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"the same or closely similar duties. These data indicated that a liberal raise can be substantiated on the basis of the rates which are paid by other Federal agencies and by private business.

The analysis of rates of pay or earnings in industry, as reported by the Bureau of Labor Statistics, not only indicated that many private employers were paying more than the Post Office Department but it was apparent that there had been substantial increases made in the 2-year period prior to surveys made in the latter part of 1956. This 2-year period does not coincide wholly with the 2 years since the last pay raise, but since these data show the advance of earnings in industry in the most recent years available, they provide a gage of wage and earnings changes in a period comparable to the 2 years that have elapsed since the pay raise of 1955 became effective.

The average earnings of janitor in almost every survey city compared was well above the $1.38 an hour paid as the first step or the $1.48 as the fourth step in grade PFS-1. Average earnings for this position in the cities examined were as follows:

Buffalo, $1.83; Philadelphia, $1.61; Pittsburgh and Cleveland, $1.80; Kansas City, $1.71; and San Francisco, $1.96.

Laborer rates likewise were higher in several widely scattered cities than postal salaries for this position. The average earnings of laborers were reported as $1.72 in Philadelphia; $1.68 in Buffalo; $1.96 in Pittsburgh; $1.82 in Kansas City; and $2.07 in San Francisco. The first step of PFS-2 to which this position is assigned in the post office service is $1.49. The middle rate for this grade is $1.64 which is still below the average earnings in the cities enumerated.

Firemen also were earning higher rates of pay in private employment in various sections of the country. Average earnings for fireman in seven large cities ranged from $1.93 in Birmingham to $2.38 in San Francisco. This range is well above the first step of $1.60 and the fourth step of $1.77 in postal grade PFS-3.

When comparisons were made over a 2-year period it was apparent that industry had advanced materially. This difference of course substantiated a sizable raise for maintenance workers in the Post Office Department. Earnings of janitor over the 2-year period had increased 11 percent in Buffalo and 10 percent in San Francisco. Laborers' earnings also had advanced, particularly in public utilities. In Buffalo the increase was 14 percent; in Philadelphia, 19 percent; and in San Francisco, 11 percent.

Increased earnings of 9 to 11 percent also were reported for stationary engineers in most cities examined. The increase for this position in manufacturing plants ranged upward to 14 percent in San Francisco.

The skilled trades likewise went ahead substantially in the 2-year period. Maintenance electrician's earnings averaged $2.47 in Philadelphia; $2.63 in Buffalo; $2.58 in Cleveland; $2.66 in Birmingham; and $2.71 in San Francisco. The proportion of increases ranged from 10 percent in Philadelphia to 29 percent in San Francisco.

Attention is called to the fact that earnings figures quoted are averages for the metropolitan areas indicated. This of course means that many employees are earning at an even higher rate than that which is shown. The area wide average frequently is exceeded by the earnings in manufacturing establishments or in specific industries such as public utilities or certain of the service industries.

Use of large-city rates may be questioned because there are so many post offices in small communities and in rural sections in all parts of the country. But when it is realized that more than 50 percent of the maintenance employees of the Post Office Department are working in cities having 100,000 population or larger, it is evident that large-city standards are definitely valid, So far as skilled trades are concerned, there are relatively few of these employees working outside the large post offices.

As in other situations involving wages or salaries, the Government is in competition with private industry, and finds it difficult to recruit desirable employees. The Government must pay rates which are reasonably satisfactory rates to meet this competition. If it does not meet it, the Government will either fail to recruit qualified persons or lose them to private employment later because of higher pay offered outside the civil service.

The pay of these employees of the Post Office Department compares unfavorably with the rates which are paid elsewhere in the Government service. An electrician in the post office service is paid $1.87 at the first step and $2.05 at the

fourth step in grade PFS-5. Compared with these rates are those established by the Army-Air Force Wage Board for the position of electrician. The second step, or market rate, is currently $2.21 in Atlanta; $2.36 in Washington, D. C.; $2.64 in Detroit; and $2.51 in San Francisco.

These rates indicate that a cross-section of the earnings of comparable workers in private industry clearly supports a raise for post office maintenance employees. The American Federation of Government Employees is deeply appreciative to the chairman and members of this committee for this opportunity to present our views on the salary needs of these employees.

STATEMENT OF JAMES A. CAMPBELL, PRESIDENT, AMERICAN FEDERATION OF
GOVERNMENT EMPLOYEES, ON S. 1326

The recruitment and retention of engineers as well as other technically and professionally trained persons has become one of the most challenging problems of the Federal Civil Service. It is a problem which must be solved or it can prove to be one of the most costly failures of our time.

Because of the gravity of this problem, the American Federation of Government Employees is vitally interested in such a proposal as S. 1326 which has been introduced by the chairman of this committee, Senator Johnston, for the purpose of establishing a system for the classification and compensation of scientific and professional positions in the Federal Government.

