STATEMENT OF MAURICE H. STANS, DIRECTOR OF THE BUREAU OF THE BUDGET, BEFORE THE COMMITTEE ON POST OFFICE AND CIVIL SERVICE OF THE SENATE ON FEDERAL EMPLOYEE PAY LEGISLATION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP91-00965R000400110022-1
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 22
• Document Creation Date: December 15, 2016
• Document Release Date: January 9, 2004
• Sequence Number: 22
• Publication Date: April 28, 1960
• Content Type: STATEMENT

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EXECUTIVE OFFICE OF THE PRESIDENT
BUREAU OF THE BUDGET
WASHINGTON 25, D. C.
FOR RELEASE ON DELIVERY
Expected at 10:00 a.m.
Thursday, April 28, 1960
STATEMENT OF MAURICE H. STANS,
DIRECTOR OF THE BUREAU OF THE BUDGET,
BEFORE THE COMMITTEE ON POST OFFICE AMID CIVIL SERVICE OF
THE SENATE ON FEDERAL EMPLOYEE PAY LEGISLATION
Mr. Chairman and Members of the Committee:
We appreciate this opportunity to present to you the Administration
position on Federal pay legislation.
The Administration finds no justification at this time for the
enactment of any legislation which would provide general increases in
salary rates under the Classification Act, the Postal Field Service Pay
Act, and other statutory pay systems.
We do endorse legislation such as proposed in the Budget Message
and transmitted by the Postmaster General to make permanent the temporary
2z%'increase under the Postal Field Service Pay Act of 1958.
We do favor adopting an orderly, valid and fair approach to statu-
tory career white collar pay fixing in the future. This is the position
stated by the President. in the 1961 Budget Message.
In this statement I will not only make quite plain our opposition
to general pay increase legislation, but I will also outline the approach
to Federal white collar pay fixing which we believe would be equitable
and of permanent usefulness.
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The reasons for our opposition to a general increase are these:
1. Enactment of any general. salary increases now would ignore
the only sound principle of Federal pay fixing,. which is
reasonable comparability with private enterprise salary
rates.
2. Based on information presently available, enactment of any
flat percentage or-dollar increases would result in exces-
sive salary rates for some grades and possibly inadequate
salary rates in other grades.
3. Any general salary increase would be without sound factual
justification. The information
need for adjustments in Federal
will be available in September,
necessary for judging the.
white.collar salary rates
when a survey authorized by
the Congress last year will be completed. Until then the
need for any salary increases cannot be appraised.
Lt. Enactment of any general increase legislation would emphasize
existing inequities in the Federal white collar salary
structure and would set new obstacles to achieving the
improvements and controls which. are essential to carrying
out the principle of equal. pay for equal work., with pay
relationships among grade levels reasonably reflecting
differences in duties and responsibilities.
All of this leads up to a major issue. Enactment of general salary
increase legislation, on the basis of no established principle or factual
justification, would result in an unwarranted expenditure of Federal
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funds. That, in the face of the Government's budgetary problems, would
be fiscal irresponsibility.
The fact that we have a projected $)..2 billion surplus in our
budget for 1961 may suggest to some that we could absorb pay increase
costs, but even if this were so it can be no ground for excessive
Federal pay scales. A budget surplus such as is projected in the 1961
budget is not a certainty, but a forecast which is based on recommenda-
tions by the President which require acceptance by the Congress. This
estimated surplus of $!i..2 billion is contingent on the extension of
corporate and excise tax rates, the enactment of legislation to in-
crease postal revenues and the aviation fuel tax, and the realization
of the receipts and expenditures estimates shown. in the budget. There-
fore, there are many variables which could affect the outcome in 1961.
But, regardless of that, Federal pay issues should be dealt with on
their merits and not on the availability: of a surplus out of which they
might be financed.
Furthermore, it would be unfortunate if action to increase Federal
salary rates without factual justification had the result of encouraging
unjustified private industry wage and salary increases, which in turn
could increase inflationary pressures.
