Fitt, Hon. Alfred B., Assistant Secretary of Defense, Manpower and Reserve Affairs, accompanied by Carl W. Clewlow, Deputy Assist- ant Secretary of Defense, Manpower and Civilian Personnel Policy; Raymond Braitsch, Chief, Technical Staff, Army-Air Force Wage Board; Fred Becker, Head, Compensation Branch, Division of Personnel Management, Department of Navy; William C. Valdes, Staff Director, Office of Civilian Personnel Policy, Office of Secre- tary of Defense; and William B. Marks, Director, Position Manage- ment and Employees Compensation, Office of Civilian Personnel Policy, Office of Secretary of Defense. Griner, John F., national president, American Federation of Govern- ment Employees; accompanied by Philip C. Perez, president, Lodge 1617, San Antonio, Tex.; W. J. Voss, research director, AFGE; Thomas G. Walters, legislative representative, AFGE; and Fred Heuser, president, Lodge 987, Robins Air Force Base, Ga---- Heuser, Fred, president, Lodge 987, Robins Air Force Base, Ga... Perez, Philip C., president, Lodge 1617, San Antonio, Tex... News release from the Civil Service Commission, dated December 1, Federal Personnel Manual No. 532-2, of the Civil Service Commis- sion, dated December 1, 1967, subject: Coordinated Federal Wage Communications received from- Gisvold, P. A., Captain, U.S. Navy, to Bun B. Bray, Jr., subcommittee (III) COORDINATED FEDERAL WAGE SYSTEM TUESDAY, FEBRUARY 6, 1968 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON MANPOWER AND CIVIL SERVICE OF THE Washington, D.C. The subcommittee met at 10:20 a.m. in room 2253, Rayburn House Office Building, Hon. David N. Henderson (chairman of the subcommittee) presiding. Mr. HENDERSON. The subcommittee will come to order. Today this subcommittee is initiating public hearings to review not only what is proposed, but what has transpired in connection with establishing the pay of the approximately 800,000 wage board employees. These are employees in recognized trades or crafts, other skilled mechanical crafts, and in unskilled or semiskilled manual labor occupations. Their wages, unlike the employees of the professional, administrative, and clerical classes, are not established by periodic congressional acts, but, rather, are established by annual surveys of the rates of pay of non-Federal Government employers in the area adjacent to Federal Government worksites. Almost 3 years ago, the House Committee on Post Office and Civil Service issued a report, House Report No. 187, that pointed out a number of inequities in the systems in use for establishing the pay rates of the blue-collar employees. Principal among the items noted in that report was the lack of uniformity of pay rates among Federal Government departments and agencies, for the same type of work in the same city or area. On November 16, 1965, President Johnson issued a directive for the heads of departments and agencies, under the leadership of the Chairman of the Civil Service Commission, to develop common job standards and wage practices and to provide for uniformity in wage-setting practices. This was followed by a joint Bureau of the Budget-Civil Service Commission report that substantiated the earlier findings of the subcommittee. The Civil Service Commission then proceeded with a study designed to establish a uniform and coordinated wage board pay system. We have been in constant touch with the Commission officials in the development of such a system, and realize fully the problems involved in, and the depth of, such studies. However, on October 16, 1967, because of the time that had passed without action, the Senate passed S. 2303, an act to provide a uniform system for fixing and adjusting the pay of the employees in recognized trades or crafts, and for other purposes. Shortly thereafter, on December 1, 1967, the Civil Service Commission announced its coordinated Federal wage system. In view of the foregoing, it now appears appropriate to review what has transpired and what is proposed with respect to this important manpower management item. Chairman Macy and Commissioners Andolsek and Hampton, it is indeed a pleasure to have you with us today. I can't remember when all three of you appeared together before this subcommittee. In any event, I want to thank you, because I am certain that it must have taken a lot of reshuffling of your busy schedules for all of you to be present here this morning. I might say for the benefit of the many persons here that our immediate objective is to get a thorough understanding from your presentation this morning, what your system is, and what your objectives are. After the members and the staff have been able to get a thorough understanding, we certainly will then begin to proceed in these hearings. We may want you to come back, Mr. Chairman, or others from your staff, to fully inform us or answer questions that might arise as we conduct our study. We want to afford all other organizations or anyone who has reason to present testimony to us an opportunity to do so. TESTIMONY OF HON. JOHN