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Mr. KERLIN. That is only robbing Peter to pay Paul when you get him from some other laboratory, it puts the problem on their back?

Mr. CLEARWATERS. That is correct.

Mr. KERLIN. Then, when you lose a competent trained person there is a lapse of time before you can find a replacement, then added to that is the year, perhaps, until he becomes familiar with the work? Mr. CLEARWATERS. That is right. Senator YARBOROUGH. Any questions, Mr. Paschal? Mr. PASCHAL. No questions.

Senator YARBOROUGH. Thank you, Mr. Clearwaters, for your concise statement and for summarizing it. That will materially aid the subcommittee.

Mr. Fischer.

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STATEMENT OF MILTON FISCHER, PRESIDENT, ENGINEERS &

SCIENTISTS' ASSOCIATION OF THE SPECIAL DEVICES CENTER, SANDS POINT, N. Y.

Mr. FISCHER. I would like to wholeheartedly endorse the statements of the preceding speaker. With your permission I would like to identify myself and the organization which I represent.

Senator YARBOROUGH. May I request that each witness when he states his name also state the organization that he represents, his position with the organization.

Continue please, Mr. Fischer. Mr. FISCHER. I am an electronic engineer, GS-12, employed in the computer branch of the engineering department at the United States Naval Training Device Center, Port Washington, N. Y. I am a career civil service employee with 15 years and 4 months of Federal service, including 44 months military service.

Mr. Chairman, the Engineers and Scientists' Association, which I represent here as its president, is an employee group, organized under the naval civilian personnel instructions, consisting of 134 members representing over 90 percent of the engineering and scientific personnel of the center. These people are highly skilled and specialized engineers, psychologists, electronic scientists, and other scientific personnel.

The primary mission of the center is the development of training devices for the Navy and the Army. We pride ourselves on being an excellent working example of the unification of the Navy and Army in a research, development, production, and procurement activity. Liaison with the Air Force and procurement of certain training devices for the mutual defense aid program and the Air Force are also included in our mission. The work of the center is carried out in-service and, also, under contract. The training devices we develop range from the most complex types such as simulators of aircraft, submarines and ships, fleet air defense trainers, amphibious assault evaluators, and simulated nuclear explosions for Army maneuvers, to simple oversize mockups of operational equipment for visual aid training.

I have some pictures I borrowed, you might like to see them, concerning some of these devices.

The purpose of this equipment is the improvement of military training with savings in time, money, and in many instances, human life. Pilots and crews learning to fly or transition to later model aircraft can, through the use of weapons systems flight trainers, practice procedures, emergencies, navigation, interception, the use of radio aids and radar, etc. This can be accomplished without the possibility of crashing multimillion dollar aircraft or the loss of life.

Perhaps our most important contribution is in guided missile training. Guided missile crews because of the cost and lethal nature of the weapons are unable to fire real missiles. Through our devices, practice in target search and acquisition, tracking, missile launching and firing is possible. Training devices are being built and used to provide skilled, trained personnel in this field. It is obvious that as the cost, complexity, and the destructive capabilities of operational equipment goes up, the need for training devices and simulators to train, and keep trained, military personnel to operate this equipment, is an economic and military must. In fact, training is our secret weapon.

Mr. Chairman, the recently published Cordiner report, part II, presents an alarming and realistic picture of the national problem in the Defense Department with respect to the compensation of engineers and scientists. It would serve no purpose for me to refer to this report, except to state that its findings apply to us in every respect. It is rather my intention to tell you firsthand of the conditions at the Naval Training Device Center.

In the operation of the center, the GS-12 engineer and scientist represents the senior project engineer, the highest nonsupervisory employee. Because of long service, knowledge, and experience he is assigned the largest, most important projects. The GS-12 is also the source of our ablest supervisors. He is the working backbone of the center.

I would like now to call your attention to this chart which presents the overall picture of engineering losses. In 1955 we lost 10 engineers through resignations, in 1956 we lost 16, and so far this year we have lost 11. If this rate continues, we will lose 23 in 1957.

