Specifically the council has authorized me as operations director to wholeheartedly and without any reservations endorse and support S. 27 to increase the take-home pay for all field service postal employees. Please keep in mind that the field service postal employees and the employees under the Classification Act have only received 1 "teeny-weeny" salary increase in the past 6 years. With two postal employee salary increase bills vetoed by President Eisenhower. With the enactment into law of S. 27 it would bring the field service postal employees salaries to approximately $5,000 and above per annum, which is a modest family income in this great country of ours. S. 1326, having to do with compensation for scientific and professional positions in the Federal Government, is legislation that should have been approved many years ago. From all sides and from the "housetops" we hear the cry that the Federal Government cannot obtain and keep scientific and professional people. This includes all types of technological engineers, research and scientific and professional types of employees. The council several months ago endorsed the provisions of S. 1326 and we trust that this committee will approve our recommendations. Two bills affecting wages and classification of Classification Act employees are before this committee and I refer to S. 734 and S. 910. It is the considered opinion of the member unions of the council having jurisdiction over Classification Act employees that S. 734 is designed to revise the basic compensation schedules of the Classification Act of 1949, as amended. This bill deals extensively with revision of the Classification Act. We are in agreement that the Classification Act is in need of changes but the changes contemplated in S. 734 represent but a small portion of the revision of the law which appears necessary. S. 910 would provide an immediate pay raise and not involve the complex problem of revising all basic features of the classification law. Therefore, the council strongly recommends the immediate enactment into law of the provisions of S. 910, in order to give immediate financial relief of all Classification Act employees. We support generally the intent of S. 734, but believe that S. 734 should be made the study of a long-range program and to completely overhaul in the immediate future the Classification Act structure. Briefly, Mr. Chairman, the council's primary interest is a pay raise without delay for all Federal workers both the Classification Act employees, the scientific and professional groups, and the field service employees of the Post Office Department. Federal and postal employees are greatly in need of additional financial buying power which they have never regained since the start of World War II. Each pay raise received only partially restored the ground lost since the preceding pay increase. Mr. Chairman and members of the committee, there is much more we could say in support of salary increase for Federal and postal employees but we feel that each member of this committee, as well as Members of the Congress, know full well that these salary adjustments are long overdue, so with this thought in mind I am bringing this statement to a close, and with your permission I would like for an article by John Cramer that appeared in the Washington Daily News of May 21 to become a part of the official record of this hearing. THE ARGUMENTS WERE FEEBLE ON PAY RAISES (By John Cramer) Administration spokesmen did a surprisingly lame job yesterday of defending administration opposition to Federal employee pay raises. You could guess their hearts weren't really in it. Their arguments were feeble and unpersuasive. They gave the impression of men attempting to defend the indefensible. And they managed to keep bright and virgin-pure the administration record of never once having claimed that Government-worker raises are not justified. The administration presented its case as a Senate Post Office and Civil Service Subcommittee, headed by Senator Richard Neuberger (Democrat, Oregon), opened hearings on salary increases for the Government's 1 million classified (white collar) employees and its 500,000 postal employees. TESTIFY Testifying for the administration were: Harris Ellsworth, new Civil Service Commission Chairman. Robert Merriam, Assistant Budget Bureau Director. Abe McGregor, Post Office Department Solicitor. They argued against increases on the familiar grounds that they would be costly, and might contribute to inflation. But each, in turn, disclaimed responsibility for the decision to oppose raises. Mr. Ellsworth said it wasn't the Commission's. Mr. Goff said it wasn't the Post Office Department's. Mr. Merriam said the Budget Bureau hadn't examined the case for raisesbut had based its decision on the President's state of the Union message which warned against inflation. LIVING WAGE? Senator Neuberger asked Mr. Merriam: "Do you think postal employees are receiving a living wage?" Mr. Merriam couldn't answer. Senator Neuberger asked if the Budget Bureau had made any study to determine whether postal employees are receiving