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lag of salaries behind advancing prices began with the Pay Act of 1945. The GS-7 salary exemplifies the failure of the classified employees to keep up with the economic procession.
The 1945 Pay Act raised the grade 7 entrance salary 14.6 percent, but by the time it went into effect the price index had advanced 31 percent.
Senator NEUBERGER. From what dates was that, Mr. Campbell, the price index had advanced 31 percent? Mr. CAMPBELL. That was from 1939 to 1945. Senator NEUBERGER. Between 1939 and 1945 ? Mr. CAMPBELL. Yes. Senator NEUBERGER. Thank you. Mr. CAMPBELL. The pay raise of 1955 brought the total increase of the GS–7 salary to only 74 percent above the basic rate in effect prior to 1945. But the Consumer Price Index so far has risen 101.5 percent.
After six pay raises, the GS-7 salary range has so failed to retrieve its prewar purchasing value that it is now necessary to increase the current salary $715 or approximately 16 percent.
There have been 6 pay raises spread over 12 years, only 1 of which was granted during the last 6 years. This timing of salary adjustments in itself indicates their sporadic character.
Employees in private industry have moved far beyond the 1939 level of living, for their earnings have more than doubled in purchasing value since 1939. We are insisting that classified Federal employees at least be returned to the economic position they held before World War II.
What reason is there for not adopting this policy of minimum relief? There is of course no valid reason. When we insist upon the least action which should in justice be taken at this time we are in effect asking no more than a restoration of conditions that existed in 1939. Other employees have gone forward. They have improved their lot toward what is described as our present American standard of living.
That standard in 1957 is somewhat higher than it was in 1939. Anyone who doubts that statement should make the rounds of our retail stores, then examine the many electrical devices for use in the home which were not available in 1939. Even a tour of the used-car lots will reveal the extent to which even the rejected products of the last few years are more desirable than those available 18 years ago. . But the Federal employees first must catch up with 1939.
The increase needed before real progress can begin is illustrated in the comparative salary figures for grades throughout the middle range of the general schedule. These figures are shown below:
These employees have a right to share in the benefits of rising pro-ductivity because every agency of the Government in which they are employed makes a direct contribution which benefits the American économy. The business world would be seriously handicapped without the efficient transmission of the mail by the Post Office Department, or the immense variety of useful information made available by the Census Bureau, the Office of Business Economics, and the Bureau of Standards in the Department of Commerce.
Included in the same Department is the Patent Office which contributes mightily to the stimulation of invention and the discovery of industrial uses for basic scientific knowledge. This agency affords a typical example of the handicaps which beset an organization which requires numerous professionally trained persons to conduct its activities.
The Patent Office has found it difficult to fulfill important functions because of (1) the difficulty in recruitment and retention of patent examiners, and (2) the excessive turnover of personnel. This occurs because so many of its highly trained examiners who are educated in both science and the law are attracted by lucrative opportunities in private enterprise.
The need for raising Federal salaries because they have failed to keep pace with repeated advances in cost of living is but one of the several bases for a pay increase. One of the most forceful and valid reasons for augmenting the income of classified employees is their right to share in the benefit which workers derive from increased productivity in the whole economy.
The productivity argument is particularly applicable to salaries in the first four grades of the general schedule. While salaries in these grades have been advanced proportionately more than the grades above them, we are recommending that they be raised on a graduated scale of 11 to 14 percent because of the claim which these employees have to a share in the general achievement of greater productivity.
In grades 2, 3, and 4 especially the need cannot be measured in terms of price index alone. That is a basic requirement but it is equally true that Government salaries should be sufficient to assure the individual employee of the added benefits of a continually higher standard of living. This economic progress of the individual has made the American worker envied throughout the civilized world, and in itself has produced the tremendous market for consumer goods on which so much of the country's material progress has been founded.
Federal employees have a just claim to their fair share in the continuing increase of productivity of the American economy. Although Federal workers are not manufacturing commodities for commercial distribution, they are engaged in the development of a vast variety of services in addition to the specialized products for defense or for uses which are restricted to Government alone.
All aspects of farming are benefited by the Agriculture Department, and such industries as meatpacking and food processing derive assistance from its operations. Whether it is the development of technical knowledge, the collection of essential statistics, or the maintenance of necessary controls, Federal agencies supply in many ways
can deny, therefore, that those employees who perform the myriad
tasks necessary to the operation of those agencies cannot claim a share in the productivity which their organizations make possible?
Productivity of the American economy had displayed a long-term upward trend. To complete this discussion, notice should be taken of the general trend in recent years which has been revealed by estimates of the average annual increase in output per man-hour for total nonagricultural industries. These estimates were published by the Joint Economic Committee in its 1956 Economic Report and its report on potential economic growth of the United States, and are being refined in the continuing study of the subject.
The Bureau of Labor Statistics recently has indicated the advance in productivity as 26 percent in the nonagricultural sector of the economy between 1947 and 1956. This rise in output per employee man-hour was stated in a summary of productivity and related data which the Bureau prepared at the request of the Joint Economic Committee.
The upward trend in this large sector of the economy has been indicated as averaging about 2 percent a year for the period from 1910 to 1953. However, there was a much larger increment averaging about 3.4 percent a year in the postwar period, 1947–53. Revised estimates indicated an increase of about 3 percent a year in 1954 and 1955, with a smaller increase in 1956.
Accepting these percentages as the measurement of the trend, the overall total increase of productivity in nonagricultural industries from 1939 through 1956 would amount to about 48 percent. The extent to which Federal employees should share in this gain and the amount they would need to effect a modest expansion of their living standard would at least support the raise of 11 to 14 percent we have proposed for grades GS-1 to 4.