The problem of recruitment has become a serious one for the Federal civil service because it is not possible to hold out to the young engineering or other professional student the glittering future which can be offered by private industry. When students still in their final year in school are signed by prospective employers at more than $400 a month, even the fifth or sixth step in grade GS-7 is not enough to lure prospective scientific workers into the Federal service, there to have his pay dwindle in value before the upward rise of prices and to have his patience exhausted because a pay raise may not increase his basic salary for 5 or 6 years.

The pay of top-flight professional and scientific employees in Government may never equal that which is paid in private industry. On the other hand, these employees have a right to expect a reasonably comparable return for their valuable services.

It is our firm belief that these employees are not asking too much when they propose the salaries set forth in S. 1326. In comparison with the compensation in industry these salaries are well within reason.

While there may be those that believe that the Federal Government cannot be expected to match the monetary rewards of industry, there is not the slightest reason for the Government in effect to exploit its employees on any level. Salaries which are substantially less than what might be termed the going salary in private business certainly are substandard.

The Bureau of Labor Statistics recently prepared a valuable summary of data on productivity, earnings, cost, and prices in the private nonagricultural sector of the economy in the years 1947-56. This material, prepared at the request of the Joint Economic Committee of the Senate and House, disclosed an overall increase in average hourly earnings of all employees of 59 percent between 1947 and 1956.

That this advance of hourly earnings of employees in private industry greatly exceeds improvement in the salaries of Federal employees is clearly apparent in the changes that have taken place in what may be termed the middle grades of the Classification Act General Schedule. Minimum basic rates for grades GS-5, GS-7, GS-9, GS-11, and GS-13 in 1947 and 1956 have been compared in the table below to indicate the rate of increase. Annual rates for classified positions approximate an earnings figure.

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It is apparent in these figures that Federal classified employees were falling substantially behind the 59-percent wage and salary advance of employees working for private enterprises. It should not be overlooked that by 1947 consumer prices had increased 62 percent above the August 1939 level. With a further increase in prices, the overall rise of the consumer price index by the end of 1956 was an even 100 percent. At this point it would have required $6,400 to bring the GS-9 entrance salary back to the 1939 cost-of-living level, and $11,200 to restore the GS-13 entrance salary to the same basis.

There is one very fine group of employees in the Patent Office whose problem typifies the situation which S. 1326 is designed to correct. This is a multisided problem both from the standpoint of the management of the Patent Office and of the employees. The two phases are interrelated, for management difficulties are inevitably reflected in the personnel situation.

This problem at the Patent Office is one over which management and employee have no control. It is a question of providing higher salaries which will make it possible to recruit and retain the trained and experienced personnel which this agency needs.

Because of the shortage of qualified personnel and increasing turnover, the Patent Office has not been disposing of patent applications as promptly as the national defense and the national economy demand. It was pointed out in a Senate report (No. 1464) last year that "the examiner of ability can easily find a better salary and more attractive employment conditions outside the Government than are now afforded him in the Patent Office. *** The separation of able employees from the service should be discouraged and the enrollment of new experts of high qualifications should be secured by providing better incentives than is now the case."

Basically the problem which confronts the Patent Office is that of recruitment and retention of patent examiners. In this respect the Patent Office is competing in occupational categories which are in most critical shortage. The result is that the agency does not have enough examiners with adequate experience to produce the results which are expected of it. Effort is being made to utilize automated processes for handling some portions of the work of examining patent applications, but there appears to be little likelihood that such means will provide any material solution within the foreseeable future.

The shortage of patent examiners is part and parcel of the entire national need for professional and scientific personnel. However, so far as the Patent Office and industry generally are concerned, the shortage is of vital consequence to the very industries that are clamoring for adequately trained persons. These industries are offering them salaries which either keep them from accepting employment at the Patent Office or causing them to leave. Both the Patent Office and industry are jointly suffering from the shortage of qualified personnel. Industry is solving it by offering higher salaries. The Patent Office cannot do that with the present salary schedule so far below industrial rates. Business generally would benefit if the operation of the patent system could be improved. The turnover of personnel on the professional patent staff of the Patent Office has become exceedingly wasteful. It is an outstanding instance of the Government saving a few hundred dollars and losing from 10 to 20 times as much because costly training and experience are withdrawn by the department of valuable employees.

By the beginning of this month of May, the annual turnover rate among patent examiner assistants had reached the alarming figure of 23 percent. It has become virtually impossible to hire trained patent examiners. The only source would be the group who have left the Office, but naturally they would not be willing to accept the offers which the Patent Office can make. The consequence is that the Patent Office must hire inexperienced personnel and train them as examiners.

Patent examiners stay a relatively short period after they have been trained. For example, 127 new examiners were employed in 1951, but only 17 of them are still employed at the Patent Office. There has been improvement in results of the recruitment campaign. A total of 175 potential examiners was employed during the first 10 months of the fiscal year 1957, but during that period the Patent Office lost 174. The net gain therefore was a single examiner.

The serious financial aspect of this whole problem lies in the cost of training and the resultant staggering loss to the Government from trained personnel leaving the service.

The Patent Office considers that man can reasonably function on his own after 21⁄2 years' experience. But by the end of the current fiscal year more than half the examining corps will be untrained by this definition.

