wide turnover of 21.9 percent which covered all job categories. However, Los Angeles County postmasters fix the figure at 33 percent. For the record, Mr. Chairman, may I submit a marked article from the official publication of our local, The Live Wire, containing detailed results of our study?

Senator NEUBERGER. Without objection it will appear in the record. (The document referred to is as follows:)

LOCAL 64 SURVEY REVEALS SHOCKING TURNOVER OF CLERKS

(By John W. MacKay)

A detailed survey of personnel changes within the Los Angeles post office has just been completed by Local 64, National Federation of Post Office Clerks (NFPOC) and the results reveal a shocking and alarming trend in the turnover of clerical employees in 1956.

For the past year local 64 officers have been aware of the many personnel changes but heretofore no detailed analysis revealed the extent of this transient condition.

POSTMASTER AND ASSISTANT POSTMASTER INTERVIEWED

Following the local's survey a meeting was requested with the postmaster to discuss the problem and to urge his support of a program to halt the mass exodus of employees. At this interview Postmaster Otto K. Olesen was joined by Assistant Postmaster E. W. Schneringer and the local was represented by Secretary Harriet O'Brien and President MacKay.

The postmaster was visibly disturbed over the findings of the local's survey, which revealed an approximately 31-percent turnover of clerical personnel, and at first labeled them "incorrect." He submitted figures from a similar survey prepared for him by the personnel section. However, the personnel section report, detailing a 21.9-percent turnover, covered all categories of employees and not just clerks. However, general agreement prevailed during the interview that low postal salaries had proven the greatest contributing factor to the deplorable employee turnover. The postmaster expressed his hope that the federation and other postal unions would succeed in their current campaign to win congressional approval of the postal pay bill.

Local 64 representatives emphasized that resignations had also materially increased due to management's reluctance to agree with union leaders in the administration of classification under Public Law 68, the simplification of the Los Angeles City primary scheme and the improvement of labor-management relations on the workroom floor.

COOPERATIVE ACTION PLEDGED BY POSTMASTER

In stressing his interest in the welfare of Los Angeles postal employees Postmaster Olesen outlined as his "immediate and long-range goal" a 3-point program to include

A. The improvement of management-employee relations.

B. Better production and efficiency by management-employee joint action. C. Identification and improvement of major problems and gripes. The postmaster and his assistant enunciated, in general terms, their future plans to eliminate crowding on the work floor through a rearrangement of facilities, to provide additional space for the terminal annex cafeteria, and to lessen employee fatigue through the installation of mechanical equipment.

AGREEMENT REACHED

Immediately prior to the conclusion of the hour and a half long meeting general agreement was reached with the postmaster and Assistant Postmaster Schneringer concurring with the local's president when he stated that the sincerity of purpose evidenced by the postmaster to improve working conditions and management-employee relations was abundantly clear in Mr. Olesen's officebut not generally shared by supervision on the workroom floor at terminal annex and in many stations and sections. It was pointed out by the president that the fine statements appearing in the Los Angeles Postal Report, issued by the postmaster, had not provided much improvement in the day-to-day contact between clerks and a number of line supervisors. Petty writeups, harassing case

checks, difficult scheme requirements, cancellation of annual leave, false economy maneuvers, and other grievances were cited as contributing to the job classification that had swelled resignations.

Acting with sincerity to improve conditions Postmaster Olesen agreed to work with representatives of local 64 in an effort to achieve agreement on the following 4-point program which the local had previously submitted to him in January 1956 to reduce employee turnover:

1. Simplification of the Los Angeles City primary scheme; preferably through a geographical separation.

68.

2. Application of training section teachings on the work floor.

3. Recognition of seniority in filling clerical positions under Public Law

4. Rest bars at facing tables.

POSTMASTER'S STATEMENT SUBMITTED

Following the meeting President MacKay invited Postmaster Olesen to submit any statement he deemed advisable concerning the turnover problem and the issues discussed above for publication in the Live Wire. The postmaster accepted the offer and his letter dated March 28, 1957, is submitted herewith in full for the attention of the federation membership.

POSTMASTER SURVEY ON TURNOVER

MARCH 28, 1957.

Mr. JOHN W. MACKAY,
President, Local 64, NFPOC.,

Los Angeles, Calif.

DEAR MR. MACKAY: In response to your request this morning I am furnishing the following information relative to turnover. The following is a tabulation of the reasons for separations during the calendar year 1956. These figures include all employees, for I do not have at the moment a similar tabulation referring only to clerks.

