Government says it is $5 an hour, and they say you have not given consideration to this factor or the other factor. These are problems which we, as members of this committee, have to struggle with, and not having expertise in this line, we were willing to pass it over to you when we enacted the white-collar wage schedule, and now we are back again into this problem where we are confronted with the problem or wrestling with it again. These are some of the things we would like to be enlightened on. Mr. HAMPTON. I think that what we have here is the evolution of the comparability principle. The first objectives of comparability have been achieved in terms of principle. The argument that centers around comparability now is the question of, are you really paying a comparable wage, how do you arrive at your comparisons and procedures and statistics, and these are things that the National Wage Policy Committee and the Federal Employees Pay Council are addressing themselves to now. We are in the process, on the white-collar side, of going through the whole system, and working these out, and the first white-collar pay adjustments under the system will be made this January, and we will see how that works. I don't know how much time the committee has here, whether you want me to go ahead and finish the statement? Senator FONG. I think you should finish it. You only have three pages left. So why don't you continue on through it. Mr. HAMPTON. I think I left off with the figure 403.3. The postal workers and the general schedule workers have not been so fortunate, for their pay schedules have been adjusted less frequently. It was not until the Salary Reform Act of 1962 that the Government even recognized the "comparability" principle for the rest of its employees. Further, recognition of the principle did not result in an automatic application of "prevailing rates." Prevailing rates became a reality for these employees only in the last 3 years. These were "catch up" increases, and if you compare only these increases with current blue-collar increases, it would appear that the blue-collar worker had not fared as well. But the facts are that the General Schedule workers and the Postal Field Service workers are still behind the blue-collar workers in percentages of pay increases. Using the same year of 1945 as the base of 11, the General Schedule workers' index is now 331.8 and the PFS workers' index is 388.9. This compares to an index of 403.3 for the blue-collar worker. Let me correct another misconception. Some have suggested that the nationwide average blue-collar increases of 9.2 percent in fiscal year 1969 and 8.0 percent in fiscal 1970 were so large because these percentages included the benefits of eliminating laundry, food service, and custodial schedules. This is not the case. For example, grade 3 laundry workers in the Chicago area, in addition to receiving increases under the regular wage schedule, also received increases of more than $1 per hour due to the change in systems. These increases were not counted as part of the increases for the regular wage worker, and are not included in the average 9.2 percent figure. On the same basis, the percentages do not include increases which came to workers by consolidation of rural wage areas from former agency systems to the coordinated system. Increases from retroactive application of the Monroney amendment also were not included except in a few cases which occurred concurrently with the issuance of a regular wage schedule adjustment. Also, on this point, there is some suggestion that the Federal Government does not really pay "prevailing rates." This is sheer nonsense. It was reported, for example, that Federal truckdrivers in Chicago receive less pay than our wage survey indicated as the prevailing rate for truckdrivers. This tends to distort the facts. It is well known that the Federal Government does not pay individual "job rates." We do not pay the highest rates and we do not pay the lowest rates. Our rates represent the overall average of what the private companies pay in the communities for all survey jobs considered as a group. When you use such an averaging process, some individual job averages will be above and some below the overall average represented by the established pay line. This point is easy to illustrate. Exhibit B of my presentation covers the February 1971 wage survey of the Chicago wage area. Teams of management and labor organization representatives surveyed 349 firms employing 437,000 workers. They found 94,316 private industry jobs which matched 27 of our key occupations. The weighted averages of the pay rates for these 27 kev jobs are plotted on the attached graph. The "pay line" is drawn to show the average of all these rates. You can see that while only nine jobs in private industry have rates above the Federal pay line, there are 17 jobs in private industry which have rates below the Federal pay line, and one job average is on the line. These figures could be used to argue that we are overpaying relatively speaking, more jobs than we are underpaying. However, the pay line is influenced also by the amounts by which individual jobs are higher or lower than the line as well as by the relative industriai employments in those jobs. Thus, when all statistical factors have exerted their influence, the resulting pay line does, indeed, represent the combined statistical average of all the survey data. No one has yet found a better system to set Federal pay that is as fair to the Federal worker as it is to the Federal taxpayer. I have not discussed the pros and cons of including nonappropriated fund employees within the scope of the wage system. Most of these employees are in the Department of Defense, which has been intensively studying the problem for the last year or so. We understand that Defense has completed its study and is about to announce a plan for these employees. It would, of course, be most appropriate for the Department to present and evolain their plans. The CHAIRMAN. The Department will be here tomorrow morning to have their day in court. Mr. HAMPTON. Yes, sir. It has been called to our attention that our proposal does not specify that the annual report on the operation of the system should be trans mitted from the President to the Congress. This was not intentional. In fact, we think it is important that the Congress not only set the broad principles and policies for the system, but that it exercise an oversight responsibility in connection with our operation of the system. We think it is entirely appropriate that we make an annual accounting of our stewardship. We have no objection to its being added by this committee. This covers, in brief, the administration's views with respect to Federal wage legislation. We think the administration offers a good bill-one which will provide the basis for fair and equitable treatment of wage employees. It is consistent with the prevailing rate concept. It provides the means for management and labor to discuss and resolve issues directly, with each having a voice in the decision. Most importantly, it vests in the Congress the awesome responsibility for determining broad, basic policy, but it empowers the Chief Executive to make sound administrative choices within the framework of broad policy. It is a law which can help us to change with the time. We respectfully urge you to give serious consideration to the administration's views and to the administration's proposal for legislation. This concludes my testimony. We thank you for your attention, and we will be glad to answer any questions you might have about the proposed bill. |