Administration Objections
Our first objection to general pay increase legislation is that
no sound principle has been established for determining whether a
Federal white collar pay adjustment is needed, or how much. The Congress,
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the employee organizations, and the executive branch over the years have
considered a variety of factors which, although in some degree pertinent,
are not definite measuring sticks. For-example, there have been argument-s
over the cost of living, productivity, general wage trends, industrial wage
averages, living standards and family budgets, movements in general
economic indicators, and difficulties in recruiting and retaining staff.
It is true that all have been taken into account in fixing pay in private
enterprise, but these factors do not provide a satisfactory means, either
selectively or in combination, of measuring.and adjusting Federal white
collar pay. The only sound course is to adopt the principle of setting
Federal -employee pay at rates comparable with those paid by private
employers.
Our second objection is that a general pay raise. now would result
in excessive rates for some grades. The private enterprise salary data
now available from the current Bureau of Labor Statistics Community
Survey in the first30 cities to be completed indicate that the current
Federal rates for some white collar grades already exceed the national
average rates which will be reported to be paid in private enterprise
when the survey is completed. While Federal rates for other grades may
be shown to be lower than private industry rates, it is clear that a
general pay raise. now, whether it is 23% or 10% or 2%, cannot be justi-
fied.
Our third objection is that any action now would increase Federal
salary rates before the facts are known as to private salary levels.
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The Bureau of Labor Statistics is now conducting a survey which when
complete will report private salary levels for 60 metropolitan areas.
Having set this survey in motion the Government should not ignore its
existence. We urge that decision be postponed until all the facts are
Our fourth objection is that unwarranted Federal salary increases
that place any salary rates out of proper structural relationship with
other salary rates will exaggerate. inequities and increase unnecessarily
the cost of rationalizing the structure. I propose to point out later
how this can be obviated.
Implications
When we speak of excessive rates we are not quibbling over insignif-
icant amounts. About 1,500,000 employees are paid under Federal statu-
tory pay systems. Any mistake in an individual pay rate for that number
is multiplied astronomically. In a small organization it may not make
much difference whether the boss pays the actual present $3,780 or, for
example, a 10% higher rate of $1,158 a year to the one stenographer in
the outer office. In the Federal Government that stenographer is in
grade GS-3, and she is one of 173,521 employees in that grade. The $378
a year difference becomes, in a general Federal pay raise, an annual
difference of $65.6 million, paid year after year.
The 1958 pay raise set some rates which it now appears were in
excess of private enterprise rates. Now on the basis of available BLS
data, it appears that over-payments in some grades continue under the
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Classification Act, with strong.probability that similar excesses occur
in the other statutory pay systems. If true, this is wasteful government
that cannot be defended, and the Committee, I hope, will want to wait for
the facts to become available, in order to avoid increasing this excess.
If we raise Federal white collar pay levels now on the basis of
inadequate information which can. make the results merely guesses, and if
the September BLS report shows that such increases result in unnecessary
or improper expenditures, then we will all have much to regret.
Arguments Advanced for Increases Now
The cost of living is one of several factors which have often been
discussed. But in recent years private pay has often risen faster than.
has the Consumer Price Index, and so have many Federal white collar salary
rates. Since 1945 the Consumer Price Index has increased about 63% but
the entrance rates for GS-2 and GS-5 have increased by about 107% and 74%
respectively. If these rates had.been linked to that Index the purchas-
ing power of the. salary dollar would have been fully maintained with only
a 63% increase, or with a salary. of about $2,563 for GS-2 instead of the
actual present salary of $3,255. Moreover, the Consumer Price Index has
risen only 1.6% since the 1958 pay increase was approved, and this would
not justify any pay increase now.
