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Index (ECI) is the only available comprehensive measure of employment costs-wages plus employee benefits--and therefore provides current information on what is happening to this major element of costs.

Though the ECI is an excellent measure of national trends, the current sample size of the ECI (about 2,000 establishments) is too small to permit extracting very much disaggregate detail on industry, occupation and area. It cannot at present give, for example, sufficient information on the particular occupations or areas that might be experiencing the greatest increase in labor cost. One of the major functions of the Industry and Area Wage Surveys is to supple ment data for the ECI, for they are designed to give information on wages, at detailed levels, for industry, area, and occupation. An integrated program of wage information requires information of the kind presented by all three surveys. In addition, the Bureau's Industry and Area Wage Surveys have served Federal policymakers for many years and were initiated in direct response to major issues facing the government. Occupational pay data from the AWS are used by the Federal Government to make determinations of prevailing wage rates to be used in Federal contracts for services. The IWS hospital industry data is used by HHS to set medicare reasonable cost guidelines for some medical services. The Employment Standards Administration uses data from the AWS and SCA surveys to adjust disability pay for Federal workers. IWS data are routinely used as objective data in contract negotiations. GAO has recommended that the Federal Wage System also be based on the Bureau's area wage surveys.

The BCI is also being proposed for administrative uses. Recently, the President's Military Manpower Task Force recommended the use of the ECI for adjusting military pay: legislation is being drafted on this issue. GAO has recommended that the ECI be used in conjunction with the data from the Professional, Administrative, Technical and Clerical Pay Survey to set General Schedule employee salaries. The BCI has also been suggested as an alternative to the Consumer Price Index, as an escalator for entitlement programs (e.g., Social

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REDUCTIONS IN WAGE SURVEYS

Question: In November it was hinted that BLS would reduce the number of Area and Industry Wage Surveys.

Have you in fact done this, and what have been the consequences?

Answer: As part of the 12 percent reduction in 1982, BLS initiated its plan to reduce the industry wage and area wage surveys. Although the industry wage surveys were reduced by the full amount in FY 1982, in future years, both the AWS and IWS will be affected by this reduction of $1.1 million and 33 positions. In FY 1982 the number of industry surveys was reduced from 15 to 10. This reduction means that some industries have been dropped from the program; initiation of new industry wage surveys are being cancelled or delayed; and surveys conducted every 3 years are being shifted to a 5-year cycle whenever feasible.

CUTBACK IN EXECUTIVE DIRECTION STAFF

Question: In 1980, BLS had 277 staff for "Executive Direction and Staff Services." Even after all the recent budget cuts, you still have 254 administrative "overhea" staff. Can't you make a bigger reduction in Executive Direction staff?

Answer:

The

Executive Direction budget activity currently comprises 13 percent of the total BLS staff. of the total number of 254 positions, approximately 100 positions are involved in what could be referred to as "overhead" functions such as personnel, budget, accounting, administrative support (mail, procurement, telephone

and
equipment

services, building and work space management, etc.); and management information and support. Also included in this total is the Commissioner and her very small immediate office staff. The remaining Executive Direction positions in the offices of: (1) Field Operations, (2) Publications, (3) Statistical Operations, and (4) Research and Evaluation. These offices also carry out functions in direct support of the Bureau's major program

(Prices, Wages, Employment, etc.) on a Bureau-wide basis, thus their location for budget presentation purposes in the Executive Direction budget activity.

JUSTIFICATION FOR STATISTICAL STAFF

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The Bureau of Labor Statistics has 1,790 staff--about the same level the billion-dollar National Cancer Institute, and the multi-billion dollar Employment and Training Administration. That seems like a small army of statisticians.

Question: What do these people really do?

Answer: The Bureau of Labor Statistics does not administer large-scale Federal grants or contracts as in the case of the National Cancer Institute or the Employment and Training Administration. Although some major BLS programs are supported by data collection conducted under contract with State agencies and the Bureau of the Census, these arrangements are limited to the BLS-790 Industry Employment Survey, the Occupational Employment Survey, Employment and Wages, the Current Population Survey, the Consumer Expenditure Survey, and the Point of Purchase Survey. Thus, for the majority of BLS programs including such large scale data collection programs as the monthly Consumer Price Index and the Producer Price Index Programs--two of the largest and most sensitive statistical programs conducted by the Federal Government--BLS itself directs and conducts the actual survey activities. terms of major functions across

the Bureau's budget activities, BLS staf. are allocated as follows:

In

BLS FY 1982 Positions 'by Major Function

Percent of
Functions

Total Positions

(1) Program Management - Economic Review

35%

and Analysis (2) Statistical Design/Analysis (3) Data Collection (4) Data Processing (5) Administration and General Program Support

TOTAL

295 22%

10% 100%

Question: Why is it really necessary, for instance, to have 343 people working on Labor Force Statistics and 729 people on Prices and Cost of Living?

