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Last year, Mr. Chairman, only through the device of attaching the retirement bill to the executive pay bill did this legislation become law. Your committee chairman earned even greater thanks from thousands by coupling these bills together. The higher echelons in Government wanted more pay, so the President withheld his veto to which Government personnel have become so well accustomed. It seems that to increase salaries on the top side is not inflationary; but to raise pay down the line, that is inflationary. To borrow the words of President Meany:
When prices are rising “it is inflationary to increase pay." When prices are falling, higher pay "might promote unemployment.” When prices are fairly stable, it might "rock the boat” to adjust the pay structure.
So, just when is the time?
The obvious head of the executive branch of Government is the President of the United States. Four loyal delegates to last week's National Salary Conference here were authorized at that conference to seek a brief meeting with the President to tell him of the hopes and aspirations of hundreds of thousands of Government employees.
What was the response ? None beyond referring these same loyal, industrious, honest employees to the Civil Service Commission.
But, the same day, the Commission Chairman had anticipated the situation apparently and had prepared a comprehensive analysis and overhaul of the entire Federal pay structure as his way of meeting the issue head on. That is bureaucratic doubletalk for "let's have another pay study, the fellows are about to make their case." His choice of words was something about an “inflationary” influence on the national economy.
It may well be that Chairman Ellsworth has not heard that while he was making laws that the Congress passed a postal classification bill and a nonpostal classification bill.
Government employees have been thoroughly "hatched," classified, allocated, placed in levels, and otherwise compartmentized from the advancements and benefits enjoyed in industry. Efforts have been made to stagnate career benefits by assigning the better jobs to patronage.
Serious attempts have been made to nullify the Lloyd-LaFollette Act. These are but a few of the situations which have been allowed to arise and be encouraged.
These employees are fed up with studies and hope deferred. It is a pay increase now, a substitute for which there is none.
Someone reminded the Director of the Bureau of the Budget Brundage that he, too, should get on the team and oppose the working forces of Uncle Sam's domestic household. He did join the opposition. This is the nicest thing which could happen to have him oppose pay justice.
It was discovered recently that Mr. Brundage did not even know what happens to the postal receipts. So, we can now assume he does not even know what he really is opposing. I have the feeling that his opposition is just about what is needed to insure success of this campaign.
I cannot believe the Congress is going to be convinced and influenced by the Madison Avenue advertising campaign of the United States Chamber of Commerce opposing Government employees in their hunt for justice.
e Congress is vertising campaient employees
The chamber's own President Coleman held a dual capacity as member of the Postmaster General's Advisory Committee. Mr. Coleman seriously and deliberately announced that the employees do not need more pay.
Then, Mr. Coleman's own United States Chamber of Commerce opens its annual meeting with the usual remarks from the Postmaster General.
It is evident there can be no substitute for the events now taking place in the Senate and the House: (1) The present hearing in your subcommittee; and (2) signing of the discharge petition in the House on Government pay.
In pledging his support of the salary campaign, President Meany said:
There is no difference in the problem of the public employee and the problem of the employee in private industry. The public employee has to raise his children, has to educate them and has to be concerned with all of the things that concern workers in private industry. He has to be concerned particularly with the amount of money that goes into his pay envelope. I do not subscribe to the theory that there is some special honor or some special standing or some special favor that Government employees receive for which they can be expected to subsidize the Government by working for less than a decent American standard of wages.
President Meany's reference to employees' subsidization of Government brings to mind the frequent argument of Government's ability to pay, which argument takes the form of a balanced budget or whatever other excuse is nearest at hand.
Whatever this ability or lack of ability may be said to consist, the fact remains that the same Government had the ability in fiscal year, 1956, to lose $1,240 million on price supports in warehouse and handling charges, transportation and direct payments to farmers.
Some of that same amount in the hands of Government employees would have resulted in greater consumption and, consequently, less price support loss.
What are some other subsidies which the Government can presumably afford while at the same time display inability-or downright reluctance-to face up to the obligation to its own employees? Here are a few:
Airlines, $40 million; shipowners for construction $100 million, for operations, $125 million; airports $25 million; fast tax writeoffs, $2,673,480,000, or 65 percent of total applied for; agriculture for various reasons, $955 million.
There are many other forms of subsidies, according to one's definition extending into fields remote from the average citizen's realization or comprehension, including tariffs. I am not attempting the merits of any of these, only to refer to them.