Increased productivity is another factor in private pay fixing. It
is often included on the basis of assumptions as to average increases in
product-per-man-hour in the economy as a whole. Again, this is not the
sole factor in fixing pay in private enterprise. Moreover, it cannot be
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assumed that all gains in productivity do go or should go to increase
wages. It is clear that some portions of productivity gains may also
go to increase returns on capital and to decrease prices, or to hold
down prices which would otherwise have increased. Bureau of Labor
Statistics indexes of real. compensation and real product-per-man-hour
in the private econo show that in some periods productivity has
increased faster than real compensation, and in other periods real
compensation has increased faster. To apply productivity indexes
directly as a factor in determining Federal salary levels therefore
would have no meaning as a practical measure.
Assumptions about desirable living standards and family budgets
have been advanced in the past as deserving a place in Federal pay fix-
ing. Yet there is not only the very obvious difficulty in reaching.
agreement among reasonable people on what constitutes a desirable
living standard, but there is a much more fundamental difficulty. For
any attempt to use the living standard concept as the basic pay-fixing
measure has the result of measuring pay in terms of someone's decisions
about human needs and aspirations rather than in terms of the value of
the services rendered. Measured in these terms, for example, the head
of a family might be paid more than an unmarried employee, regardless
of the kind of work performed. In the American economy salaries and
wages are determined by decisions about what the employeefs services are
worth in value to the economy, not by decisions as to what economic needs
he would like to be able to satisfy.
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Industrial wage trends have frequently been offered as a reason for
salary increases for Government employees. These cannot be used directly
-to measure the adequacy of Federal salary rates, because such data
measure changes from one period of time to another, and do not establish
a proper level of wages at a given time. A report on wage trends may
show, for example, that carpenters' pay has increased by 10% since a
specified base period while plumbers' pay has increased only by 5% since
the same base period. However, a mere comparison of these two percentage
changes discloses nothing as to the proper relative position now of the
actual dollar rates for the two jobs. Such a time comparison alone does
not show, for example, whether the plumbers may actually have started
from a higher base and may still be ahead of the carpenters. It may be
a_fact that average manufacturing hourly earnings, for example, have
increased by about 55% since 1950, while the entrancerate or in-hiring
rate for GS-4 has increased by about 31%. But it is also a fact that
since early 191 the entrance rate in GS-3 increased by 116%, while
average weekly earnings in manufacturing increased only 106%, which only
illustrates that this kind of "rate of change" data can be selected to
-seem to prove a point. While wage trend data are useful for some purposes,
they are useless for measuring comparability of Federal salary rates with
private enterprise pay rates.
Industrial wage -averages cannot be used to measure Federal salary
rates, since these industry--wide averages, such as for manufacturing or
transportation as a whole, or for some individual industry such as
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machinery or textiles, are based on a mixture of levels of responsibility,
from unskilled trainees to highly skilled foremen. Such an average of
many levels does not state the specific rate for a particular level which
is required for comparison with a specific grade level in the Federal
service.
It is for these reasons, for example, that average wage increases
reported for recent private wage settlements, such as the recent steel
settlement, are not suitable for determining Federal white collar salary
rates. Even if the steel settlement were some sort of guide, we should
note that it provides no base wage increase at all until next December
and then only an average seven-cent increase which, even adding the
indirect costs, will bring about only an average 3% increase.
All the factors which I have mentioned, and many more, are pertinent
and do directly influence private industry salary decisions. Yet none of
them can feasibly be applied directly, either selectively or in combina-
tion, as the measure of adequate Federal salary rates.
Nevertheless, it is the Administration position that all these
relevant private salary-fixing factors should be reflected in Federal
salary rates, to the extent that they affect private industry rates for
similar positions and responsibility. Consequently, we have adopted the
principle that Federal white collar salary rates should be reasonably
comparable with private enterprise salary rates for similar work. By
following this principle each factor is automatically given the weight
in Federal pay setting which it has, on the average, in private pay
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setting in the national economy. We have concluded that fixing Federal
salary rates on the principle of reasonable comparability with private
enterprise rates for similar positions is long overdue.