Answer: Staffing in a given BLS budget activity reflects the person years required to carry out the program or survey functions which are funded in that area. The programs and staffing for each of the major programs in the Labor Force and Prices and Living Conditions areas are as follows:

Staffing in these various offices has been reduced in recent years and now is barely consistent with workload and operational requirements. Further reductions would place in serious jeopardy the Bureau's ability to meet the legal and

administrative requirements to operate the agency as well as those imposed by such agencies as OMB, DOL, GAO, GSA, OPM as well as the Congress.

DATA COLLECTION STAFF

Question: Isn't most of the data collection actually done by other agencies and BLS staff primarily analyze and publish statistics?

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Answer: No, this is not correct. As noted earlier, BLS does contract with State Employment Security agencies for collection of the industry employment data and other series and with the Bureau of the Census for the Current Population, Consumer Expenditure, and the Point of Purchase surveys. While these

major survey efforts, BLS itself collects all the remaining data in the Employment, Wage and Price areas. As noted earlier, this includes survey work on the Consumer and Producer Price Index programs, which are two of the largest and most important surveys conducted by the Federal Government.

In addition, it should also be noted that although data collection is a labor intensive activity, it is not the only activity: survey design, data processing, tabulation, data review and analysis and publication are all additional activities that must be carried out by BLS staff, even in those programs for which BLS contracts with other agencies for the data collection.

Question: Why isn't there any explanation in your budget justification material of why it takes a specified staffing level to produce certain statistics?

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to

Answer:
We

extremely anxious provide supporting materials at whatever level of detail is necessary to support and explain staffing levels for BLS programs. Since staffing levels for BLS programs have already been developed and carefully scrutinized at all budget review levels of the executive branch, such justifications could be presented. They have not been included in the budget because BLS staffing levels are based on wi dely varying individual survey and program requirements: Aggregations of these data to budget activity levels would not be useful as justification materials to justify staffing for each detailed BLS program. For example, the Consumer Price Index program is actually comprised of a series of different surveys to collect such varied information as rents, property taxes, food prices and prices of other commodities and services. Each of these surveys has

specific sample sizes which generate separate workload

estimates for data collectors, processing clerks, programmers and systems analysts, economists, and statisticians. These estimates for the CPI program would be completely different than the estimates required to produce area or industry wage surveys, even though the same basic functions (sample design, data collection, data processing, data review and analysis, publications) are involved. In view of the potential volume of material involved, inclusion of such materials in the Congressional Budget submission would be an overwhelming mass of detail far in excess of the detail normally supplied by agencies in the formal budget documents. BLS staff, however, would be very pleased to present the additional supporting documents to the Committee at any time.

SUBCOMMITTEE RECESS

Senator SCHMITT. We will recess until 1 p.m., Thursday, April 29, when we will continue our hearings with the Secretary of Education.

Thank you very much.
Ms. NORWOOD. Thank you very much, Mr. Chairman.

[Whereupon, at 4 p.m., Thursday, April 22, the subcommittee was recessed, to reconvene at 1 p.m., Thursday, April 29.)

DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, AND EDUCATION AND RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 1983

TUESDAY, APRIL 20, 1982

U.S. SENATE,
SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS,

Washington, D.C. The subcommittee met at 2:30 p.m. in room 1114, Everett McKinley Dirksen Senate Office Building, Hon. Harrison H. Schmitt (chairman) presiding

Present: Senators Schmitt, Byrd, and Burdick.
Also present Senator Levin.

DEPARTMENT OF LABOR

STATEMENT OF HON. RAYMOND J. DONOVAN, SECRETARY OF LABOR
ACCOMPANIED BY:
ALFRED M. ZUCK, ASSISTANT SECRETARY OF LABOR FOR

ADMINISTRATION AND MANAGEMENT
JANET L. NORWOOD, COMMISSIONER, BUREAU OF LABOR STATISTICS

SUBCOMMITTEE PROCEDURE

Senator SCHMITT. The hearing will come to order. Good morning, ladies and gentlemen.

Today we begin a week of hearings on fiscal 1983 budget requests for programs administered by the Department of Labor, with an overview presentation in this initial session from Secretary Donovan. We have already had the hearings for examining fiscal 1982 supplemental budget requests, including proposed deferrals, transfers, and bill language changes, but we may have further questions to update issues relating to the pending urgent supplemental appropriations bill.

Also appearing today will be Senator Levin a little bit later on to discuss the GAO report he commissioned on the work incentive program. Senator Levin agreed to release this report early in order that we may use these hearings to review the findings.

Mr. Secretary, we will interrupt you when Senator Levin arrives. If you will introduce your colleagues at this time and proceed with your opening statement or summary as you see fit.

Secretary DONOVAN. Thank you, Mr. Chairman. On my left is Mr. Al Zuck, Assistant Secretary for Administration and Management, and

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