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These estimates are offered only for what they indicate—the amount of money an employee has at his disposal to provide for himself and those dependent upon him. It is recognized that he shares an incometax obligation with workers in private industry and that his contribution to his future retirement benefit is of great value.
However, the fact remains that if, in the case of an employee in grade GS-5, he earns $70.40 and has remaining for his own and his family needs only $59.92, there is $10.48 a week or $545 a year less for actual expenditure. His actual spendable earnings, therefore have increased since 1939 only 61 percent in contrast to the 83 percent increase in gross earnings.
If we consider changes in Federal salaries on a broad basis and compare them with total increases in wages, and salaries of all employees in nonagricultural employment at widely separated intervals, it is apparent that industrial workers have gone ahead more rapidly.
The Bureau of Labor Statistics recently made available an enlightening summary of data on productivity, earnings, cost, and prices in the private nonagricultural sector of the economy, 1947–56. These data were prepared at the request of the Joint Economic Committee of the Senate and House of Representatives. They reveal an overall increase of 59 percent in average hourly earnings of all employees (wages and salaries) between 1947 and 1956.
This overall advance of hourly earning of employees in industry is not paralleled by the increase in pay of Federal classified employees.
The Federal Government's blue-collar workers have fared substantially better than have their white-collar coworkers, clearly reflecting the repeated and substantial raises granted the production work force in private industry. The comparison of average of second-step rates for wage-board grade 9 and the applicable rates for GS-4 in the years 1943 through 1956 substantiate this statement.
I am including a table, Mr. Chairman, which makes the comparison and shows the progress of the classified employees down through those years as compared with the wage board and the classified end up with an 88.8 percent and the wage board, blue-collar, 114 percent.
Wage-board grade 9 represents the median grade for the nonsupervisory wage-board grades having the greatest number of employees. The second step in the market-level rate of the grade. GS-4 is the Classification Act grade equivalent to CPC-6, which was the journeymạn grade for mechanics when there were many of these jobs in the classification system. GS-4 is also the midpoint of the Classification Act grades GS-1 through GS-7, a range which is considered comparable with nonsupervisory wage-board grades WB-01 through WB-17.
From 1943 (the earliest year wage-board rate data are available) through 1956, the average wage-board rate rose from 86 cents to $1.84, an increase of 114 percent. During the same period the second step rate in GS-4 increased on a per-hour basis from 85 cents to $1.68, or only 89 percent.
In the following table the average rates for wage-board grade 9 are compared with comparable per-hour rates of GS-4 for the alternate years from 1943 to 1955, when Classification Act employees received their last raise, and for 1956 when wage-board rates again were increased.
If the wage-board averages are projected on the basis of a straightline trend, the 1957 figure would be $1.93, or 124 percent above 1943, which is consistent with earlier years and with current wage-rate advances in private industry.
There was further evidence in a recent survey by Bureau of Labor Standards that blue-collar workers were improving their economic position more successfully than those in white-collar category. This survey disclosed an increase of 4.3 percent in the last year of union scales of 7 major building trades. The increase was about as large for the preceding 12 months.
As a result of this advancement in wages the level of wage scales for these trades averaged $3.09 an hour in April 1957. All of the skilled trades exceeded $3 an hour, ranging from $3.06 for painters to $3.69 for bricklayers. Building laborers averaged $2.24 an hour. This would amount to $89.60 for a 40-hour week and approximates the fifth step in grade GS-6 and the second step in GS-7.
This construction laborer rate is equivalent to the entrance rate which the Government has until recently been offering the young college-trained scientists to enter the service in various scientific positions. It is also better than the beginning rate for immigration patrol inspector, and is more than the starting salary for accountant, auditor, and staff nurse.
The New York Federal Reserve Bank maintains several indexes of wages and salaries, two of which are pertinent to an appraisal of changes in the salaries of Federal classified positions. The bank's index of average weekly earnings of clerical and professional employees rose 147 percent from August 1939 to March 1955 when the last Federal pay raise became effective. It then advanced an additional 12 percent to March 1957, or an overall increase of 174 percent.
