We have found that differential in line with the practices in private industry. That differential was established for the first time in Public Law 68, under which a level 7 foreman receives $1,050 more than a level 4 clerk or carrier, when all are at the top steps of their levels. Before enacting Public Law 68, the Congress devoted much time to studying the salary structure and approved basic principles which are sound and reasonable. We feel that any pay adjustment made by this session of Congress should continue those basic principles by maintaining the percentage differentials which now exist. S. 27, the bill now under consideration, would destroy the basic principles of Public Law 68 and the basic principles of good management and good business by reducing not only the percentage differential, but also the dollar differential. The differential between foreman and clerk or carrier would be reduced from $1,050 to $800. The differential established between different supervisory levels should not be reduced, as would be done if S. 27 should become law. Historically, our association has favored percentage increases, so that a favorable balance can be maintained between positions in different salary levels. We do not believe that the present ceiling of $16,000 is sacrosanct. We believe that it can and should be increased. By removing the ceiling, there will be room for adjustments at higher levels so that the whole salary structure, as set up by Public Law 68, will not be thrown out of balance.

Our association held its national convention in Omaha, Nebr., during September 1956. After lengthy and well-considered study, our national officers were mandated to seek a 15 percent salary increase for all postal employees. The 15 percent figure was not arrived at without a detailed analysis of standards of living and salaries of our counterparts in industry. In the Wall Street Journal of August 8, 1955, there was an article giving the results of a survey made by the American Management Association. That survey showed that the first-line supervisor in industry earned $6,241 per year. A 15 percent increase in the salary of the first-line postal supervisor would bring his salary up to $6,280, in the top step of level 7. We know that the duties and responsibilities of first-line supervisors in industry are no greater than those of our supervisors. A 15 percent increase in salary would still maintain the differentials established in Public Law 68.

Studies made by various groups all bear out the fact that we need a salary adjustment. Other studies are being made or are in the process of being made. In the meantime, our members are being caught in the economic squeeze. There is no good, sound reason for not adjusting salaries immediately. Studies can be made after such adjustments. While such delays are being made for further study, the cost of living is increasing. Salaries in industry and prices do not stand still while studies are undertaken. We believe that it is time that the usual method of a study first and then a possible adjustment should give way at this time to an adjustment first and then a study. Cost of living figures show that families need more money for minimum existence than the maximum received by many supervisors. There are members of our association who receive less than $5,000 in annual salary. We have not been able to find any examples in private industry where a reasonable number of people is employed

where a supervisor receives such a low salary. We hope that that condition is corrected during this session of the Congress.

The members of our association are deeply appreciative of the efforts of Senator Johnston and the other Senators, including the distinguished chairman of this subcommittee, who sponsored S. 27, but we do not feel that the postal supervisors' interests were taken fully into account. We urge you to give consideration to the proper relationship between supervisors and the employees supervised as well as between supervisors of different salary levels in making any salary adjustments.

We appreciate the indulgence of subcommittee in permitting us to present our testimony and thank the chairman and the members.

Senator NEUBERGER. Our next scheduled witness is Paul M. Castiglioni, legislative representative, National Federation Post Office Motor Vehicle Employees.

Mr. KERLIN. Mr. Chairman, Mr. Castiglioni informs me that he is unable to appear at this time but that he will submit a statement.

Senator NEUBERGER. It will appear in the appendix to the record. I should like to say this concludes our schedule of witnesses. I want to read a very brief statement and make a very short closing statement and, if Senator Yarborough has anything to say, I hope he will likewise do so.

On behalf of the subcommittee, I wish to thank the many witnesses who have appeared at these hearings for the great amount of factual information presented and for the splendid way in which they have cooperated to the end that these hearings might be concluded without undue delay.

I have been impressed with the earnestness of their testimony and wish to state that, in my opinion, a convincing and irrefutable case has been made for a pay increase for Federal employees during this session of the Congress. I can give you assurance that the subcommittee will consider seriously the evidence received and will do all within its capacity to report its findings to the full committee as promptly as possible.

I want to add that I have been impressed by the fact that we have had direct evidence here from people personally and in the form of information gathered by polls and surveys that there are employees of this great Government of the United States who are not enjoying what we would regard as virtually a minimum American standard of living and it does seem to me that such a situation cannot be tolerated and cannot be continued.

Just speaking for myself alone, I feel the greatest obligation in this respect to those near the bottom of the ladder and to many in the middle-income brackets in our Federal employees' pay scale who just simply cannot keep up with today's living costs in the United States, and I would like to repeat what I said when we opened these hearings approximately a week or 10 days ago, that I do not see how the administration can successfully or justifiably maintain opposition to a pay increase as long as it is unable to control the cost of living.

It seems to me that is the meat of the coconut and that as long as what these people have to pay for shelter, for medical care, for food and for other necessities of life continues to go up that their pay has to go us somewhat commensurately.

I noted in the New York Times for May 25 an analysis of how the cost of living has risen between 1950 and April of 1957, which I think is the latest month for which complete BLS reports are included, and I just want to read these here because it seems to me these are illuminating.

These are the various brackets of the necessities of life in which the cost of living has risen between 1950 and 1957: All items, 17.2 percent; food, 13.2 percent; housing and lodging 19.4 percent; apparel, 10.4 percent; transportation, 23.3 percent; medical care, 29.9 percent; personal care, 24.3 percent; reading and recreation, 9.1 percent; other miscellaneous goods and services, 19.8 percent.