Administration Position: -Summary and Background
It is the Administration position that the adequacy of Federal salary
rates at any particular time should be measured by applying two basic
principles. The first principle is the one just mentioned, that Federal
career compensation should be reasonably comparable with compensation in
private enterprise for work of a similar level of difficulty and responsi-
bility. The second principle is that within the Federal Government there
should be equal pay for substantially equal work within and among all pay
systems, with pay relationships among grades reasonably reflecting work
levels. There appears to be rather, general agreement on these basic
principles. The problems before us have to do with the way they are
defined and applied.
The white collar salary proposals which I will outline result from
-a series of studies, some of which are familiar to you. In 1957 a report
of the Defense Advisory Committee on Professional and Technical Compensa-
tion (Cordiner Report) pointed out what were regarded as serious defi-
ciencies in Federal pay rates and pay practices for professional and
technical employees. Shortly thereafter the President's Committee on
Scientists and Engineers (Young Committee) reported what amounted to
general agreement with the Cordiner findings. Both the Cordiner and
Young reports were confined to special groups of Federal employees,
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Cordiner to employees in the Department of Defense at GS-7 and higher,
Young to scientists and engineers throughout the Government.
Following completion of these reports the Administration decided to
ascertain whether any of the findings of these special reports applied
generally to other Federal employees, particularly the.one million non-
professional, non-managerial employees in the Classification Act and in
the. Postal Field Service. An Interdepartmental. Committee on Civiliafl
Compensation. was accordingly formed by the President in early 1957 and
its steering committee, under the chairmanship of Mr. James T. O'Connell,
Under Secretary of Labor, was directed to make a comprehensive study of
all executive branch civilian compensation. The findings and recommenda-
tions of this study were summarized in a report dated November 1957.
This staff report included a number of recommendations for far-reaching
reforms in Federal pay. Until recently none of its recommendations had
been either accepted or rejected by the Administration because it was
believed preferable to take up the question of reform of the statutory
white collar pay systems through joint review by the Congress and the
executive branch.
With that purpose the President, on July 15, 1958, recommended the
establishment of a joint pay commission to make such a joint review and
to recommend action, and referred to the O'Connell Report, stating that
copies. would be made available to the Congress. A supply of copies of the
report was subsequently delivered for use of this Committee. Since the
O'Connell Report was not widely disseminated and because of its significance,
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I suggest that it be made a part of the record of these hearings so it can
be examined in connection with our presentation.
In the absence of a.joint commission, the executive branch has contin-
ued to seek improvements, concentrating on the Classification Act, the
basic white collar pay system of general coverage. Thereafter, equitable
relationships among the Classification Act, the Postal Field Service Act,
the Executive-Pay Act, and the smaller pay systems can be established.
This work has resulted in the position which we are outlining today.
First Principle. "Reasonable Comparability"
Beginning in 1954, the President and other Administration spokesmen
have repeatedly advocated the principle that Federal career salary rates
should be generally comparable with private enterprise pay levels. A
common conclusion of all the pay studies I have mentioned is that Federal
pay should be reasonably comparable with pay in private enterprise for
similar work. We urge your Committee to accept this principle.:
By following this principle, the employee and the taxpayer are
assured that the Government is paying no more,-and no less, than the
"going rate" for employee services, just as the Government is expected
to pay current market prices for any other services or goods for which
it contracts. Moreover, the principle-presents a measurable method for
setting Federal pay.
Federal blue collar wage rates have for generations been fixed in
accordance with local prevailing rates following the "reasonable compar-
ability" principles In using this principle for fixing Federal white-
collar salaries, comparison should be made with national rates-rather
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than with local rates.
National rates have, always been provided under the Classification Act,
and they are, for several reasons, more appropriate for white collar
workers. In the case of professional and managerial workers especially,
the labor market is national in scope, and pay rates must have national
application. Also, local wage-setting operations for Federal clerical
employees would,. as a practical matter, involve so many geographic loca-
tions and be so complex as to be quite infeasible. Although Federal blue
collar workers are concentrated in a relatively limited number of estab-
lishments, there are, even so, more than 200 areas in which blue collar
wage surveys must be made and for which wage board actions must be taken.