Another index of the New York Federal Reserve Bank, that of average hourly earnings of wage earners, showed an increase of 189 percent to March 1955 and an additional advance of 10 percent during the last 2 years. The total rise from 1939 was 196 percent. These indexes supply further evidence that earnings of white-collar employees in industry and, to a greater degree, blue-collar workers, have risen more rapidly than have the salaries of Federal employees.
What income an employee who has family responsibilities needs to live in minimum comfort has been variously estimated. One noted estimate has been made at intervals since 1923 by the Heller committee for research in social economics which is identified with the University of California. There are two budgets prepared, each assuming a family of 4, consisting of a husband and wife and 2 children, a boy 13 and a girl aged 8.
The buhis familynber 1956.; hat of the fuskilled
The budget indicating the cost of a wage earner maintaining himself and his family in the San Francisco Bay area was estimated to be $5,849.67 in September 1956. If GS-4 is considered to be the journeyman grade comparable to that of the full-fledged wageworker, this figure is $2,434.67 above the income of a skilled electrician in ArmyAir Force grade 15 at the September 1956 rate. This rate is likely to be increased in the 1957 wage survey.
The Heller Committee budget for the family of a salaried junior professional and executive worker estimated as of September 1956 is $8,368.97. This figure is slightly above the fifth step of GS-12, $8,215. However, the position of the junior professional or executive employee in the Federal civil service would be classified in GS-7 or GS-9. The range for GS-7 is $4,525 to $5,335, and for GS-9, $5,440 to $6,250. The Heller budget figure is 85 percent above the entrance rate of GS-7 and 34 percent above the maximum of GS-9. There is a very great disparity even when the comparison is made with GS-9.
The Heller committee figures represent, according to its own definitionattempts to measure the cost of maintaining the commonly accepted standards of living of families in two different accupational groups. They are efforts to reflect realism based on conditions in a particular geographic area, and not to state what these families should have.
Rather than repeat our own comment on the inadequacy of Federal salaries, we will in this instance let the Cordiner report state our case. Here is what was said there about the shortcomings of the Federal salary structure:
Government service has never offered the same possibility for top financial rewards as industry, but it formerly did provide a comparable current salary, security, and superior retirement benefits. Today, however, Government employments lacks not only the possibility of acquiring substantial wealth, but it also fails to provide an equivalent current living standard and better old-age security as compared with industry.
That statement, it should be remembered, was made by a committee composed of important and successful industrialists who are speaking with the expert knowledge of what is profitable from a business standpoint.
We agree heartily with the forward-looking viewpoint of the Cordiner Committee, for it emphasizes our conviction of the necessity for an immediate pay raise for Federal employees. Mr. Chairman, I thank you. Senator NEUBERGER. Thank you, Mr. Campbell. Senator Morton, do you have any questions?
Senator MORTON. I would like to ask you about your table in your statement in support of S. 1326, Mr. Campbell.
Let us take GS-7, for example; current entrance salary, $4,525. That is today and that is gross salary; am I correct? Mr. CAMPBELL. Yes, sir.
Senator MORTON. Basic salary in 1939, $2,600. That, too, was gross salary? Mr. CAMPBELL. Yes, sir.
Senator MORTON. So, then, you have computed the amount needed to restore the purchasing power to the 1939 level in this case is $715?
Mr. CAMPBELL. Yes, sir.
Senator Morton. Now, as I read your table, that does not give effect to the disparity in take-home pay that has resulted from higher taxes; is that correct ? Mr. CAMPBELL. That does not take that into consideration. Senator MORTON. In other words, a restoration ? Mr. CAMPBELL. These are minimum needs.
Senator MORTON. Yes. Well, as I understand it, I just want to clarify this for the record, a $715 raise to a starting GS-7 job would restore the gross salary in terms of 1939 dollars to what it was then, but would not restore the take-home pay or purchasing power that the man would have for himself and his family to the 1939 level because of higher deductions for various purposes?
Mr. CAMPBELL. That is correct.
