Mr. KERLIN. The Cordiner Committee, appointed by the administration made up of outstanding persons from private industry, had some very striking conclusions as follows:

1. Turnover is increasing. The ratio of losses of top scientists and engineers in 1956 was four times that of 1951.

2. Quality is decreasing. Supervisors indicate the best people are leaving; that the replacements do not measure up to those who have left.

3. Many positions remain unfilled. In June 1956, 1 out of every 5 electronic, mechanical, and aeronautical engineering positions were vacant. Situation grows steadily worse.

4. Quantity inadequate. Only 1 out of 8 nontechnical college graduates offered jobs last year accepted. Nine out of 10 science and engineering graduates offered jobs in defense in 1956 declined. 5. Quality is also inadequate.

Those are serious conclusions, but that leads to this: that when the Government for one reason or another is unable to attract personnel, then it has no alternative either to leave the work undone or to contract for the work. The policy of this administration, I believe, has been to contract wherever possible. When we contract, the employees performing the work receive the industrial rate. The contractor obtains a profit. There is the added cost of negotiating the contract and carrying it out.

Now, I ask you, Do you agree with the policy that leads to that inevitable result?

Mr. ELLSWORTH. Well, Mr. Kerlin, I had not thought to consider that in connection with this hearing. I do not know that I can actually give you an answer to that. It is outside the field of my activity since I have been in this new work and I just do not feel confident of giving an expression.

Mr. KERLIN. Mr. Ellsworth, you serve in a dual capacity, personnel adviser to the President, and as Chairman of the Civil Service Commission, and in either or both capacities it would appear to me to be within the realm of your responsibility to consider all those things as having an impact upon the quality and quantity of the service.

Mr. ELLSWORTH. I completely agree with that statement. It just happens that the volume of work piled up before us when the new Commission took office on April 17 was so great and there were so many things that really had to be done immediately that in my capacity as Chairman of the Commission, which carries with it the work of Personnel Adviser to the President, I have been under the necessity personally of doing those things which had to be done immediately and working long hours. I have not had an opportunity as yet to come into the field of study and consideration which is involved here. Mr. KERLIN. I can appreciate that greatly, but I believe, and I would hope you would agree, that it would be most unfair to ask the million and a half Federal employees involved to stand aside and let their needs wait until a changeover in administration or any position has had an opportunity to become fully grounded. We must rely on basic facts and proceed accordingly. Would you not think so?

Mr. ELLSWORTH. That is correct. I do feel, however, that the function of the Commission in a hearing of this kind or in consideration of legislation is to give its basic opinion, which I have done. Then

the committees of both Houses will have an opportunity to gather and present the facts and take them into consideration when the legis lation is considered.

At the moment, I do not feel that the function of the Commission is to attempt to be expert on the subject of pay in connection with these bills.

Mr. KERLIN. May I ask one final question.

You have testified in opposition to a bill. Is your opposition (1) because you think it inflationary? (2) because it will cost money or (3) because you have not had ample time to study the situation?

Mr. ELLSWORTH. The third reason is most important in my own mind. I would like to see-and there is a study going on now by the direction of the President-I would like to see before we add another overall pay increase bill to the present system, if there could be an analysis of the several pay systems so that when and if-and I think when is the better word-an increase in Federal pay is made that it would not be another piece on top of a lot of pieces, but instead would be in connection with a coordinated pay system in the Government rather than a series of more or less unrelated pay systems.

Now, I look at that from a practical, technical standpoint, and in doing that, of course, I have to simply leave out of my mind what I know to be the facts regarding employee needs. But it is a practical, technical thing that we have to deal with in considering our views on this legislation.

Now, with reference to the other two points. We are part of the executive branch of the Government. The Commission, in addition to being the enforcement and the administering agency for the civilservice laws is the employment arm of the President. It would, in my judgment, be less than proper for us to independently take a stand on this matter of pay legislation when it is not within our province under the law to do it.

Mr. KERLIN. Would you agree to a transfusion while the longrange treatment of the patient is being studied?

Mr. ELLSWORTH. I think I know what you mean. I could not officially come here and say that I think something ought to be done to the pay bill at this time, because frankly I do not believe in it; I believe we need a little time before the Commission is able to speak on that point.