There is impressive evidence in the occupational surveys of the Bureau of Labor Statistics that the salaries of office workers have increased at a more rapid pace in private industry than in the Federal service. This conclusion is evident in the analysis of salary trends for women employees in wage surveys in seven major metropolitan areas. The percentage changes are based on indexes of average weekly salaries for 18 office positions, including file clerk, stenographer, typist, secretary, switchboard operator, tabulating machine operator, key-punch operator, and comptometer operator.
The percentage increase in each area is shown below for 5-year periods, 1951 to 1956 in each case, excepting the San Francisco-Oakland area which is for the period ending January 1957. The percentage increases range from 20.4 to 32.7. The Federal civil service during the same period received 1 increase of 71/2 percent.
Senator NEUBERGER. Let me ask you a couple of things about that table, Mr. Campbell, if I may.
Is this for women workers only, that you have just been referring to in these metropolitan areas? It is not quite explicit in the table itself and IMr. CAMPBELL. The surveys include both men and women.
Senator NEUBERGER. I was a little confused, but this is for all employment?
Mr. Voss. The table includes only women.
Now, do you have comparable figures showing the increase, whatever it may be and such as it may be, for Federal employees ?
Mr. CAMPBELL. The comparable figure showing increase in salary rates of Federal employees is 7.5 percent if you consider only classified employees in the same types of positions as those included in the table. Clerical salaries of office workers in New York City have kept well ahead of advancing prices. This was indicated in the 13th annual survey of clerical salaries by the Commerce and Industry Association of New York. Median weekly salaries of 62 office jobs commonly found in private industry increased 5.3 percent between October 1955 and October 1956. There was an increase of 4.4 percent in the preceding 12 months. During these 2 years consumer prices increased about 2.75 percent.
Another industry survey by the Office Executive Association of New York showed that weekly salaries of clerical workers in New York City rose sharply from September 1955 to September 1956. Among the 24 jobs studied, the average increases were from $2 to $5 a week, but certain jobs were advanced by greater amounts. Senior general clerks averaged $11 more a week in 1956. Junior bookkeepers and tabulating machine and addressing machine operators earned $9 more a week than in 1955. It was also indicated that the standard woorkweek was still 35 hours in 5 days.
Unionization has had a marked effect on the salaries of office workers. Salaries are substantially higher under a union agreement than in many nonunion establishments, and furthermore these union rates are somewhat higher than the salaries for comparable positions in the Federal civil service. They cannot be discounted as unusual or as rates that are so typical that they need not be given consideration, and that we are referring to such concerns as General Motors, the automobile manufacturers, big steel, and others of a similar type.
The firms are too big to be overlooked. In fact they are so big that they are the ones that should be appropriately compared with the Federal Government, for they include the automobile manufacturers, “big steel,” and other companies of importance in the business world. The unions include the auto workers and the steel workers. This can have but one meaning: salaries for office workers in private industry are really on the way up.
A few comparisons will illustrate our point. These will relate to jobs that in the Federal service are in the more routine category which places them in GS-2, or in GS-3 when they include added skiil and responsibility.
The typical civil service grade for file clerk is GS-2, which range from $247 to $289 a month, or $57 to $67 a week. The Chrysler Corp., automotive body division, now pays from $319 to $354 a month. This would be within the GS-5 range. The so-called standard rate for this position at the United States Steel Corp. plant at Gary, Ind., is
$77,51 a week which is within the GS 4 and GS-5 range. Hudson Products division of American Motors' standard rate is $291 with a top range of $311 a month.
Several more examples will show the rates quoted are not isolated cases.
Another position which largely falls into GS-2 is typist, or clerktypist. The Bethlehem Steel Co., shipbuilding division, a subsidiary, of Bethlehem Steel Corp., at the Sparrows Point, Md., plant pays a typist from $67.20 to $70.20 a week which is within the GS-3 range. The standard rate at the Gary Steel plants is $77.52 a week, with some jobs receiving $82.53 in the next higher grade in which some typists are classified. Detroit Controls Corp. pays from $71 to $82.25 a week, well within the GS-5 range in the Federal classified service.
The pay of employees in private industry has advanced at a far more rapid pace than have the salaries of Federal classified workers. Weekly earnings of production workers in manufacturing industries increased from $23.86 in 1939 to $84.05 in December 1956, an increase of 252 percent. This was the highest earnings level in history.
On a take-home basis, the increase was almost as great, and was still the highest point in the history of wages in this country. The net spendable earnings of a worker having three dependents was computed by Bureau of Labor Standards to be $23.62 in 1939 and $76.54 in December 1956, an increase of 224 percent.
The net spendable earnings statistical series maintained by Bureau of Labor Standards is obtained by deducting from gross average weekly earnings Federal social security and income taxes for which the worker is liable.
For the purpose of comparing the rate of increase of net spendable earnings of Federal employees with that of production-worker earnings, the American Federation of Government Employees research department computed the net spendable earnings of classified employees in grades GS-3, 5, 7, and 9 for a Federal employee having 3 dependents.
That is this table down here, Mr. Chairman, and it is an interesting thing, Mr. Chairman, take one of them, take grade 9, in 1939 the gross earnings were $61.54 and the net spendable earnings were $49.39; but in 1957 the gross earnings were $104.80 and the take-home was $86.49.
Now, these estimates of take-home pay were obtained by subtracting from gross earnings estimated income tax and the deduction for retirement annuity. The resulting figures are shown below:
Net spendable weekly earnings of Classification Act employees occupying posi
tions in 4 general schedule grades in 1939 and 1957, assuming 3 dependents for income tax purposes