Senator MORTON. I just wanted to make that clear. Thank you, Mr. Chairman.
Senator NEUBERGER. Thank you, Senator Morton. Do you have any other questions, Senator?
Senator MORTON. No other questions. Thank you.
Mr. KERLIN. In an attempt to accommodate the out-of-town witnesses, I think we can forego questions.
Senator NEUBERGER. Mr. Paschal ?
Senator NEUBERGER. I just want to ask one question, Mr. Campbell. You cited the figures compiled by the Heller committee associated with the University of California. Did your testimony anywhere contain what actually is the average income of a family in the San Francisco area at the present time? Mr. CAMPBELL. No; it did not.
Senator NEUBERGER. It did not. I just wondered what it actually was as contrasted with the ideal budget provided by the Heller committee. You did not include that?
Mr. CAMPBELL. No. We made the comparison with the salary ranges in those grades.
Senator NEUBERGER. I just wondered what it was for all employment in the San Francisco area, because I felt that would have been pertinent.
Mr. CAMPBELL. Thank you very much. I think you have made a most impressive statistical presentation for some measure of equity and fairness in dealing with our Federal employees, and we appreciate your coming here.
Mr. CAMPBELL. Thank you for this opportunity, Mr. Chairman.
Senator NEUBERGER. Inasmuch as I have referred to statistics, before we have the next witness I would like to include in the record a letter dated May 21, which has come to the chairman of the subcommittee at the request of the staff from the Bureau of Labor Statistics, giving the Consumer Price Index from January 1952 until March of 1957 which, I believe, is the latest date for which that is available. That was discussed the other day and I will not burden our time with going into any detail about it, but its presence in the record will be very helpful.
That will be incorporated into the record at this point.
(The document referred to is as follows:)
DEPARTMENT OF LABOR,
Washington 25, D. C., May 21, 1957. Hon. RICHARD L. NEUBERGER,
Chairman, Federal Employees Compensation Subcommittee, Post Office
and Civil Service Committee, United States Senate, Washington 25, D. C. DEAR SENATOR NEUBERGER: Mr. J. Don Kerlin of your staff has requested information on changes over the past 5 years in the Consumer Price Index, The Consumer Price Index, by months, from January 1952 through March 1957, is as follows:
In the 5-year period ending March 1957, the index increased by 5.8 percent.
If the committee desires any additional information which we may be able to provide regarding the index, please let me know. Sincerely yours,
Commissioner of Labor Statistics. Mr. CAMPBELL. Mr. Chairman, with your permission I would like to submit statements in support of S. 27 and S. 1326.
Senator NEUBERGER. They will be received and accepted for the record at this time.
STATEMENT OF JAMES A. CAMPBELL, PRESIDENT, AMERICAN FEDERATION OF
GOVERNMENT EMPLOYEES, ON S. 27 Maintenance of the public buildings under the jurisdiction of the Post Office Department is an important aspect of operating the postal system. It has a significant bearing on the efficiency of the service and the use of the buildings by the public.
The employees who perform this needed function of the Department are, like many other Government workers, greatly in need of a pay raise. I am appearing as president of the American Federation of Government Employees in support of S. 27, a bill sponsored by Senator Johnson, chairman of this committee.
We approve this bill specifically for the increases which it will provide for the custodial service of the Post Office Department as well as for the benefits it will confer on all employees of the postal service.
There is no need for presenting a great variety of arguments in urging the enactment of S. 27 so far as it relates to the maintenance employees of this Department. The reasons may be summarized as follows:
1. Pay increases for these employees have been delayed too long and as a result they have been insufficient for them to keep pace with increases in the cost of living.
2. The salaries provided for these workers should be increased so as to compare more favorably with the wages of employees performing similar work in private industry.
3. Persons who perform similar duties for other agencies of the Federal Government receive higher rates of pay and their wages have been advanced at a more rapid rate than have the salaries of Post Office Department custodial employees.
Analysis has been made in the AFGE national office of available wage data for positions in the Federal service and in private enterprise which include