To summarize, the Classification Act presently provides a payfixing system which is altogether too rigid in its appraisal of positions. It ignores the personal contribution of the incumbent employee. The salary schedule lacks flexibility and is so compressed it does not provide incentive and reward for work well done.

The national salary survey is concerned too greatly with small establishments in private industry. The timing of the survey also results in a lag between its completion and the effective date for new salary rates which should and can be shortened. If it is confined to large-scale industry and the establishments are fewer in number, the survey would be completed within a shorter period and be more representative at the same time.

For that part of the lag which does not flow from the timing of the survey, only expediting legislative action can provide improvement. However, I would like to add this comment; that the American Federation of Government Employees at no time, now or in the future, favors salary fixing which removes this function from the watchful eyes of Congress.

Thank you, Mr. Chairman, for these hearings which indicate your interest in this important problem and for this opportunity to participate in them.

Mr. UDALL. Thank you, Mr. Sadler. I appreciate having the statement of AFGE for inclusion in the record.

As I listened to and read your statement I saw again the old dilemma that we face, a kind of chicken and the egg situation. For 12 pages you recite defects in the salary systems, inequities, problems of timelags, problems of computing comparability, the problem of whether we should have rank-in-man or rank-in-job.

Yet, as I see it, one of the main reasons that this committee and the Congress never has the time to get into these particular problems— to resolve them, to hold hearings and pass legislation—is that in each and every year we spend 90 percent of the time available to us fighting over the question of whether we will have a 3-percent pay raise or a 5-percent pay raise, whether the budget is in balance, or whether we should take this amount of money and give it to the postal employee, whether it should go to classified, and all the rest.

What I had really hoped to get out of these hearings was a series of suggestions. I was hopeful that we might reach a consensus and break this cycle of increasing numbers of inequities and increasing problems in the pay system, and find a less cumbersome method of adjusting the basic salary increase.

If we gave you a choice next year as to whether we should spend our time on a 5-percent pay raise for the classified employees which you recommend, or consider correcting some of these inequities in the system, I think you will have to say, "Give us the pay raise. Spend your time on that and we will worry about the inequities next year."

I am a little disappointed in your statement in that the only guidance you give us on the overall problem of how to go about adjusting pay in the future is that you don't want pay raises taken from the watchful eyes of the Congress.

I ask you this because apparently your board has not yet had time to discuss this, you have not arrived at a position, or you don't know. Mr. SADLER. I said, on page 3, that my comments should be under

stood at this point as being preliminary to our continued and more detailed study of this whole matter. Of course, we plan to go further. Mr. UDALL. I am not attempting to fix blame or to censure your organization because you do not come in here with a beautiful 5point plan suggesting how to do this in the future.

I do hope as we go down the road that you will give some consideration to this problem. Perhaps between now and next year, as an organization, you can arrive at a position.

We will have to decide next year whether to have another 1-year pay bill with all of the complexities and difficulties we had last yeardivision between postal and classified, the amount of the raise, the effective date, the Budget Bureau position, and so on. I can write the script of these hearings, and you can, too. I can anticipate everybody's testimony almost before they appear before the subcommittee. I had hoped we could break this cycle either by some semiautomatic method, a pattern of 2- or 3-year pay bills like the last one we had, or by some other kind of a system which has been suggested. I hope AFGE will give us some help on this as you get more time to con

sider it.

Mr. SADLER. We would like, Mr. Chairman, to be able to bring to your attention many other things which should be presented to you in a more detailed manner and sit down and discuss this with you and perhaps appear again at hearings on this.

Mr. UDALL. The gentleman from New York.

Mr. HANLEY. Thank you very much, Mr. Chairman.

Mr. Sadler, initially I ask that you give my congratulations to Mr. Griner on his reelection to your very fine association. I have always looked upon him as one of the outstanding leaders in the labor movement. I extend my heartfelt congratulations to him.

Mr. SADLER. He will appreciate that.

Mr. HANLEY. Previous testimony offered in these hearings has suggested the possibility of incorporating a third party into the deliberation-a third party commission-for the purpose of making an objective determination.

