The main reasons these percentages have gone up is the increase in pay of lower wage grade employees during the completion of the first 2-year cycle of surveys. These were finished in June 1970 and their results are reflected in the 17 percent cited by the administration. Prior to this first cycle, employees of laundries, food service facilities, and janitorial services were receiving depressed wages. In fact, management largely disregarded the regulations requiring them to pay private enterprise rates and set Federal rates just as low as the market would bear. Therefore, thousands of these employees lost untold millions of dollars in pay before the first cycle of surveys was carried out. Even today, they are underpaid, but at least their pay is nearer to private enterprise prevailing rates. It is a credit, of course, to the present coordinated Federal wage system that this gross injustice and exploitation has been reduced if not eliminated. But this is not so much a proof that the present system is so good as it clearly shows how bad conditions were in the past. But has management really improved its attitudes toward these lower wage grade employees? I have documents showing that it is now firm Department of Defense policy to contract out, wherever and whenever possible, all janitorial services. Yet it was precisely in these janitorial and other custodial grade positions where the highest increases in percentages in Federal blue collar pay rates had taken place. It is primarily these grades which account for the greater part of the 17-percent increase over the last 2 years of which the administration boasts. But these people are losing their jobs now. [Applause.] The CHAIRMAN. Do your documents suggest what they are paying these people in the private sector in contracts for similar jobs? Mr. GRINER. We know this. It is far below what the Government was paying them, and we know this, the contractors are lining their pockets with the taxpayers' money. This is happening when the job could be done more efficiently within house, and by a dedicated and loyal employee of the Government that is not looking for the profit angle. They are looking to do a good job for Unlce Sam. It is hard to avoid concluding under these circumstances that the Department of Defense is resorting to firing thousands of these impoverished janitorial employees principally to avoid paying them the proper wage. I shall document my facts on "firing by contracting out" by quotations and by the insertion hereunder, with your permission, of a newspaper report. The CHAIRMAN. That newspaper report will be made a part of your remarks. (The news article follows:) [Birmingham (Ala.) Post-Herald, Mar. 11, 1971] DEFENSE DEPARTMENT CUTS 1,300 AT CRAIG AFB IN SEVERE STATE BLOW (By Dick Bell) SELMA.-Military operations in Alabama, boosted three times since January with announcements of build-ups, received a severe blow Wednesday when the cutback of some 1,300 personnel at Craig Air Force Base here was revealed. The Department of Defense, in making the announcement, said about 950 military and 350 civilian personnel will be affected by the decision to convert military support operations at Craig to contract status. Announcement was made Feb. 23 that 200 persons would be added to the Safeguard command at Huntsville's Redstone Arsenal; on March 3, word was released that up to 2,500 in the Army's basic helicopter training program would be moved from Ft. Wolters, Tex. to Ft. Rucker and just this week, Republican Rep. Bill Dickinson said the Air Force was moving its computer operations from Washington to Gunter AFB at Montgomery. Congressman Bill Nichols from Alabama's Fourth District, said he was "extremely disappointed at the impending reduction in force at Craig and I am especially unhappy since I have been continually checking with the Air Force about the status of Craig and have been assured time and time again that there were no plans affecting the base or its personnel." Nichols said the Department of Defense, in a letter to him announcing the planned reduction, said the base support mission for the Undergraduate Pilot Training (UPT) operation had been based on operational readiness requirements which have been reduced. BEING ABSORBED The reduced requirements are being absorbed through the elimination of military support authorizations at Craig AFB, the Department of Defense told Nichols. The reduced requirement permits the current military support workload to be converted to contractor status, the Defense Department said. "I have been assured that the announcement does not affect the continued operation of the Undergraduate Pilot Training mission," Nichols said, "and the Air Force expects to train just as many pilots in the future as they are training now.' Nichols said he was particularly disturbed because the Defense Department "did not extend me the courtesy of discussing the matter with me prior to the announcement." The military support personnel to be cut back will involve mainly maintenance, mechanical and other similar jobs. FEWER PEOPLE Of the 1,300 jobs to be cut back, one source said the contractor might be able to do the work with as little as 600 or 700 people. The Air Force said it would make every effort to provide placement for those who are losing civilian jobs. They said many would possibly be hired