W. MACY, JR., CHAIRMAN, CIVIL SERVICE COMMISSION, ACCOMPANIED BY HON. L. J. ANDOLSEK AND HON. ROBERT E. HAMPTON, COMMISSIONERS, CIVIL SERVICE COMMISSION Mr. MACY. Mr. Chairman, my colleagues and I appreciate very much this opportunity to meet with you and to talk about this very important area of Federal personnel management. I want to say that we join with others in commending you and the subcommittee for your continuing interest in the entire problem of wage board rates and structure and operations. Your reports, based upon research and study, have provided a very useful form of assistance to the Commission in its recent work. I would like this morning to provide an exposition on the coordinated Federal wage system as it has been developed and as it was announced on December 1. This system was developed at the direction of President Johnson, as you indicated in your opening remarks. It was developed jointly by the Commission with the Departments and agencies, and in close and continuing consultation with top representatives of the key labor organizations. The framework of basic policies was approved by the President before the final announcement and the initiation of the system on December 1, 1967. I believe it would be helpful to review briefly the history of wagesetting for these particular jobs, because the historical framework gives some indication of what we are dealing with in the new system. The first statute with respect to ratesetting for wage board employees was passed by the Congress over a hundred years ago in 1862. Under the statute of that year, the Secretary of the Navy was authorized to set Navy wages based on prevailing rates of private industry in the immediate vicinity of naval establishments. That initial authority has become the cornerstone of the whole structure of the wage board system through the years. The prevailing rate principle was later extended to other bluecollar workers in all of the agencies with the exception of the Post Office Department. I think it is important to recognize that jobs similar to blue-collar jobs in the Post Office Department are paid on the basis of the rates established by Congress for the postal field service, and are, therefore, under different pay arrangements. Different patterns were developed by different agencies in the course of the years in administering the wage board system. The War Department in 1942 developed a system of its own which was a first step toward coordination; because prior to that time each one of the bureaus of the Department had a different system, based upon the judgment of the bureau chief and the practice that had been followed. The Interior Department, shortly after World War II, developed a system for the Bureau of Reclamation and some of its activities in the West. In addition to the authority given to the Navy over a hundred years ago, there is now a general statutory authority for wage determination in title V of the United States Code. The citation is 5 U.S.C. 5341. There is a separate authority in the following section, 5342, for vessel employees; that is, those on floating plants for the Government. In addition, there are some special statutes that govern rates. For example, there is a separate authority for the Tennessee Valley Authority. But, by and large, the basic authority is section 5341. Throughout history, the authority for setting rates has been vested in the head of the agency without any provision for control or coordination or review above the agency level for the entire executive branch. That is the way the statute stands at the present time. A brief review of recent operations of the many systems used for wage board ratesetting will provide a helpful backdrop for the new plan. The current coverage, as you indicated in your preliminary remarks, is for approximately 800,000 wage employees. About 80 percent of that number are employed by the Department of Defense. However, the balance are employees of nearly 50 different executive departments and agencies. There are presently 330 identified geographical areas that are described as wage areas in the United States. There are also wage board employees overseas whose rates are also determined under prevailing rate principles by the employing agency. There has been a longtime concern about the variety and diversity and complexity of the wage board systems. Concern expressed by Congress, concern expressed in the executive branch. Initial efforts were made in the 1950's to bring about a greater degree of coordination. Plans were then initiated by the Civil Service Commission to bring about a coordination of the wage surveys. A certain amount of persuasion was issued from the White House, urging agencies to work more closely together in establishing their rates. But no unified plan was presented during that period. The awareness in the executive branch of the problem led the Bureau of the Budget and the Civil Service Commission to the most recent study, which was conducted in 1964 and 1965. The study involved not |