It costs the Federal Government at least $7,000 to train a new patent examiner. Since the annual separation rate has increased to $250 a year, the cost of training replacements now is approaching $2 million a year.

There are several additions to the groups now included in the application of S. 1326 which the American Federation of Government Employees desires to suggest. Specifically these include the series listed below. However, as a general comment it may be stated that the bill should be broadened to include all professionally and scientifically trained persons. It should not be confined only to those who at present are among the occupational categories which are in short supply. To do otherwise is likely to cause dissatisfaction among persons equally highly trained and the result may be increased turnover in other categories.

If this bill is passed as presently written, it may require repeated amendment after it becomes law so as to include in the future other groups that are increasingly in greater demand by private industry.

The additions suggested in terms of classification specifications series follow: Architect, GS-1040; safety engineer, GS-803; nurse, GS-610; physical therapist, GS-633.

It is desired that the record show that we deeply appreciate the opportunity to present to this committee our views on a most vital problem for the Government and our Nation as a whole.

Senator NEUBERGER. The next witness will be Mr. E. C. Hallbeck, legislative representative of the National Federation of Post Office Clerks.

STATEMENT OF E. C. HALLBECK, LEGISLATIVE REPRESENTATIVE, NATIONAL FEDERATION OF POST OFFICE CLERKS

Mr. HALLBECK. Mr. Chairman and members of the subcommittee, for the record my name is E. C. Hallbeck. I am the legislative director of the National Federation of Post Office Clerks, and I am accompanied this morning by our national president, Mr. C. Kline House.

I have a rather lengthy prepared statement which I do not intend to read in full, and I was very happy to note the suggestion of the chairman that we might paraphrase it. I propose to bring out simply the highlights in that statement and trust that the members of the subcommittee will read the statistical data at their leisure, and I hope they will find it useful.

I represent approximately 115,000 clerks in first-, second-, and thirdclass post offices, located in every State of the Union and in Alaska, Hawaii, and Puerto Rico as well.

At the outset I want to endorse, completely and without reservation, the bill S. 27, introduced by Senator Johnston, for himself and Senators Langer, Neuberger, Young, Humphrey, McNamara, and Magnuson. Postal employees everywhere are indebted to each of these gentlemen and to this subcommittee for their recognition of the serious problems now confronting postal and Federal employees and for their efforts to solve those problems. The hearing this morning is, I hope, the first long step in solving the immediate problem of inadequate postal salaries.

Stated briefly, a good case for immediate postal salary increases can be summed up in a very few words. A single salary increase in a 6-year period, during which prices have risen to new record highs, when wages of people in private industry have been increased 4, 5, and even 6 times, when profits have hit previously undreamed of peaks, when the national economy is higher than ever before, simply has

not permitted postal and Federal employees to keep abreast of the trend, let alone enjoy any of the benefits of what we are told is an unprecedented prosperity. A prosperity, I might add, that you can't prove by us. In other and less grammatical words, "One small pay increase in 6 long years ain't enough."

The administration's view that a well justified salary increase for postal employees should be deferred because of its "inflationary tendency," sounds like something out of another world. It is totally inconsistent with the history of the economic growth of this country in the past 10 years.

We cannot regard it as anything other than a coldly calculated plan to throw postal employees to the wolves for the sake of making a political hero out of the fat shepherd. If there are any inflationary tendencies at work today, they certainly do not result from the single salary increase received by postal employees in the past 6 years. We are the unfortunate victims of inflation, rather than the cause.

The truth about inflationary pressures is perhaps best demonstrated by the report last week of the Office of Business Economics, of the Department of Commerce, which reported that, "Companies issuing public reports paid a record $762 million in cash dividends during April."

In addition to topping the previous high for the month, April payments boosted dividend totals for the first 4 months of the year to another new record high of $3,600 million. The April dividends were 8 percent higher than the same month last year and the 4-month total was 5 percent higher than the same 4 months of last year. If that dividend record indicates inflationary tendencies, I hope no one will charge that it is a result of the one small raise given to postal employees in the last 6 years.

Attacking the postal wage increase as "inflationary" surely puts the administration on very tender ground-because there is altogether too abundant evidence dramatically underlining the stark fact that postal employees, under the present administration, are, and have long been, the hapless victims of inflation rather than its cause.

Our detailed argument in support of postal salary increases is based on three facts, any one of which, we feel warrants the enactment of the bill S. 27. These facts are: 1. The increased efficiency of postal employees, and I might add productivity; 2. The difficulty experienced in recruiting new people at current wages; and 3. The increases received by people of equal skill, training, and intelligence employed in private industry.

I propose to develop each of the foregoing in only sufficint detail to prove the case and with the permission of the subcommittee will submit supporting charts and statistical material for the record.

In his budget message to the 85th Congress, President Eisenhower made the statement that:

If our economy is to remain healthy, increases in wages and other labor benefits, negotiated by labor and management, must be reasonably related to improvements in productivity. Such increases are beneficial, for they provide wage earners with greater purchasing power.

We gladly accept that premise. We are willing to base our case for increased wages on our increased productivity.

92764-57--9

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