees aggregated 950,277 and 972,923, respectively, indicates a substantial promotional pattern in every grade above GS-3 except in grades GS-7 and GS-10. At the same time the number of employees in grades GS-1 through GS-3 declined 30 percent. The percentage increases in grades GS-11 and above run the largest, with GS-11 showing a 41 percent increase; GS-12 about 46 percent; GS-13 about 56 percent; GS-14 about 66 percent; and GS-15 about 65 percent. The number of positions in the supergrades increased over 200 percent. We trust that the promotions were based on merit, despite a recent criticism of one agency that promotions were granted merely as a device to upgrade emplovees' salaries without increased responsibilities. To a large extent Federal employees have benefited by aggressive promotion policies operating within their agencies.

(3) Postal employee leaders contend that the positions of postal clerks and carriers lack comparability with positions in the private sector. Quite obviously, these positions are unique so far as the absence of absolute counterparts in industry might be concerned, but it stands to reason that each of these positions involves defined levels of skills, responsibility, education, physical fitness, and maturity. These are all attributes which are common to other positions in Government as well as to positions in private industry. These represent comparable standards which can be identified with positions now existing in private industry. The fact that it may be necessary to segment the duties and responsibilities among two or more related jobs does not prevent a fair evaluation of postal positions. Comparability can be determined if it is so desired.

(4) The contention that Government employees generally do not earn as much as their counterparts in private industry appears difficult to reconcile with available data. The U.S. Department of Commerce, Survey of Current Business, for July 1961, in table No. 52 reports the full-time earnings for all employees in the United States. While using different criteria for determining the average annual salary of Federal civilian employees than those used by the Civil Service Commission, this report is consistent in the evaluation and comparison of earnings in both the public and private sector. The average annual earnings of

Federal civilian employees compared with the functional grouping of privately employed workers are reported as follows:

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(5) The need to keep pace with the cost of living is frequently advanced in support of employee pay raises. In this respect, according to information furnished by the Deputy Director, Bureau of the Budget, to Senator A. Willis Robertson in a letter dated March 1, 1962, the Consumer Price Index increased 113 percent between the period of 1939 and July 1, 1960, the date of the last Federal pay raise. However, in contrast to this increase, the pay for the clerkcarrier group of the postal service, which represents approximately 90 percent of the total employees of the postal service, had increased 179.1 percent. Similarly, the pay for the beginning grade in the classified service, principally messengers, had increased by 152.8 percent and the entry level for professional employees at GS-5 had increased by 117.3 percent. The Deputy Director advised also that the Consumer Price Index has increased only 1.3 percent between July 1, 1960, the date of the last employee pay increase, through January 1962. From the foregoing information, it will be noted that wage increases of 90 percent of the postal workers exceed the cost of living increases based on 1939 indexes. With regard to classified employees, the Civil Service Federal Employment Statistics Bulletin for October 1961 reveals that on June 30, 1961, 48 percent of the classified workers were employed in grade GS-5 and below. Thus it follows that the increases of this group likewise exceed the cost-of-living increases since 1939. If any case is to be made of the cost-of-living factor, it can only prevail with respect to employees in the higher salary grades. Analysts, furthermore, are increasingly agreed that basing wages on cost-of-living changes creates a built-in inflation policy into our economic system.

(6) Government employee union leaders frequently select, as representative earnings in industry, highly priced trade union wages and salaries of professional positions outside the Government, and then endeavor to compare these with average civil service salaries. Two important factors are often overlooked— one, that the trade union jobs fall generally in the so-called blue-collar or wage board classification in the Government and, therefore, are presently fixed on prevailing local wage rates; and, two, that the number of professional positions in the Federal service represents only a small percentage of the total. U.S. Civil Service Graphic Presentation of Federal Employment, dated March 1961, reports that 15 percent of all white-collar positions are professional. While it is believed that the next such report issued by the Civil Service Commission will show a substantial percentage increase to reflect the recent hiring of additional scientists for our expanded scientific efforts, the great bulk of Federal employees will continue to be nonprofessionals. On the other hand, positions below the level of GS-4, which comprise 25 percent of all white-collar jobs, pay salaries equal to or greater than those of like comparability in private industry-a fact disclosed by the Bureau of Labor Statistics recent national survey of Federal positions.

Again, you are urged to reject action at this time on a general pay raise for Federal employees.

I would appreciate your making this letter a part of the official record of your current hearings on Federal pay raise legislation.

Cordially,

THERON J. RICE,

84357-62-pt. 1- 45

Legislative Action General Manager.

NAVAL CIVILIAN ADMINISTRATORS ASSOCIATION,
NATIONAL HEADQUARTERS OFFICE,

BOSTON NAVAL SHIPYARD.
Boston, Mass., May 17, 1962.

1. The Naval Civilian Administrators Association comprises over 600 key civilians, all of whom have professional or administrative supervisory assignments in the 19 establishments where chapters of the association are located. These include naval shipyards, supply depots, naval aviation activities, and naval district headquarters. We have very few members rated below GS-11, and more than half are grade GS-13 or above; and their assignments are such as to make them keenly aware of the havoc wrought in the classified civil service through inadequate salary schedules.

2. Some of the objectives of our association are:

To promote the efficiency of the various shore establishments of the Department of the Navy.

To cultivate and implement cooperation between departments, divisions, sections, and units of the Naval Establishment.

To protect the legitimate interest of civilian administrators and their relationship and responsibility to management.

To take an active interest in the welfare of subordinates and to maintain an attitude of fairness and tolerance in all dealings.

To promote an interchange of information which will be helpful in the accomplishment of the foregoing objectives and which will promote the interests of the individual members of the association.

3. This association feels that the legislation proposed by Mr. Murray (H.R. 10480) recognizes and offers sound solutions to the problem of pay inequity as it applies to classified civil service employees.

Many studies made over a period of years have proven conclusively that the salary structure for employees covered by the Classification Act has not maintained a balance between the upper bracket civil servant and his counterpart in private industry. The situation appears just as one sided when the salaries of classified employees are compared with those of upper level wage board employees.

A simple example will illustrate this situation. For several years the rating of GS-12 has been considered the equivalent of a foreman mechanic. In 1952 the starting salary of a GS-12 was $7,040 per annum, and that of a foreman was roughly comparable at $6,514 per annum. Since the rate of pay for a foreman is based on wage board statistics it can be assumed that the salary adjustments since that time have maintained a state of general financial equilibrium between foremen and their opposite numbers in private industry. The current foreman's salary of $10.171 per annum represents an increase of 56 percent in a 10-year period. With the proposed increase the salary will be $10,971, or an increase of 68 percent. During the same period the salary of a GS-12 has increased to $8,955 per annum, representing an increase of only 27 percent.

When it is considered that the comparability of these positions has not changed in relation to levels of responsibility, it is obvious that both the principles of comparability and internal alinement are being violated.

4. The members of our association are acutely aware, from personal experience, of the problems raised by this situation, the majority of which center around the procurement and retention of qualified employees. We feel very strongly that the legislation proposed by Mr. Murray provides both immediate and long-term corrective action for an unsatisfactory condition that has inhibited the full effectiveness of the Government service for many years.

We respectfully urge, therefore, that you take favorable action on the bill (H.R. 10480).

LYMAN E. CARLOW,
National President.

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