Now, those all involve the necessities of life such as food and medical care and so on, and when those necessities have gone up this much, I do not see how the administration can maintain opposition to an increase in Federal pay, and I want to say this is not the place to criticize the administration because the cost of living has gone up. I do not criticize them for that. That might be done by some Ĉommittee on the Joint Economic Report or the Finance Committee, but certainly, that is not within the jurisdiction of our committee. But, inasmuch as the cost of living has gone up, as has been demonstrated by these figures, how can the administration ask that the pay of Federal employees, postal employees and all other employees, not be adjusted upward to some extent? That is what I think is the nub of the whole situation.

I want to express personally my very great appreciation to the committee staff, to Senator Morton, who has attended many of the hearings; to representatives of the minority who have been here; to Mr. Kerlin and Mr. Brawley, and particularly to Senator Yarborough, who is a new Member of the Senate, a new member of the committee and a new member of our subcommittee, for the faithfulness and fidelity he has shown to this problem.

There are many Federal employees in his vast and great State, and I am sure they share my appreciation of his faithful attendance and his deep personal interest in this matter.

Senator YARBOROUGH. Mr. Chairman, after this fine summary of this problem by the chairman, I do not think that there is any necessity for my taking any additional time.

I merely wish to state that in this hearing, I have heard and read the greatest quantum of factual information on one subject that I have ever personally read or seen presented in any one hearing in that comparable length of time before in my life.

I fully concur in what the chairman has said about the necessity for these raises, and I wish to state this fact. This spring, I have made a number of public speeches in Texas, specifically advocating these pay raises, stating what they were and giving the number of the bills and I did not receive a single letter of protest or opposition to these raises from any person there though that advocacy of these raises was stated by radio and TV, as well as in public meetings of postal and other governmental employees. I believe the people will support us in this raise that this subcommittee knows is so badly needed.

Senator NEUBERGER. I think that is a demonstration, Senator, that the people of Texas, like the people in the other 47 States, are fairminded people.

Senator YARBOROUGH. I believe the people are fair-minded people and will support the action of this subcommittee, and I hope that becomes the action of the whole committee and ultimately of the Congress of the United States.

Senator NEUBERGER. I do, too, Senator, and I want to thank you again.

I want to say as we conclude, that today is May 27, 1957. I have consulted with Mr. Kerlin, and we will keep the record open for 1 week for supplementary and additional statements provided they are of reasonable length, which would be June 3, 1957.

The record will be formally closed at 5 o'clock on June 3, and statements will not be received after that.

We thank you all for your cooperation and your attendance, and. we are in adjournment.

(Thereupon, at 12:15 p. m., the subcommittee was adjourned.);

APPENDIX

(The following statements and communications have been received pertaining to the hearings on S. 7, S. 734, and S. 1326:)

STATEMENT OF HON. THOMAS M. PELLY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON

Mr. Chairman and members of the Subcommittee on Federal Employees Compensation, I wish to thank the committee for this opportunity of presenting testimony in support of a salary increase for Federal employees.

The salaries of classified and postal employees of the Federal Government, in my opinion, should be increased without delay. I can say, as far as Seattle and the State of Washington are concerned, these employees are desperately in need of added buying powers in their wages because they have never regained fully the economic position that existed at the start of World War II.

In my opinion, this would be provided equitably in the bills (H. R. 3646, H. R. 5243 and H. R. 7041) I introduced early in the present session. H. R. 5243 is only a pay-raise bill and is not concerned with the correction of other aspects of the Classification Act. There are changes needed in that act, but they cannot be given adequate consideration soon enough to provide a salary increase and at the same time correct the inadequacies in the law.

Mr. Chairman, I submit that prompt action is needed. For example, let me cite the statistics covering Post Office employee separations in my own city of Seattle. In the 12-month period April 15, 1956, to April 15, 1957, 357 clerks, 253 carriers and 75 mail handlers were separated, and in the 4 months between January 1, 1957, and April 30, 1957, the separations included 155 clerks, 109 carriers, and 22 mail handlers. This clearly indicates the underlying result of the serious plight of these employees. Inasmuch as their last pay raise was the only change in basic pay rates within 6 years, it seems rather clear that every effort should be made to avoid further delay.

Many employees in private industry have moved far ahead of Federal employees. They not only have been keeping pace with the rising cost of living but they have been able to improve their standard of living. This is indicated very emphatically in the substantial increase in average weekly earnings of factory workers from $23.86 in 1939 to $82.41 in February 1957, an increase of 245 percent.

This advance in weekly earnings of workers outside Government points up the rate of progress employees of industrial and commercial concerns have been able to achieve. During this same period the entrance rate for a GS-3 position has increased less than 100 percent, and has not yet reached a cost-of-living level equal to that of 1939. It is apparent that the overall advance of earnings of employees in industry is not equalled by the increases of pay of Federal classified employees.

The same reasoning applies with equal validity to postal workers.

It seems only fair that salaries of a group of employees who must depend on legislation for changes in their rates of pay should receive frequent attention. We owe it to them as individuals and citizens; and to have efficient Government and qualified employees we must have good morale, with employees who are reasonably satisfied with their jobs, and not worrying about meeting living expenses. There is no greater cause of dissatisfaction than to be doing a good job, which most Federal employees are doing, yet not receiving recognition for it. This is particularly true when prices are advancing so as to make it increasingly difficult to meet the expenses of even the most modest standard of living.

I am most heartily in favor of quick action on a pay bill. I have repeatedly stated that a desire for cutting the Federal budget in no way should influence