But there is still another subsidy few understand and which Government has done nothing about, or cannot. It is the 7 percent markup for the processor and the middleman on food amounting to $500 million, or more than half the total cost of other itemized subsidized herein referred to.
The Government employee is not exempt from any type of gouging. He pays his share of the "freight” on whatever is involved.
It is being proposed that the Government underwrite atomic insurance now at the giveaway rate of $36 per $1 million of potential damage. The Government employee will defray his share of this
giveaway, just as any other citizens, though he is without the means of self-help as are those employed in business and industry.
This supposed inability to pay the fair and honest debts to Government employees can be contrasted with the ability to have acquired the greatest land titles in the history of man, some 773,600,000 acres here and in the territories and in 108 other countries, and valued at $40,300 million. The full inventory of this wealth is in 24 volumes of more than 5,000 pages.
Any private landlord pleading inability to pay his just debts would soon know he must sell off some of his great wealth to meet his bills. Yet, strangely, the Government only pleads poverty when dealing with its employees.
It is nothing new, this recurrent apoplectic crusade against Government employees, postal and nonpostal alike. Time and again, the Budget Bureau and Civil Service Commission sends its full force against this and other legislation. Ramspeck, Young, Ellsworth, all follow the party line, salary, retirement, labor-management. Only main might and force exerted by the Congress result finally in a degree of equity.
The Cordiner report declares:
The Federal Government has lost the advantage it once enjoyed in the area of fringe benefits. In brief, the magnet of interesting work and public service is no longer strong enough to overcome the pull of higher salaries in non-Federal employment.
I would like to divert and get into that phase a moment, Mr. Chairman, because of the discussion and the interest shown by the subcommittee yesterday in the field of fringe benefits.
I have here which I would like to attach as part of the statement an outline bargaining on other provisions in industry and changes in supplementary benefits, copies of which I will be glad to supply to the staff or any others concerned in order that they may have work copies.
Mr. KERLIN. Mr. Riley, I wonder if I might interrupt. While you are talking about fringe benefits is it not true that employees have actually received a reduction in certain fringe benefits in recent years.
Mr. RILEY. We are close in those thoughts, Mr. Kerlin. Because I made a pencil note. There was a time when a Government employee received 30 days annual leave and 30 days sick leave. There was a time when the Federal Government employee was excused from paying State income tax under the reciprocal agreement between State governments and the Federal Government. By the same token, of course, State employees were excused from paying Federal income tax. There was a time until January 1, 1951, when employees of the Panama Canal Zone paid no Federal tax. That was ended by statute as of the date I have just quoted.
Mr. KERLIN. One further question on that point. Do not Federal employees now work a longer work year than they used to? It seems to me that a workweek used to be 39 hours a week
Mr. RILEY. At least 52 hours more a year because there was a time when, as you say, it was 39 hours.
Mr. KERLIN. One week and one-fourth more now?
And one thing that is especially important in my own estimation, and I hope it will be given due consideration: In industry fringe benefits are not part of the pay, they are generally regarded as a package negotiation, package deal as the term goes, over and separate and apart from the basic wage or salary.
In Government, every time you turn around they are ready to throw it at you, "Well, look at the insurance system we set up for you, the unemployment compensation.” I might say that in Government there are no bonuses, no Christmas checks; there is no severance pay. That is accepted as a matter of fact in private industry. It might also be remarked that while no hard and set and fast rule can be stated in comparing or contrasting what goes on in Government and what goes on in industry and business in the field of fringe benefits there are certain outstanding sore thumbs, shall we call them.
I might be working for corporation X and as an employee I would be given the right at a pegged price to buy stock in the company. I notice that in the schedule of gains by various classes of our citizens over the recent years investors have got windfalls, shall we say, or increases in valuations of their investments of some 63 percent.
Now, I am still working for corporation X, a very blue-chip corporation, shall we say, and I buy this at less than you, and you, and you can buy it on the market. I hold it a while, and there comes a time when that stock becomes so valuable that the board of directors recommends that the stock be split 5 for 1 and before long the stock has gone up to its original price and I have 5 times as much representing my investment as I had before.
As I say, Uncle Sam does not even get around to the point of sending a letter of greeting at Christmastime to his employee—much less a bonus check.
Now, I am not saying that he should, but I am certainly not saying that he should not. I am merely pointing out these contrasts in the interest of the very helpful discussion that the subcommittee got into yesterday on the subject of fringe benefits in Government and out.
I request that the document I referred to a few moments ago relating to bargaining on other provisions be incorporated into the record, Mr. Chairman.