a living wage. Mr. Merriam said, "None." And neither Mr. Merriam, Mr. Ellsworth, nor Mr. Goff had any answers when Senator Neuberger hammered repeatedly at the theme: "The Government has a responsibility to its employees. If we don't raise their pay, then we must control what they pay for cost of living." Opening the hearings, Senator Neuberger said: "The Government is at a crossroads. Either we must pursue a course of a Federal service second to none, or we decide to accept an inferior, and, in the long run, far most costly Federal service. "I believe that if the Government is unable or unwilling to arrest the forces of inflation or stop the upward spiral of living costs, it has a solemn obligation to see that its own employees do not suffer disproportionately to non-Government workers. "Federal workers alone should not be the only ones to keep the ship of state on an even keel. Their needs and aspirations are as real and pressing as if they were employed in non-Government activity." ELLSWORTH VIEW Civil Service Commission Chairman Ellsworth told the hearings: "We are very much aware of the need to treat our employees fairly." But then he went on to urge that a study of Government salary structures precede any new pay raises. He said this study would take up to 12 months. "I have rarely seen a program of Government," he said, "that is as confusing, bewildering, and even as illogical as today's Federal pay structure." Pay raises for classified employees, he said, "would serve to further unbalance an already confusing and patched-up structure." Mr. Ellsworth told the committee he had not read the Cordiner report which recommended raises averaging 12 percent for Defense employees at grade GS-7 and above. DIDN'T KNOW And he pleaded inexperience in his job (he has been Civil Service Commission Chairman only a month) in saying he didn't know the answers to these questions: How many employees quit the Government last year? (More than 25,000, the committee staff said.) What was the cost of recruiting new employees to replace them? (The figure ordinarily is put at $300 per employee.) What was the cost in decreased production while the new employee is learning his job? (Ordinary estimate: $800.) What is the extra cost of "contracting out" Government functions when Government can't find employees to man these functions? (No one knows the answer to that one.) Don Kerlin of the committee staff made this point: "Government uses two things-people and money. It has raised interest rate it pays for money by one-third, and more than $1 billion per year, since 1953. "It has raised what it pays its people just 7.5 percent for those who are classified employees and 8.1 percent for postal employees. "Does it really believe money is more important than people?" Mr. Merriam said that question was outside his bailiwick. Thanking you and the members of this committee for an opportunity to appear and present the views of the Government Employees' Council, AFL-CIO on the great need of salary adjustments for Federal and postal employees. Senator NEUBERGER. Thank you very much, Mr. Walters. Senator YARBOROUGH. No questions, Mr. Chairman. Senator NEUBERGER. Mr. Paschal. Mr. PASCHAL. Mr. Walters, you were referring to the transfusions before the operation. Now supposing the transfusions were made, in your study, and I ask this because I realize your group does make quite a study of these things, and in your estimation, would the operation still be necessary? Mr. WALTERS. Well, yes, I think it will. At the proper time a general overall study should be made but I would suggest this, that it not be completely made by management. It seems to me that a group from this committee along with some employee representation, along with some management representation, we might well sit down and take a good long look at the pay structures, but I do not think we ought to do all of that while we are waiting to get some additional take home money. We certainly would be willing to sit down with the committee, with the staff people and with a committee from management and endeavor to do a real good job in looking at all the pay structures. Mr. BRAWLEY. Mr. Walters, I have heard a lot about the proposed studies. I wonder what kind of study we are looking for. Hasn't the administration already had two such pay studies? Mr. WALTERS. They have had two or more, called them either commissioin or committee studies, and all of them came out with the same general answer, there is need for more money. Mr. BRAWLEY. Didn't a representative from the Cordiner Committee already testify before this committee? Didn't such a group study the pay structure for more than a year in the Department of Defense? Mr. WALTERS. According to the testimony before this committee and according to newspaper reports and all other things, that is true. Mr. BRAWLEY. My understanding is that the former Chairman of the Civil Service Commission has been heading such a study for the past year and a half. Mr. WALTERS. We have been told that. Mr. BRAWLEY. And such a report is somewhere hidden in the dark corners of the files and probably