Senator NEUBERGER. Mr. Chairman, I would just like to point this out to you, though, that the same confusion, if you want to call it that, or discrepancies have existed for a number of years, and yet, last year, if I am not mistaken, a very substantial pay increase was voted for those occupying executive levels of Government, and, if I am not mistaken, in 1955 a 50 percent pay increase was voted for Congress itself. And I just wonder if we can say that those in the upper echelons of Government should enjoy these substantial pay increases, despite the confusion in pay brackets, but that those at the lower echelons should have to remain anchored to their same scale because of the fact that the various classifications are not synchronized just as they might be. It just does not seem fair.

Mr. ELLSWORTH. Well, I think one followed the other. The general pay increase and the congressional pay bill were effective in 1955 and the Executive Pay Act followed along after that in 1956.

Senator NEUBERGER. Was there a general pay increase of any substantial size in 1955? What are the facts about that, Mr. Kerlin? How extensive was that?

Mr. KERLIN. There was a pay increase in 1955 of 72 percent for classified employees and of a debatable amount with respect to the postal employees because it involved a reclassification along with the pay increase. At the time we were getting reports it was indicated that the pay increase would be 9, 912 percent or some other figure. When it was finally all over the Department said it amounted to 8.1 percent.

Senator NEUBERGER. May I ask you this, further, because I do not have this technical information at my disposal.

Was there any comparison in the pay increases which went to the general run of Federal employees, either classified or postal, as conpared to the percentage increases received both by Members of Congress and by the principal appointees of the executive branch of Government?

Mr. KERLIN. Mr. Chairman, the pay increase for the Members of Congress

Senator NEUBERGER. Was 50 percent; was it not? It was a 50percent increase.

Mr. KERLIN. I think in fairness to Members the record should show that Members did not receive the same increases back over a period of years that other employees have been given.

Then, coming back to the Executive pay bill, the increases there were a great deal in excess of what was received by the rank and file employees.

Senator NEUBERGER. I notice Mr. Macy here from the Civil Service Commission and I just wonder if they could not work out for us the average increases which took place in 1955 or 1956 for classified employees, for postal employees, for principal Executive appointees, and then, perhaps, to have the full record as Mr. Kerlin suggests, for Members of Congress over the period. Let us say over the last 15 years for comparison, so we will have some measurement to go by in all these 4 various categories?

Mr. MACY. We can provide that. Yes, Mr. Chairman.

Senator NEUBERGER. Thank you.

Mr. ELLSWORTH. That probably should show all of this. I like the idea of going back 15 years so you get a true perspective on it, because as Mr. Kerlin points out the salary of Congress was $10,000 for many,

many years.

Senator NEUBERGER. That is correct.

Mr. ELLSWORTH. Until later years, and there was suddenly a rather heavy increase.

Senator NEUBERGER. You are correct about that. One other thing, Mr. Chairman, that I just wanted to point out. In your statement you emphasize the fact that there have to be other advantages to Federal employment than purely salary and you emphasized certain fringe benefits. I do want to call your attention to one thing, however, that as the salary becomes more and more out of line with that in private employment and with the cost of living it necessarily has an adverse impact on fringe benefits.

For example, one letter here from Salem, Oreg., the capital of our State, points out from a postal clerk-Senator, I think you will be

interested in this-that they have always felt that several of the advantages to Federal employment was the regular hours and the quité extensive substantial vacation. But now one of these letters said that 75 percent of our people have had to take outside part-time jobs in order to make ends meet and one man points out that he and his wife have not been able to afford a vacation for 7 years because he has had to work to augment his income during his vacation period. So, I do think one thing has to be taken into consideration, that if the salaries become more and more out of line with the cost of living that they are necessarily going to erode the fringe benefits which formerly have been an inducement to Federal employment.

Mr. ELLSWORTH. I might point out another thing I was thinking of in making the comment about the advantages of Federal employment. There are 2 or 3 other things that would not come under the heading of fringe benefits, but which I think are extremely important. One is the certainty of the pay check, the certainty that the business will go on without mergers or consolidations or changes, or even bankruptcy. That, I think, is a very important thing.

Then, of course, the protection of the career service itself for those who have acquired career status is something that is quite unduplicated in private employment.

Then there is the third, which I like to thing of even if it will not buy and groceries-is there not a saying "man cannot live by bread alone"—and that is the dignity and the position of a Federal employee in our system, in our social life.