1. Other employment (125 specifically stated because of higher pay) 2. Personal reasons.

3. Health reasons_

4. Returning to school.

5. Inefficiency

6. Leaving city.

7. Schemes___

Voluntary separations_.

Involuntary separations.

8. No reason given__.

9. Arrest and false statements.

10. Night work.

11. Debts__

12. Theft of mails_

13. Military service_

14. Termination of temporary appointments.

15. Transfers_.

16. Retired__

17. Death___.

18. Departmental removals_

19. Absenteeism and tardiness

20. Finances_

21. Abandonment_

435

287

145

199

166

125

131

28

103

38

85

19

12

12

6

4

244

192

21

66

27

6

11

2

22. Loitering_.

Total--

2, 233

The above total represents 21.9 percent turnover at this office for 1956 and I have reviewed it with grave concern. We are exploring every means possible to improve this situation and any constructive suggestions are certainly wel

come.

It is generally believed that our problem is immediately related to the labor market situation in this area. I have had recent studies made as to the incident of turnover in other large employing agencies for the calendar year 1956 and the charts and voluminous figures are at my office available for your perusal at any time. Without going into them in great detail it would be well to show

the following figures relative to percentage of turnover in certain of the larger companies and industries.

To fully understand and analyze all the figures furnished above, including those relating to the reasons for our turnover, would require considerable space and a detailed report.

I believe you would be interested in the following figures which point up a very pertinent problem. For the period June 8 to July 26, 1956, 3,702 persons applied and were scheduled for the clerk-carrier examination; 2,038 appeared and only 312 passed. A few months later, or for the period October 3 to November 30, 1956, 4,814 applied and were scheduled; 2,442 appeared and 326 passed. I am having a thorough study made covering the individual records of employees lost through voluntary resignation during 1956. The first preliminary report to me on this subject reveals no pattern of age group or other common point of comparison to assist in our future planning. We are going to keep trying and obtain, if possible, the answer to the question, "How could this particular resignation have been avoided?" The personnel section has recently submitted several recommended actions which appear to have merit, such as more detailed interviews and information booklets for our new employees, and action has already been taken to place those suggestions into effect.

As I told you yesterday in the meeting in my office this problem is important to both you and your organization as well as myself and I'll be most happy to receive any suggestions or comments which will benefit us.

Sincerely,

Mr. MACKAY. Thank you.

OTTO K. OLESEN, Postmaster.

Our postmaster has emphasized that, for the period June 8 to July 26, 1956, 3,702 persons applied and were scheduled for the clerk-carrier examination, 2,038 appeared, and only 312 passed. A few months later, or for the period October 3 to November 30, 1956, 4,814 applied and were scheduled, 2,442 appealed, and 326 passed.

Following this experience the office requested civil service clerkcarrier examinations be opened on a continuing basis and the letter carriers of the cities distributed approximately 500,000 applications to all residents to recruit additional help. However, the results of this recruitment effort have been most disheartening for the simple reason that postal salaries are not sufficiently adequate to attract new personnel and, more tragically, are proving insufficient to maintain the existing work force of career employees. Many with 15, 20, or even more years of service are leaving, cashing in their retirement and seeking better paying positions elsewhere.

The CHAIRMAN. Just one thing. Back here I noticed you give an amount that passed, that is a very low figure in each instance. What was the reason? Do you have any reasons to give for that?

Mr. MACKAY. Senator, the only reason we can attribute to it is that the caliber of persons attracted to the examination, their intelligence was such that they just were not competent or capable of qualifying on the examination.

The CHAIRMAN. Do you have any estimate of what it costs to have these examinations made per person?

Mr. MACKAY. No, sir; we do not. But we feel positive that the Civil Service Commission could supply you with that information. The CHAIRMAN. Well, I think it would be helpful and well to get that. We can show how much it costs to fill a position in that way. Senator NEUBERGER. I think it would be very helpful, Mr. Chairman, and, Mr. Kerlin, will you endeavor to get that information from the Civil Service Commission so we can complete the record?

The CHAIRMAN. If you will notice, this is just a little over 10 percent that take the examination passed.

Senator NEUBERGER. I think it is very significant.

Mr. MACKAY. Previous testimony has been submitted by spokesmen for the Post Office Department emphasizing that turnover is low and restricted to specific areas. However, the Civil Service Commission reports for the year 1956 indicate the postal service turnover is comparatively high.