will never see the light of day. Mr. PASCHAL. Mr. Chairman, I have just one more question of Mr. Walters. In your reference to S. 1326 and S. 27, would it be your feeling or not that rather than set up another new schedule known as SPS, that that should be incorporated into S. 27 or should it be kept separate? Mr. WALTERS. I do not think it should be incorporated into S. 27 because S. 27 deals only with field service postal employees and it has been the tradition over the years that salaries for Classification Act employees and postal field service employees be kept separate, so I would not advocate putting it into S. 27. Mr. PASCHAL. Thank you. Mr. WALTERS. You might consider some way working it into the Classification Act pay bill where the majority or practically all these employees are now listed under the Classification Act but I am sure that we all agree that there is some justification for a study and similar action to what is outlined in S. 1326. Senator NEUBERGER. Mr. Walters, you heard Senator Watkins' statement that he felt some upward adjustment was necessary for postal employees at this time but that he did oppose a general governmental salary increase. How do you feel about that? Mr. WALTERS. Well, I do not agree with Senator Watkins on that interpretation and from following up some answers that he made to you in answer to your question, I do not think he has any firm commitments on that. He simply stated, I believe, in substance that he had the concrete evidence here from these reports and he did not have such concrete evidence from the other employes, but that if he had seen something like that, he might support a general salary increase. But, I think it is general throughout the Government myself and I do not think there is any question about this. Senator NEUBERGER. Thank you very much, Mr. Walters. If there are no other questions, we will have our next witness. We appreciate your coming today and giving us the benefit of your information. Mr. WALTERS. Thank you. Senator NEUBERGER. Our next witness is Mr. Dillard Lasseter, executive officer, Organization of Professional Employees of the United States Department of Agriculture. STATEMENT OF DILLARD LASSETER, EXECUTIVE OFFICER, ORGANIZATION OF PROFESSIONAL EMPLOYEES OF THE UNITED STATES DEPARTMENT OF AGRICULTURE Mr. LASSETER. The Organization of Professional Employees of the Department of Agriculture (OPEDA) was established 28 years ago. Its members do professional, scientific, and administrative work in the various agencies of the Department of Agriculture and in certain other agencies formerly in the Department. They are located in all parts of the country, in the Territories, and in some foreign countries. The members of OPEDA, and other Federal employees in the classified service who are engaged in comparable work, have seen their economic position steadily deteriorate since early in World War II. Their standard of living is substantially lower now than it was then. In the meantime, the great majority of workers in the country are enjoying more real income today than ever before. This is made possible by the tremendous and continuing increase in the Nation's productivity. The following table shows, by grades, the salary increases that have been received by classifified Federal employees since 1939, and the amounts that would be required to restore 1939 buying powers: 1 Under the Classification Act of 1923, as amended, salaries of $9,000 or more for key positions in the executive branch were specifically authorized by the Congress. Some of these positions are now in the new supergrades, GS-16, 17, 18. Others are paid rates specifically authorized by the Congress. 2 Based on March 1957 Consumers Price Index. Attention is called to column 2, "Present annual salary," in the above table, and to the last column on the right, "Salary required to restore 1939 buying power." It will be seen that twice the dollar income is required today to maintain a prewar standard of living. It will also be seen that only in the two lowest grades have classified employees received increases sufficient to maintain this standard. From grade 5 and up, increases of from approximately 10 to 40 percent would be required to restore 1939 buying power. Actually, even greater increases would be required, since the above figures, based on the rise in the Consumers Price Index, do not reflect the very substantial increases in personal income taxes. While the real income of all but the lowest grade classified employees has been steadily shrinking for many years, the real income of most other workers has been substantially increased. As stated above, this is made possible by the great and continuing expansion of the national economy. A report of research published in the U. S. News & World Report (August 3, 1956, pp. 95-97) gives the results of a study of incomes of various occupational groups in the United States. Of the 33 earned income groups reported on in this study, Federal Government workers were at the bottom of the list. As a group, their real income had increased only 14 percent in the 17 years from 1939 to |