I think you have been present here and heard the testimony. What position would this association take regarding this possibility?

Mr. SADLER. Mr. Hanley, I have not had a chance to discuss this with Mr. Griner. As I say, he is still out of town.

I would say that, on the surface of it, we would not object to the appearance of a third party if it had the proper position in this whole picture. I think it may well be that someone on the outside could bring our thinking together. Certainly, as Mr. Udall pointed out a while ago, we could almost name the thinking of everybody who has been on this whole picture on the inside.

I think certainly we would not at this point object to the appearance of a third party if he played the proper role.

Mr. HANLEY. What is the attitude of your association with respect to the possibility of making pay scales in consideration of regional economies?

Mr. SADLER. We are running into some problems in that area right now and we have for many years. I think that our economy is adjusting itself nationwide to the point where you cannot confine to a geographical location exactly. I just do not believe we can continue to draw a

line around a given area and say that this is the area we will conclude our findings from.

I think you must have some flexibility in making determinations of the wages or prevailing rates or whatever they might have in a given

area.

Mr. HANLEY. Your statement on page 3 with respect to the different systems reminds me of one of the great inequities which I have been able to observe where in many instances it is not the background or the responsibility of the employee but the rate of pay is determined by the agency which employs him rather than his specific ability or responsibility.

I set forth as an example the practice of medicine where a doctor with a specific background of performing specific functions in the Federal Government has a salary determined by the agency as opposed to the background and responsibility. We have been able to detect five different pay scales for the same criteria associated with this endeavor. I have no further questions, Mr. Chairman.

Thank you, Mr. Sadler.

Mr. UDALL. Thank you. We appreciate your presence here today. The next witness will be Mr. Patrick J. Nilan, legislative director, United Federation of Postal Clerks.

STATEMENT OF PATRICK J. NILAN, LEGISLATIVE DIRECTOR, UNITED FEDERATION OF POSTAL CLERKS, ACCOMPANIED BY HENRY T. ANGLIM, ADMINISTRATIVE VICE PRESIDENT, AND WALTER 0. FROH, STAFF ECONOMIST

Mr. NILAN. I am accompanied this morning by Mr. Anglim from our organization and also our staff economist. I would like to have them at the witness table with me.

Mr. UDALL. We are delighted to have them.

Mr. NILAN. Thank you, Mr. Chairman.

Mr. Chairman and members of the committee, my name is Patrick J. Nilan, national legislative director of the United Federation of Postal Clerks. I am very pleased to appear before this committee with our administrative vice president, Henry T. Anglim; and Walter O. Froh, staff economist for our organization.

We appear here on behalf of the Nation's 306,000 postal clerks, for whom we are the exclusive collective bargaining representatives in labor-management relations with the Post Office Department. We have postal clerk members in practically every one of the 32,000 post offices in all 50 States, the District of Columbia, Puerto Rico, Virgin Islands, and Guam.

Mr. Chairman, we would like to express our appreciation to you and the other members of this committee for arranging these hearings to make a critical appraisal of the existing statutory salary-fixing policies of the Federal Government. We understand, also, the committee is concerned with developing permanent machinery for the implementation of possible alternatives which would later serve the needs of the public and the Federal employee.

The officers and members of the United Federation of Postal Clerks join with this committee in its desire to seek proper compensation for the skills, long service, and dedication of the postal clerk and other

Federal employees; such compensation to be established on equitable, current, and continuing basis in the best interests of the American public and the postal and Federal employees who serve it so well.

Certainly the membership of our union appreciated the efforts of this committee, the House and Senate Committees on Post Office and Civil Service, as well as the Congress and the President in making possible the enactment of Public Law 90-206, in December of last year. This is particularly true as developments in the legislative and executive branches of Government during the past 8 months may have made it difficult if not impossible for postal clerk salary adjustments in 1968 without the second-phase, 5-percent pay raise last July guaranteed by the Congress in Public Law 90-206.