Now let us examine the picture in terms of the GS-12 engineer only. In 1955, 4 GS-12's resigned, all of whom went to other Government activities; in 1956, 6 GS-12's were lost, all to private industry. So far this year 100 percent of the 11 engineers lost were GS-12's, 9 of whom went to private industry. The center had 52 nonsupervisory GS-12 engineers as of January 31, 1957. On the basis of present losses we will lose 26 GS-12's by the end of the year, or one-half of our total experienced complement.

Here are two definite trends. We are losing the top operating level of engineers at an ever-increasing rate and they are not going to other Government activities, but to private industry.

Exit interviews with the individuals revealed that out of the 11 GS-12 resignations of this year, all but 1 would have remained at the center for a reasonable salary increase. The average salary gained for these individuals in private industry was $1,740, not including overtime.

Another important factor, which cannot be overemphasized, is that with each resignation we lose valuable experience and know-how. In 1955, those leaving averaged 6 years 7 months of Federal service, or a total of 85 years of experience; in 1956, the average rose to 9 years 2 months, for a total of 147 years of Federal service; and, in 1957, it has increased to 10 years 6 months. The total man-years' experience lost in 1957 at the present rate will be 273 years of Federal experience. Thus, with the passage of each year, we are losing more and more experienced people. Since our work relates to a highly specialized military field, operational experience in the military is and has been a valuable asset. Most of our experienced personnel have had valuable military training and experience, which is notably lacking among the newer, younger, just-out-of-school personnel who replace them. The new employee takes longer and does a less satisfactory job, in general, than the man he replaced.

Here we have the same problem the Underwater Sound Laboratory had. Each senior project engineer at the center is a specialist in his particular field, and has projects which are intimately associated with his abilities and specialties. Losing a man of this type means that a project is inevitably delayed or possibly discontinued entirely. The picture for supervisors and other senior engineers is a dismal one, since they have the constant problem of reassignment of projects, training new personnel, and ever-increasing workloads. As an example, in our Air Tactics Branch, which handles projects such as weapons systems trainers for the latest jet aircraft of the Navy and Nike trainers for the Army, 3 of the 4 senior project engineers resigned within 1 month. This left 1 senior project engineer and 2 junior engineers to handle the workload of 6 men, and, in talking to this last senior project engineer this week, he has some doubts about staying.

The net economic result, as far as the Government and the center are concerned, is a tremendous loss of time and money. Projects are delayed while new men are recruited and trained to take over. Money is lost in training new personnel who are unproductive during the long training period. And, finally, contractors work on projects without supervision or control and often with large monetary losses that could have been avoided by expert direction and supervision.

Mr. Chairman, the decision to leave the center is inevitably the result of many pressures, but the precipitating reason is always economic. Less wages, disappearing fringe benefits, poor working environment, loss of community prestige are among the factors which make a Government employee ripe for the industrial recruiter.

The advantages of interesting, rewarding work and educational professional associations in our field tend to lose their appeal as the disparity between our salaries and our industrial counterparts steadily increases. I have spoken with many of my associates facing this difficult decision, and the majority have found that there is no alternative. Many senior scientists and engineers at Government activities throughout the country are on this economic fence waiting for congressional action so that they can decide whether to remain in Government service.

I appeal to you, gentlemen, on behalf of myself and my organization, and with the best interests of our country in mind, to enact favorable legislation this year for the compensation of scientific and engineering civil-service personnel. I realize the economic mood of the times, but I am sure you realize that losing experienced and irreplaceable personnel in the Government service and the concomitant monetary losses, delays, and failures in our scientific advancement in the cold war is a false economy. The alternatives are clear. Either we shall be given help to retain our essential personnel or vital military research, development, and training will be impaired. The interests of economy are best served by retaining competent experienced personnel in the Federal service.

Thank you. Senator YARBOROUGH. Do you have any question, Mr. Kerlin? Mr. KERLIN. I have no questions. I wish to congratulate him on a very fine and impressive statement. Mr. FISCHER. Thank you, sir.

Senator YARBOROUGH. Does counsel for the minority have any questions?

Mr. PASCHAL. Just one question, which you probably touched on in your statement; perhaps I did not catch it. In referring to the big loss to private industry, is that in part due to the current opportunities in the economy of present private industry? Does that have a tendency to fluctuate up and down as opportunities in private industries fluctuate up and down?