Federal white collar workers are much more widely dispersed. Postal Field
Service workers and other Federal white collar workers are located almost
literally in every city and town in the country. The number of geographic
areas that would require local surveys and operations cannot be estimated,
and these areas would be adjacent to each other in an endless series,
making area definition virtually impossible. Nor does it help to compromise
between local and national approaches in favor of some sort of regional
approach, for almost any region thus defined .would _have both high pay and
low pay areas within it. Thus, from the standpoints both of principle
and practicality, it is necessary to adjust white. collar pay rates in
accordance with national pay levels.
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The Expanded Community Wage Survey
The difficulty in following the principle of reasonable comparability
is that the Government has no valid nationally representative data with
which to measure Federalsalary rates. This may be surprising to those
who know the large volume of data on wages and salaries nowreported by
the Government and by professional and trade associations.- There are,
for example, data on wage trends, but wage trends are a measure of change
rather than a definition of level. There are data on industrial averages,
but -these, -too, provide no basis for-fixing comparable rates. Thereare
data from surveys by professional and trade groups, but none of this is
nationally representative and most of it is -defined -in terms-which-cannot
be related.to -thegrades in Federal pay systems.
The kindof pay data needed for comparability pay purposes is the
kind which the Bureau of Labor Statistics has for yearsbeen collecting
in its Community Wage Surveys. However, prior to this-year, the Commu-
nity Wage Surveys.were made in only a relatively few metropolitanareas
and the white collar -occupations and levels included were largely cleri-
cal in nature. The Community Wage Surveys had not, in other words, been
nationally representative nor had they covered a sufficient sample of
Federal white collar work.
That situation is now being changed.
Needs for expansion of the Community Wage Surveys foreconomic anal-
ysis and for private industry and Union purposes had been accumulating
over the years. The Bureau of Labor Statistics had prepared a design for
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expansion which would produce data on white collar occupations, including
professional and managerial occupations at all levels, and which would
have a coverage representative of metropolitan United States, that is,
cities of 50,000 population and over. Early in 1958, a team of executive
branch pay specialists,worked with the Bureau of Labor Statistics staff
to review this survey design to assure that it would serve, in addition
to its primary economic analysis purposes, to measure private enterprise
rates for an adequate cross section of Federal white collar work. Last
year the President requested and the Congress appropriated $500,000 for
the expansion of the surveys to serve. all these purposes.
The complete details of the survey design are set forth in a docu-
ment titled "Design for a Survey of White Collar Pay in Private Industry."
This document summarizes the report and the design recommended by a work
group composed of statisticians and pay specialists from the Bureau of
Labor Statistics, the Bureau of the Budget, the Civil Service Commission,
the Office of the Special Assistant to the President for Personnel Manage-
.ment, and a consultant from the Department of Defense. The report and
recommendations have been accepted by the Administration, and now form
the fact-finding basis for the Administration's projected proposals for
pay action. The report states the policy assumptions on which the design
is based; it outlines in complete detail the occupational, industry, and
metropolitan area sampling, recording the rationale for the samples; and
it defines the.scope of the pay data to be collected.
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A copy-of this survey design was delivered to the staff of this
Committee upon its completion about a year ago. Copies have also been
given to the various departments and agencies, and to employee organiza-
tions. Because it is basic to our proposals, I suggest that .a copy of
this report be-included in the record.
.Here are some aspects of this survey:
The survey will report the rates paid in industry and business for
77 white collar jobs. These jobs h.sve been carefully sele-cted to be
representative of Federal white collar work from GS-1 and equivalent to
GS-15 and equivalent. To be selected, the jobs had to be common and of
frequent occurrence both in the Government and in private enterprise,
and the work had to be essentially the same in both spheres. Accordingly,
in addition to its regular job list included in the published Community
Survey reports, which covers such jobs as file clerk, typist, and key-
punch operator, the Bureau of Labor Statistics under the expanded survey
is pricing such jobs as engineers, chemists, accountants, personnel offi-
cers, lawyers (on the legal staff of a company, not those in practice for
themselves), and the like. We are, in other words, pricing only those
Federal jobs which can be directly compared with jobs in private enter-
prise, and we are pricing enough of them-at each grade to permit fixing
the proper Federal salary rate for each grade. We are not pricing
investigators, claims examiners, social scientists, and other common
Federal jobs which have no sufficient parallel in private enterprise.