Senator NEUBERGER. Without objection that will be done. (The document referred to is as follows:)
BARGAINING ON OTHER PROVISIONS In addition to wage increases, a large majority of all settlements provided for liberalizations in one or more benefit practices. It is estimated that perhaps 70 percent or more of negotiations provided for some such adjustments, and the proportion probably would be larger except for the fact that some negotiations were limited by reopening provisions to wages alone.
By and large the benefit improvements did not break new ground, but rather carried forward trends evident for some time. Broadly, the basic trends in benefit improvements reflected in the year's negotiations can be summarized as follows:
(1) Health and welfare benefits: A great deal of bargaining attention has been focused on this area--that is, life insurance, hospital and medical protection, and pay for absence during illness. About 1 settlement in 3 provided for some health and welfare plan liberalization.
Fairly common, in addition to increases in benefit levels, have been (a) broadening of coverage to medical needs, formerly not covered, particularly
doctor's care outside the hospital; (b) extension of protection to worker de pendents and, at least in part, to retired workers; and (c) revision of financing provisions to reduce or eliminate any requirement for contribution by workers.
In a number of instances, one of several different types of major medical expense or catastrophe plans were adopted to provide greater protection against heavy expenses of major or prolonged illness. (See collective bargaining report for February 1956.)
(2) Pensions: The growth and improvement of negotiated pension plans has continued at a marked pace. The size of pensions has been increased widely so that, when added to Government primary social security benefits, they generally mean retirement income of $150 to $210 a month or more, the amount varying with the particular plan and the worker's earnings and/or length of service.
Noteworthy, too, has been an increase in the number of negotiations providing for vesting rights; that is, rights of a worker to retain accumulated credits toward a pension even if he should leave a company before retirement age.
Among other apparent trends have been an easing of various eligibility requirements and wider adoption and liberalization of pensions for disability retirement. (See collective bargaining report for December 1956.)
(3) Supplemental unemployment benefits : Company-financed plans to provide laid-off workers with benefits to supplement State unemployment compensation, first negotiated on a major scale in 1955, were spread to several major industries.
Such plans had been negotiated for more than a million workers in 1955, principally in the auto, agricultural, can, maritime, and other industries. During 1956, they were newly adopted in at least 74 major negotiations, each involving 1,000 or more employees, most notably in the steel, aluminum, and rubber industries, to raise the total number of workers covered by such plans to more than 2 million.
Broadly, most of these plans provide for company contributions of up to 5 cents an hour to finance benefits which, in combination with State unemploy. ment compensation, provide laid-off workers with up to 65 percent of their normal wage for a maximum period of 26 to 52 weeks.
(4) Paid vacations: The steady trend to longer vacations continued in several forms, as about a third of bargaining settlements provided significant vacation-provision changes.
Service required for a 2-week vacation has increasingly been reduced to 1 or 2 years, gradually moving toward the time when 2 weeks will be generally accepted as the minimum annual vacation.
There has also been significant negotiation of (a) provision for 242-week vacations, (6) reductions in the service requirements for 3-week vacations, and (C) 4-week vacations for longer service workers. (See collective bargaining report for May 1956.)
(5) Paid holidays: There has been a steady stepup in the number of paid holidays as 1 or 2 additional holidays have been negotiated in many instances (probably as many as 1 in every 3 or 4 settlements), normally to make a total of 7, 8, 9, or more.
Provisions for penalty pay for work on holidays also have been revised widely to call for pay at a rate of double time and a half or triple time; that is, regular holiday pay plus time and one-half or double time.
(6) Other benefits : Among other types of so-called fringe benefits which have been adopted or liberalized in a noticeable number of agreements during the year have been (a) severance or dismissal pay, (b) pay for time on jury duty, (c) pay for funeral leave upon death in the family, and (d) paid leave for short-term military training.
CHANGES IN SUPPLEMENTARY BENEFITS
More than 3 out of 4 of the year's settlements established or increased supplementary benefits. Typically, more than one type of benefit was liberalized.
Health and welfare plans, as in 1954 and 1955, were liberalized or introduced more often than any other type of benefit. Such plans were involved in more than two-fifths of the settlements, covering 6 out of 10 workers. Among the major industries changing welfare benefits were basic steel and railroads. The steel contracts provided an additional 112-cent contribution per man-hour from both employer and employee. The railroads agreed to pay 212 cents more a man-hour to extend hospital, medical, and surgical benefits to dependents of nonoperating employees.