However, Mr. Chairman and members of the committee, even though the time-consuming, often expensive, and certainly demanding representations necessary to secure often "too little and too late" wage adjustments we are not convinced at least at this time that there is a better or more satisfactory alternative.

I say this because our people have historically looked to the Congress rather than to the executive branch, regardless of the political party in power, for equity and justice in satisfactorily resolving our salary and other employee benefits. The Congress has usually responded within the possible areas of accomplishment to the maximum extent possible.

You may be certain, however, that our organization now as always is ready to respond immediately and responsibly to develop a better substitute, if one can be found, which would be compatible with the best interests of our postal clerk membership which we represent, as well as the American public we serve.

The intent of these hearings, as announced on February 8, 1968, by the distinguished chairman of this subcommittee, Congressman Morris K. Udall, is "to determine whether present procedures centering on frequent, if not annual pay battles, are the best way to adjust salaries, and to search for possible alternatives."

We recognize there have been problems and difficulties in using present procedures to develop Federal employee salary adjustments through legislation. Further, we always find interesting suggestions and ideas related to this area of great concern. However, we recognize, and we believe others should also with due respect and appreciationthe progress that has been made in adjusting postal and Federal employees salaries through the legislative process, and particularly the efforts of this committee and the Congress.

We know this committee, as well as the Congress, will consider any changes in the present legislative process concerning this most important area of Federal salary determination which affects over 700,000 postal employees and over 2 million Federal workers, that any such changes should be considered only with extreme caution, with deep and penetrating study concerning the present system and suggested alternatives.

Again, Mr. Chairman, we state that we are not opposed to better ways or newer ways of accomplishing the same objectives. We are concerned with progress and equality in the area of wage adjustments. In all honesty we must say, however, that we do not believe in

replacing the broadly based wisdom of a democratically elected and responsive Congress with the aloofness of administrative discretion in the determination of Federal salaries as of this time at least as being a better way.

It is also essential that we never forget that in spite of the high priority and importance attached to improvements of Federal employee fringe benefits the most basic and far-reaching issue of all is the take-home pay of our postal clerks. Equity and justice in salary determinations for our members and their families is, without question, the bread-and-butter issue which always affects all of our membership.

This is particularly true since approximately 650,000 of the reported 760,000 postal employees are massed and locked in the lowest five pay levels within the entire postal service.

Mr. Chairman and members of the committee, in recent years the United Federation of Postal Clerks has repeatedly testified before this subcommittee and other committees of the Congress concerned with salary legislation of postal and Federal employees. I am confident the record we have made before this committee and other committees of the Congress in the many and often voluminous statements presented to the Congress in support of equitable salary increases needs no repetition here this morning. However, in order for this committee and the staff to have ready access to the position statements by our organization on questions related to salary and postal clerk classification I would like to leave with the chairman copies of our two most recent statements presented to this subcommittee on May 17, 1967, and also our statement before the Position Classification Subcommittee on May 10, 1967.

I also would like to take this opportunity to particularly thank Mr. Hanley, who is chairman of the Subcommittee on Position Classification, for the in-depth study that his committee is making at this time concerning classification of postal and Federal employees. I might add we are happy to cooperate with that committee and Chairman Hanley in an effort to try to come to an equitable method or formula of resolving employee classification problems.

Mr. UDALL. He has done a great job. I take some pride in having helped to train him on this subcommittee before he moved on to his

own.

Mr. HANLEY. I am most appreciative of the observations of both gentlemen.

Mr. NILAN. These two statements will provide a ready reference, documenting the reasons why we have little or no confidence in the Civil Service Commission and the Bureau of the Budget, as far as any future administrative automatic adjustments of postal clerk salaries. These two statements speak for themselves and I am confident will be helpful to your in-depth study of this entire problem.

Mr. Chairman, I would like to make a number of observations or comments concerning our experiences to date which would make it extremely difficult for us to accept any administrative adjustments of salaries without a final determination being made by the Congress. For example, as I have mentioned, our membership has little if any confidence in the administrative decisions and recommendations presented to the Congress by either the Bureau of the Budget or the Civil