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Mr. Pratt. That gives the private employer an advantage in recruiting that the Government does not have. As far as your description of the picnic grounds and so on are concerned, that is a cost to the company which is reflected in the company's books as an employee benefit and, therefore, would have been included in the survey, I believe. For example, one of the benefits taken into account in the private figure was discounts which a store allows to its employees on purchases in its own store. The Government has nothing comparable, but it does constitute a real fringe benefit which was included in the survey of industry benefits.
I think, Mr. Chairman, that your staff might like to extract 1 or 2 of the tables from this survey, after you study the record at this point, which would give the details on various items that were taken into account.
Senator NEUBERGER. This is such a pertinent point, Mr. Kerlin, because these fringe benefits have been discussed here as a material factor that I hope that will be done, that the staff will make selective use of these tables prepared by the Cordiner Committee and have them included in the record of this subcommittee. I think that is important. Do you have any questions?
Mr. KERLIN. On chart 6 which shows that employees in industry have received increases of 20 percent plus, from 1952 to 1956, whereas in Government, the increase has been 712 percent. When those facts were learned by the committee, did the committee give consideration to the possibility of establishing wage controls in industry but discarded that in favor of the recommendation that the proper approach would be to increase the pay of the Federal employees.
Mr. PRATT. We did discuss the possibility of trying to put some kind of inhibitions on private industry as far as paying wages in competing lines were concerned, and we very quickly discarded that as not being the kind of thing that we would like to see in time of peace.
Mr. KERLIN. Thus that led you to the conclusion that the proper solution was for Government to increase pay, to provide a more competitive basis for securing the same type of personnel ?
Mr. PRATT. Rather than give you an unqualified yes, Mr. Kerlin, I would like to say that we felt the proper thing to do was to study the Government's compensation systems and in the meantime to close the barn door before the horse left it and give an interim pay readjustment to the categories where the Government was suffering so badly from its loss of people.
Senator NEUBERGER. Are there any other questions of Mr. Pratt? Do you have some?
Mr. PASCHAL. Mr. Pratt, I have been trying to follow your very thorough statement here and this question keeps popping up in my mind. I will ask you for my own clarification, as I gather from your excellent statement, your work has dealt primarily in this report with those employees in what we would call in the super grades and your findings pertinent to that and also the fringe benefits would be more pertinent to that class than it would be to the rank and file of the regular civil-service employee?
Mr. PRATT. No, sir, the class of civilian employee to whom I have been referring throughout my testimony, and to which the report refers, is civil-service employees in the Department of Defense in the grades GS-7 and above."
Mr. PASCHAL. GS-7 and above?
Mr. PRATT. GS-7 and above, not just the supergrades. I did mention the limitations on supergrade positions, which we feel is a great deterrent to proper personnel administration in the Department, but that is only one aspect of the problem.
Mr. PASCHAL. But, it would not be so applicable to those under GS-7, is that right?
Mr. PRATT. As far as the Defense Department is concerned, we found no serious problem in the lower grades. Mr. PASCHAL. Thank you.
Senator NEUBERGER. Mr. Paschal, one question-part of your question somewhat puzzled me as I am not as technically familiar with some of this as you are. Wouldn't fringe benefits in the Government be somewhat universal? In other words, while there may be a difference in salary scales for highly trained professional employees as compared with those who require less professional or educational preparation, fringe benefits, such as those enumerated by Mr. Pratt, is quite a universal factor.
For instance, if there is a great difference in fringe benefits, I would like to be enlightened. Is there a great disparity in proportion to his or her salary that would be made available to a physical scientist in the Department of Defense as compared to a clerical worker in the Interior Department or a letter carrier in the Post Office Department?
Mr. PASCHAL. Mr. Chairman, it was my thought there was no great difference and that is what I was trying to clear up. I was led to believe there was a distinction.
Senator NEUBERGER. I did not think there was and I thought your question implied there was. Maybe I did not understand it properly but it is my understanding that in the general scope of these fringe benefits, there is not a great difference. There may be in the retirement pay because of the difference in salary, but in the benefits per se, as related to the salary received by that person, there are no great distinctions.
Mr. Pratt. That would be true in Government. It would be pretty hard to make a blanket statement as to the correctness of that conclusion in industry, because sometimes different groups operate under different pension plans and so on.
Senator NEUBERGER. Thank you so much, Mr. Pratt. Again, I want to thank you and your associates for taking the time and the trouble to come here today from New York and give us the benefit of some very valuable information. We are indebted to you and I know all the employees whose welfare is at stake and the people of this country who are served by their Government are similarly grateful to you for coming and I want to thank you again, particularly on behalf of myself and the chairman of the full committee and members of the subcommitte.
Mr. PRATT. Thank you for listening to me, Mr. Chairman.
Senator NEUBERGER. We have now reached the hour of noon and I will have to inform those who are further on the schedule today that they will be first on the schedule tomorrow.
If you will just wait a minute before we recess, I will read the names. The schedule tomorrow will commence with Mr. James A. Campbell, Mr. E. C. Hallbeck, Mr. George D. Riley and Mr. Russell M. Stephens.
I want to say this for the benefit of some of you who may have come from out of town. Our schedule has called for us to hold hearings from Monday through Thursday from 10 in the morning until noon. If we should not hear everybody who has a legitimate statement to make to the committee, with the permission of the chairman of the full committee, we will go over 1 more day until next Monday. I just want to say that so you will be informed that is agreeable with Senator Johnston.
The CHAIRMAN. It is perfectly all right.
Mr. KERLIN. Mr. Chairman, with your permission, I should like to have inserted in the record at this point a statement by Senator John A. Carroll.
Senator NEUBERGER. I shall be happy to have Senator Carroll's statement included.
(The statement referred to is as follows:)
STATEMENT OF JOHN A. CARROLL, A UNITED STATES SENATOR FROM
THE STATE OF COLORADO Mr. Chairman and members of the committee, I desire to present a general statement in reference to the subject matter of S. 27, S. 734, and S. 1326.
I am familiar with the economic status of many of the employees of the Post Office Department in my State. I find that in many instances, it has been necessary for an additional member of the family to become employed because of the inability of the family head to maintain himself and his family on his present salary.
I have been convinced for some time that there is considerable injustice in the rates of pay for the devoted and loyal workers in the field services of the Post Office Department and those employed in other branches of governmental service.
I am fully aware of the universal desire for reduction of the national debt, and for a reduction in taxes, but I do not believe that it is the desire of the average American citizen that these ends shall be obtained at the cost of fair treatment to employees who, over a long period of years, have demonstrated their faithfulness to duty and loyalty to country.
It is my understanding that the increases asked for are reasonable, and will result in bringing this particular group of public servants to an economic level somewhere approaching equality with their fellow citizens.
Senator NEUBERGER. We are in recess until 10 o'clock tomorrow morning.
We thank our visitors from Mexico for having been with us and hope that they enjoyed themselves this morning.
(Whereupon, at 12:05 p. m., the subcommittee was adjourned to reconvene at 10 a. m. Wednesday, May 22, 1957.)