Now, while I am Chairman of the Commission I am going to devote considerable effort and time to promoting even further the standing of the Government employee in his community. I think we all must. realize that only about 10 percent of our Government workers are here in Washington or in the Washington area and that 90 percent of our people are out over the country.

Senator NEUBERGER. I would say this, though, Mr. Chairman; when a woman like this lady in Portland has to write the letter to her physician that I have read in part she is deprived of a good deal of her dignity.

Mr. ELLSWORTH. I quite agree with you, Mr. Chairman, that nearly everybody I know really needs a little better income.

Senator NEUBERGER. Mr. Kerlin, do you have any more questions? Mr. KERLIN. No, sir.

Senator NEUBERGER. Senator Morton?

Senator MORTON. No questions. I would like, Mr. Chairman, with your permission to read extracts from a letter that I have received. I do not want to make the letter public nor mention his name, but this man is in an important supervisory position in one of our-I would say medium- to large-size post offices.

He said:

My duties require that I have a good knowledge of the ability, morale, and other general characteristics of each letter carrier. It is necessary for me to have a genuine interest in the welfare of all our letter carriers, rural carriers, and special-delivery messengers. I am familiar with their problems and it is my intention to relate them to you.

He says:

We cannot continue to lose employees at the alarming rate we have during the past few years and still maintain an efficient organization. Despite all the efforts of training supervisors, first-line supervisors, and other key supervisors,

we cannot teach them to stay. We do all within our power but we have more than a supervision problem.

The position of a letter carrier must be made more attractive from a monetary standpoint before this can be accomplished. Their present pay is inadequate by far, particularly those in the lower grades. We must offer a salary that compares favorably with skilled workers in business and industry. We must compete with them if we are to expect employees of the same caliber. If we want men who possess the mentality to learn and the ability and initiative to perform we are going to have to pay for them.

Then in line with what was brought out in the earlier discussion I think this is a significant paragraph:

It is more discouraging to me and to other supervisors to lose men after we have spent a considerable amount of our time and a considerable amount of the Government's money training them. Most of our resignations occur shortly after the employees are promoted to regular carriers, this proves to be a demotion rather than a promotion. Substitutes are allowed the privilege of working in excess of 40 hours per week; the annual take-home pay for substitutes will average slightly above $5,000 per annum, even though straight time is paid for hours in excess of 40 hours per week. The salary an employee gets upon promotion to a regular carrier is $3,660 total per annum should the promotion take place within the first year.

The reason I have quoted from this letter, Mr. Chairman, is that it is a logical presentation, completely unemotional, by one who sees it as a supervisor. He is not speaking for himself; he is speaking primarily for the men under him and he realizes at first hand the difficulty and cost to the Government of losing men as soon as he gets them trained for a permanent job.

Senator NEUBERGER. It seems to me a very pertinent letter, Senator Morton. I am glad that you read excerpts from it.

Thank you very much, Mr. Chairman.

Mr. CHUMBRIS. Mr. Chairman, may I pursue just one point that the Chairman brought out on behalf of Senator Langer?

Senator NEUBERGER. Please go ahead.

Mr. CHUMBRIS. It seems from your summary that you place a greater emphasis on the impact that this will have on your system. Mr. ELLSWORTH. That is correct.

Mr. CHUMBRIS. Now, from your testimony you state that 42 percent of the Government employees under the Classification Act and 34 percent under the wage-board system and 19 percent postal service; now, would you say that this present bill would take care of the 42 percent and the 19 percent?

Mr. ELLSWORTH. I have not actually gone into the details of the bills. I assume that they do provide increases for both of those categories.

Mr. CHUMBRIS. That will take care of 61 percent of the Federal employees. Then, the 34 percent under wage-board systems, and as I would understand it that the wage board would work out what they think is fair compensation and-so, therefore you really only have 5 percent that you have to worry about, and that is the 5 percent that are other acts and Executive orders, so if you should give an increase under this act, the 34 omitted, then there should not be the great complexities that you are referring to; if there are some I would like to have some testimony on it.

Mr. ELLSWORTH. My thought was not with reference specifically to the increase in the pay bills, but it was with the hope that when another increase bill is passed that we can have the analysis of the