The Federal rates for the jobs which have not been selected for direct
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pricing will be fixed in the normal way by job classification at the
proper grade.
These 77 jobs are being priced in 60 metropolitan areas this year,
and next year and thereafter in 80 metropolitan areas, carefully selected
by size, location, and industrial composition to be representative of
metropolitan United States. More than 70% of Federal civilian employees
are employed in metropolitan areas, and more than 75% of private enter-
prise white collar workers are in metropolitan areas.
The Community Survey is conducted on a year-round schedule, with
reports for several communities completed and published each month. This
summer the Bureau of Labor Statistics will complete its first annual sur-
vey under this expanded design, and in September they will publish a
preliminary report showing national averages and medians and other per-
tinent private enterprise salary data. We will all then, for the first
time, have the private industry facts to use to determine how Federal
pay compares, grade by grade. The final report will be published in
December 1960.
Second Principles Adequate Internal Structure
The second principle which we advocate, namely, equal pay for equal
work., with pay relationships among grades reasonably reflecting work
levels, is as important as the first principle of reasonable comparability
with pay in private enterprise. It is the principle on which internal
equity depends, and which requires that salary structures provide adequate
recognition of more difficult duties and higher responsibilities, and
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adequate incentive to assume them. It is the basis for position classi-
fication and job-evaluation as practiced in the various Federal pay sys-
tems. However, Federal salary structures, particularly that under the
Classification Act, no longer provide reasonable pay relationships among
grades. The differentials between grades and the. step increases within
grade are not, in a number of instances, adequate recognition and do not
constitute sufficient material incentive for higher responsibility and
greater proficiency.
The executive branch recommendation for any needed white collar pay
adjustment, based on the September Bureau of Labor Statistics report,
will also incorporate proposals for reform of the pay structure itself
and for more practical rules for the use of rates in that structure. The
exact dimensions of structural reform are dependent in part on the pay
levels found to be needed for comparability with private enterprise.
Therefore, I cannot specify precise figures at this time; but I would
like to mention the failings which need to be corrected and to outline
the method of correction which we propose.
These remarks will be addressed specifically to the structure of
the Classification Act, which is currently the most defective of all
Federal pay structures; but the observations apply also, in varying
degree, to the other Federal white collar pay systems.
A pay structure should be an ascending series of pay-rates designed
as equitable compensation for different levels of work and for different
degrees of proficiency and seniority in the work. Just as the work itself
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is classified in regularized gradations of difficulty and responsibility,
so the pay rates should have regularized interrelationships. The dif-
ferences between pay rates for different work levels should serve both
as proper recognition and as material incentives, and the differences
must accordingly be sufficient to be effective as motivation.
The Classification Act salary structure does not fulfill these func-
tions because it has become too irregular. The differentials between
some grades, and the within-grade step increases in most grades, are too
small to provide material incentive. The top ceiling rate is so low
that it has brought undesirable depression in the rates for several
lower grades. A few examples of the irregularities will illustrate.
When a young professional employee is promoted from the entry rate
of GS-5 to the entry rate of GS-7 it adds 23% to his salary, but when an
employee moves from the entry rate of GS-16 to the entry rate of GS-17
the difference in salary is only 8%. Even among the clerical grades
where much lesser work level differences are recognized, the differen-
tials range from 11%, which may be too much, to 7%, which may not be
enough.