During this period, 79,846 employees were hired while 61,942 were separated. Based on a total work force of approximately 500,000 employees, it is evident the nationwide turnover of postal personnel is such as to entail a fantastic expense in consideration of the cost involved in new-employee recruitment, hire, and indoctrination roughly estimated at $1,500 apiece. The Hoover Commission recenty set the figure at $3,000 per Federal employee. With these figures in mind, it is evident the Post Office Department is experiencing an annual loss approximating $100 million on turnover.

2. The post office-a business or a service: In our contacts with Members of Congress we hear considerable reference to the cost of postal operations, alarming statements directed at the so-called postal deficit and the necessity of increasing postal rates in order to balance the postal budget. Some Members have also expressed the opinion that no increase in postal salaries should be considered until a postal rate increase measure has been approved and signed into law by the President.

Mr. Chairman and members of the committee, we take the position that there is no relationship between postal rates and postal salaries. We believe it highly unfair for pay scales of postal personnel to be determined by the volume of postal revenues.

Very recently the Citizens Advisory Council, established by the Senate, submitted a very revealing report concerning many items in the postal budget. Following the issuance of this report, statements were submitted to the Senate committee by the Postmaster General and the Deputy Postmaster General to refute the decisions made by the Advisory Council. We are not here to take sides in this apparent controversy, but we feel it necessary to point out that during 1955 the so-called postal deficit was set at 426.7 million. The answer from the Post Office Department, however, emphasized that the figure was outdated; that more attention should be given the antici

pated 1958 deficit of $651 million. In reading the statement by representatives from the Post Office Department, however, we noted that this $300 million increase was anticipated because

(a) Public Law 68 was enacted by Congress in 1955, the result being that $191 million of this pay increase and other fringe benefits are now a part of postal cost but are not reflected in the deficit figure for 1955 as used by the Council; and

(b) The 1956 amendments to the Civil Service Retirement Act will require the Post Office to pay 612 percent of its payroll, an amount expected to be around $131 million. It was claimed the Council did not consider this item.

From the above it can be seen to what extent postal employees are being held responsible for a so-called postal deficit which, in this instance, is not produced by an increase in mail-handling cost, but through legislation enacted by the Congress to improve postal salaries and retirement.

The CHAIRMAN. Is it not also true, when they are discussing that, they give that as one of the fringe benefits?

Senator NEUBERGER. Of course.

Mr. MACKAY. At this time, Mr. Chairman, we wish to insert in the record another article appearing in our official paper, The Live-Wire, entitled "The Post Office-A Business or a Service."

Senator NEUBERGER. Without objection, it is so ordered. (The document referred to is as follows:)

THE POST OFFICE-A BUSINESS OR A SERVICE?

Interviews with Los Angeles County Congressmen and reports from Washington indicate that a hysteria of "economy at any price" has combined postage rates and postal pay into an extremely controversial issue with respect to the postal budget.

This situation has produced unfair criticism against postal employees to such an extent that they are being charged with the need of shouldering the burden of so-called deficits in a manner completely nonexistent with respect to employees in other Federal agencies.

The Live-Wire contends that the question of postal workers' pay, just as rates of pay for employees of other Federal bureaus, should be determined on a basis of wage standards used in private industry, for positions of comparable skill and responsibility, to provide a decent standard of living, as typified by the Heller committee, University of California, which illustrates a wage earnerhomeowner family of 4 had a budget need of $5,849.67 in 1956.

In 1954 the Senate authorized the appointment of a Citizens Advisory Council to settle once and for all this question: "To what extent is the Post Office primarily a public service, which like other Federal departments and agencies, is adjudged worth what it costs, or is the Post Office primarily a business which should take in at least as much money as it spends"?

The Live-Wire maintains that the question of postal rates should be determined solely by Congress, acting on the recommendations of the Post Office Department. The question of postal salaries is a separate and distinct subject and should not be tied in with postal rates.

The Citizens Advisory Council takes the position that the Post Office is primarily a public service and that the so-called postal deficit is a misnomer. The Post Office Department challenges this position in a vigorous condemnation asserting that "the Post Office" is a "public utility" whose costs should be "paid by the users and not from general taxation."

In the interest of clarification, the Live-Wire presents the following pertinent comments on each side of this postal "public service versus public-business" controversy.