Civil Servants and the Cost of Living
Proposed Salary Increases for Federal Workers
Early in its present session, Congress is expected to adopt a bill which will give pay increases ranging up to $300 a year to some 200,000 federal employees in the lowest salary grades and will establish a minimum annual rate of $1200 for full-time employment in the federal establishment. The bill carries the endorsement of President Roosevelt: it may be the forerunner of a series of similar bills to grant salary increases to other groups of government employees, or it may be followed by a general measure to increase salaries of all federal workers. Chairman Rams-peck (D., Ga.) of the House Civil Service Committee, who sponsored the pending bill, said it was “not designed in any way to meet the general problem of what ought to be done about salaries in view of increased living costs”: legislation to deal with that problem would be considered after Congress had determined the national policy on price control.
Cost-of-Living Bonuses in World War I
Last September, when the price-control bill was pending before the House Banking and Currency Committee, Secretary of the Treasury Morgenthau told committee members that the federal government had become the country's largest purchaser of goods, also its largest employer. “A substantial rise in the cost of living,” he said, “will raise for us as an employer a choice of evils; to permit the real incomes of our employees to be unjustly reduced or to increase still further the payroll we must meet.”
During the World War of 1914–18, no effective measures for direct control of prices were taken by the federal government. By the end of 1917, the cost of living was reported to have increased 64 per cent over the level of 1914. By June, 1920, the cost-of-living index of the Bureau of Labor Statistics had risen to 207.7 (1914 = 100), falling again to 171.9 by December 1921. President Roosevelt said in a special message of July 30, 1941, asking immediate enactment of a price-control bill, that the price trends then in evidence were “frighteningly similar” to those experienced during 1915–1920. At a press conference, January 13, he said the farm bloc amendments added to the House price-control bill by the Senate had made it a measure to promote inflation rather than to control inflation. Price Administrator Henderson said the amended bill was “national suicide through inflation.”