While differentials between the lower professional and managerial
grades of GS-5, 7, 9, 11, 12, and 13 average nearly 20%, the differen-
tials from GS-13 upward average only 12%, thus.the small difference in
the pay check which accompanies a promotion to the next higher grade is
quite incongrous, as, for instance, in promotion from the maximum step
of GS-13 to a GS-14 job, where the pay check is increased from $338.03
to $315.29, or only $7.26. Finally, the low GS-18 ceiling permits
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neither the size of differentials needed nor the level of rates needed
to match the responsibility at the upper grades. Increases in differen-
tials are needed most among the lower grades, from GS-2 through GS-5,
and among the higher grades, from GS-13 through GS-18.
In brief, differentials between grades from GS-1 through GS-l0
should follow a common pattern. There should also be a coherent pattern
for differentials between the professional and managerial grades of GS-5,
7, 9, 11, 12, and so on through GS--18. The exact shape of these patterns
can be determined after the Bureau of Labor Statistics has reported the
results of its survey of white collar pay in private enterprise.
Similarly, within-grade step provisions vary widely. Some grades
have 10 step rates, some nine, some five, and one grade has eight rates
while another has one rate. Some steps amount to 3.7% of the entry rate,
and some are as small as 1.5%. The length of service required for a step
increase also varies among the grades. Many of the step increases are
too small to be felt as incentives. The increase in the pay check of a
GS-17 official when he gets a step increase is $6.65.
It is plain that there should be a regularization of within-grade
ranges and step increases, providing an adequate total range. There
should also be a regularizationof the numberof steps, the size of steps,
and the time and other conditions for advancement to higher steps. This
will undoubtedly result in larger step increases for some grades, for
example for GS-3 and 1, and for GS-8 and the higher grades.
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Not only is the Classification Act structure itself defective, but
the use of this rate structure by departments and agencies is governed
by statutory rules which are too rigid to permit sensible management
action, and this rigidity causes considerable damage. The rules provide
that, with rare exceptions, new appointments must be made only at the
entry step of the grade. Qualified, experienced candidates, already
earning more, are discouraged. Progression from one step rate to the
next higher step rate of the grade is governed by the statutory rule
which provides for :such progression only upon completion of the statutory
time in grade. Increases for extra competence are not allowed, nor may
a supervisor's in-grade rate be increased above the rate paid his subor-
dinate under another pay system. When an employee is promoted to a
higher grade, the rules require that the promotion be either to the
entry step of the new grade or to the lowest step which will provide a
single step salary increase. One-step increases are not adequate
recognition for assuming heavier responsibility.
Conclusion
In this statement I have outlined the Administration position in
opposition to any general pay increase legislation, and in favor of im-
portant improvements in Federal white collar pay fixing. The improvements
which the Administration supports are (1) improvement in measuring the
adequacy of Federal salary rates by adopting the principle of reasonable
comparability with private enterprise salary rates for similar work,
(2) improvements in the white collar salary rate structure, and (3) im-
provements in the use of that structure.
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The first annual BLS report on private enterprise national white
collar salary averages will be published in September. The executive
branch agencies will immediately begin work to construct a Classification
Act pay schedule which will include salary rates reasonably comparable
with the private enterprise rates reported by BLS, and which will incor-
porate the recommended internal structural revision such as proper inter-
grade differentials and in-grade ranges. Pay schedules will also be
determined for the Postal Field Service, the Foreign Service, and the
other white collar statutory pay systems and these schedules will also
contain rates which are reasonably comparable with the private enterprise
rates reported by BLS. All of these schedules will be formulated as
proposed legislation and will be formally submitted to the Congress in
January. We will endeavor to formulate some needed structural revisions
in the other statutory pay systems for submittal at the same time.
There will be no private enterprise white collar salary rate data
fully adequate for measuring Federal white collar salary levels on a
national average basis at all grade levels until-September. Until then
no one can state finally what salary rates for Feder-al white collar
positions would be reasonably comparable with private enterprise rates.
It is our position that no general pay increase legislation. should
be seriously considered until the factual justification can be examined.
Action to increase Federal salary expenditures without factual justifica-
.tion would not be responsible government.
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