Mr. FISCHER. I do not think there has been any change, sir, in the opportunties in private industry since the Korean war. There has always been an opportunity, but the disparity in salaries has steadily increased so that there is very little alternative. The gap is so large now that any possible advantages of staying in Federal service tend to lose significance. Mr. PASCHAL. Thank you. That is all I have.

Senator YARBOROUGH. Mr. Fischer, I want to congratulate you on this fine statement. I think the finest analysis I have read of the various factors that go into the decision of a governmental employee when he leaves governmental service, where you have included the factor of compensation, of working environment, of fringe benefits, of community prestige, and all the factors. I think it is consideration of all of those factors; it is an extremely able and valuable statement, and the committee will receive it and file it as part of the record in the case. Mr. FISCHER. Thank you. Senator YARBOROUGH. Mr. McCabe.

STATEMENT OF E. W. McCABE, CHAIRMAN, COMMITTEE ON LEG

ISLATION, NATIONAL ASSOCIATION OF INTERNAL REVENUE EMPLOYEES, NASHVILLE, TENN.; ACCOMPANIED BY OWDEN T. DUMAS, FIRST VICE PRESIDENT, NATIONAL ASSOCIATION OF INTERNAL REVENUE EMPLOYEES, TYLER, TEX., AND A. J. GENIESSE, SECRETARY-TREASURER, NATIONAL ASSOCIATION OF INTERNAL REVENUE EMPLOYEES, MILWAUKEE, WIS.

Mr. McCABE. Mr. Chairman, I am Edward W. McCabe, chairman of the committee on legislation of the National Association of Internal Revenue Employees. I am from Nashville, Tenn. I am accompanied here this morning by our first vice president; he is from your great State of Texas, Mr. Owden Dumas, of Tyler, Tex.; and our secretaryI am an employee of the Internal Revenue Service, and am here on annual leave from my position in the district director's office, Nashville, Tenn. Our association is composed only of internal revenue

both clerical and technical employees.

At our national convention in Buffalo, N. Y., in September 1956, our association went on record as favoring a pay raise of 1712 percent. This percentage was determined because the cost of wages of internal revenue and other classified employees has not kept pace with the rise in the cost of living since 1939. The internal revenue employees' real income has risen but 15 percent since 1939 over the position it held in comparison to the cost of living at that time.

The New York Times in April 1957 pointed out that there are four major kinds of prices which make up the cost of living: service, food, nondurable, and durable goods. Of these, service is now the most important. This is a catchall group, including everything from haircuts and shoeshines to straightening dented fenders, from bus tokens and electric bills to mortgage interest and medical bills. The Bureau of Labor Statistics shows that the price of service has gone up faster than any of the others. Since 1949, the cost of living has risen roughly 18 percent, but the cost of service has gone up more than 25 percent. What is more, the cost of service has been in a steady uptrend, uninterrupted even during the years when overall prices were steady. The cost of education has increased. Most of these so-called services are in a "must" category.

I feel that a very favorable argument can be advanced in favor of the pay raise. We have had no basic increase for more than 2 years. The last increase was in March 1955. The average salary paid during this period to all manufacturing employees has gone up more than 11 percent from $1.85 to $2.05 per hour. The policy which has been advanced by the administration is to hold Federal employees' salaries at their present level and to reject as inflationary any pay raise for these employees. However, this policy is inconsistent as it applies only to classified, postal, and a few smaller groups. There are 660,000 per diem or wage board employees in the Government service. Most of these per diems, laborers and mechanics, have been given two basic pay raises since the last classified and postal boost. Salarywise, the per diem employee is fast becoming the favorite in the Government. It is creating a serious problem, also, among supervisors, since the supervisors are under the classified act and the per diems, with their increases, are now getting more salary than the supervisors. Last year 485 per diem employees were paid salaries of $10,000 or more, so it can easily be seen that the present policy penalizes classified and postal employees.

I hope that you gentlemen will agree that some adjustment should be made in the Federal classified employees' salaries. If the Federal Government is to attract and retain persons of intelligence, integrity, and industry to effectively and economically conduct its essential functions, adequate salaries must be paid to its public servants. To be able to obtain the high caliber of employees necessary for the efficient handling of our National Government, we should pay salaries comparable to big industry. After all, we are the largest employer in the United States.

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