by the contractor. Most of the military personnel will be reassigned away from Craig. One civilian employee, who might be in a position of being without a job or working for the contractor, said that they would lose all civil service ranking, even if hired by the contractor. Their same job with the contractor would probably be at a much lower rate of pay, resulting in a lower per capita payroll for any of those who are retained by contractors, the employee said. "HAVE OUR TROUBLES" "We'll have our troubles, no matter how many the contractor hires," said the employee, who wished not to be named. Rep. Nichols said he was planning a meeting to be held sometime in early April to discuss the problem and make plans with local leaders for improving the overall mission at Craig. He said the meeting will be attended by Senators John Sparkman and Jim Allen, Selma Mayor Joe Smitherman, Dallas County Probate Judge B. A. Reynolds and other Dallas County civic and business leaders. The cutback involves about half of the work force at Craig. Mr. GRINER. I think this newspaper man really hit at the guts of this contracting out. These same people that will lose their job will be hired by a contractor at as cheap a rate he can possibly get, and the contractor will make a profit. On January 14, 1971, Assistant Secretary of the Army, Benton G. Moeller, Jr., wrote me a letter in which the following paragraph, which speaks clearly for itself, is included: Contract is the Army's preferred method for obtaining custodial services and it is used predominately. At Army installations, custodial service is a function of the Facilities Engineer. The performance of this service by contract is under the supervision of the facilities engineer and the General Services Administration is not involved. On February 8, 1971, I received a letter from the Assistant Secretary of the Navy, James D. Little, saying in effect the same thing in the following words: Attached for your consideration is a discussion paper which explains our policy on the "contracting out of support services" by the naval shipyard. As you will note in the discussion paper, periodic reviews are conducted to ensure that it is still in the best interest of the government to continue contracting out a particular service. . . . As to the current and future impact on blue collar Federal employees of these Department of Defense policies, I should like to insert the following report which appeared in the Birmingham Post-Herald, March 11, 1971, about cutbacks of 1,300 military support personnel at Craig Air Force Base in Selma, Ala. Among other passages, the report includes the following: The Air Force said it would make every effort to provide placement for those who are losing civilian jobs. They said many would possibly be hired by the contractor *** One civilian employee, who might be in a position of being without a job or working for a contractor, said that they would lose all civil service ranking, even if hired by the contractor. Their same job with the contractor would probably be at a much lower rate of pay, resulting in a lower per capita payroll for any of those who are retained by contractors, the employee said **** The cutback involves about half of the work force at Craig. That is not all they lost, Mr. Chairman. They will not only lose a decent living wage, they will lose whatever civil service retirement rights, the health benefits, the insurance rights, and all of those things that you and I and some of the rest of them have, that you have got for these employees over a number of years. Maybe the contractor will have a pension plan. You and I know what happens to the pension plan when the contract goes out. What about veterans' benefits? That is meaningless in these contracting situations. Now I will not offer this summary. I know Mr. Ryan might have a few words to say. What I have said in this summary is more or less what I tried to explain this morning. The CHAIRMAN. Your full summary will appear intact along with your remarks, so they will not be lost. That will be inserted at this point in the record. (The statement follows:) SUMMARY AND CONCLUSION As I have demonstrated repeatedly in my testimony, blue collar employees desperately need legislation, providing an impartial neutral Chairman at the top and establishing a legal mechanism which can be invoked automatically to resolve differences of honest judgment as well as eliminate factual errors. The great merit of the wage board bills before you is that they will bring equity to wage board and non-appropriated fund employees in an orderly, constructive manner, relying on the positive experiences of the past. These Bills definitely are not going to introduce radical or untried concepts into the Federal service. Proof of this lies in comparing the provisions of these Bills with the provisions of Chapter 532-1 of the Federal Personnel Manual of January 10, 1968, which governs Wage Board employees. Basically a good many of the same kinds of techniques, procedures and modalities of inter-agency cooperation envisaged in these Bills already exist in current regulation. Where then do the main differences exist? And what are they? Besides the fact that these Bills give a statutory basis for fixing and adjusting the rates of compensation of wage board employees, the main specific differences concern the following: 1. The composition and role of the National Wage Policy Committee; with a neutral chairman; 2. The inclusion of employees of non-appropriated funds in the wage board system; 3. A statutory provision for the cooperation of private enterprises having government contracts in the conduct of the local wage surveys; 4. The introduction of a ten-step Wage Rate Schedule; 5. The provision of equitable overtime, shift differential and travel time pay; 6. The provision of a five-day workweek with two consecutive days off. These differences summarized under those six clauses, contain the gauge and measure between a modern, equitable wage grade system and the one we have today. In concluding, I earnestly ask you to enact all of them into law. Mr. GRINER. I want to express my appreciation to you, Mr. Chairman, and members of the committee for the opportunity of appearing before you this morning, and I too hope we can get some early resolution of this wage board situation. It is deplorable. [Applause and standing ovation.] (The following correspondence was subsequently supplied for the record :) Hon. ROBERT E. HAMPTON, Chairman, U.S. Civil Service Commission, MARCH 30, 1971. DEAR BOB: In his testimony before the Committee on Post Office and Civil Service on wage board legislation yesterday, AFGE President John Griner stated that 71,845 blue collar employees were dismissed from the Federal service during the period July, 1969 through July, 1970 (page 3 of his prepared testimony). This figure seems unusual. I would appreciate your advising me whether the rate of dismissal was this high or if other factors contributed to the decline in employee population. Hearings on wage board legislation will be resumed after the Easter recess at which time I will ask you to testify. Kind regards. Sincerely, Hon. GALE MCGEE, GALE MCGEE, Chairman. U.S. CIVIL SERVICE COMMISSION, Chairman, Committee on Post Office and Civil Service, DEAR MR. CHAIRMAN: This is in response to your letter of March 30, 1971, concerning testimony of AFGE President John Griner before the Committee on Post Office and Civil Service on wage board legislation. Mr. Griner stated that 71,845 blue collar employees were dismissed from the Federal service during the period July 1969 through July 1970 (page 3 of his prepared testimony). Mr. Griner cited that in July 1969 there were 745,735 blue collar employees of the United States and that in July 1970 there were only 674,250, or a reduction of 71,845. These figures include foreign national employees in overseas areas. However, since Mr. Griner said they were employees of the United States instead of in the United States his statement was correct although somewhat misleading. The number of wage system employees in the United States dropped from 592,218 on June 30, 1969 to 545,373 on June 30, 1970. This was a reduction of 48,845 wage system employees. During this same period the number of General Schedule employees in the United States dropped from 1,273,695 on June 30, 1969 to 1,263,556 on June 30, 1970. This was a reduction of 10,139 General Schedule employees. The above figures indicate net reductions. They result from many causes including death, resignations, retirement, removal, separation by reduction in force or reclassification from Wage Grade to General Schedule and vice versa. The Civil Service Commission does not maintain records on type of separation broken down to Wage Grade or General Schedule employees. This information is compiled by type of separation rather than type of employees. Our records reflect that during fiscal year 1970 the percentage of separations from the Federal Government was distributed as follows: We expect to complete the review and coordination of our legislative proposal for a Federal Wage System in the very near future. We will submit it to the Congress as soon as possible and I will be pleased to testify in support of our proposals. Kind regards. Sincerely yours, ROBERT E. HAMPTON, Chairman. The CHAIRMAN. We will now hear from Mr. William H. Ryan of the Metal Trades Department, AFL-CIO. STATEMENT OF WILLIAM H. RYAN, NATIONAL COORDINATOR AND LEGISLATIVE REPRESENTATIVE, GOVERNMENT EMPLOYEES DEPARTMENT OF THE INTERNATIONAL ASSOCIATION OF MACHINISTS AND AEROSPACE WORKERS, AFL-CIO; ACCOMPANIED BY SAUL STEIN, METAL TRADES DEPARTMENT Mr. RYAN. My name is William H. Ryan and I am national coordinator and legislative representative of the Government Employees' Department of the International Association of Machinists and Aerospace Workers, AFL-CIO, and I am authorized by President Maywood Boggs of the Metal Trades Department, AFL-CIO, to testify for and in behalf of the department and its 22 affiliated national and international unions on this very important legislative proposal to bring sense and equity to the wage fixing procedures for prevailing rate employees of the Government. I am accompanied by Mr. Saul S. Stein, general representative of the metal trades department. At the outset, I convey the appreciation of our affiliated unions to the chairman of this committee for scheduling hearings, to Senator Moss, and the several other members of the Senate who have sponsored companion bills to S. 231. All of the 22 affiliated unions of the metal trades department wholeheartedly support the objectives of this proposed legislation with |