and highly efficient network of 1,800 public employment offices. Placement services for workers have been realined to meet the needs of all workers and employers. Toward this end, special purpose placement offices are being established in metropolitan areas to service such segments of the labor force as professional, mangerial, and technical workers; sales, service, and trade occupations.

The Bureau of Employment Security and the affiliated State agencies have embarked upon a program of vastly increased testing, counseling, and placement activities for young people who are out of school and out of work. To coordinate and intensify this expanded program for youth, the Bureau of Employment Security has created a new National Youth Employment Service, and regional youth service representatives are being designated to work with the States.

E. Area Redevelopment Act: The Area Redevelopment Act passed by the Congress in 1961 has a provision under which training programs are instituted in depressed areas in order to provide opportunities for workers to acquire the skills necessary to fill jobs. The Department of Labor has been actively involved in developing these training programs. So far programs underway that have been approved by the Department are providing training opportunities for over 3,000 workers in both industrial and rural areas. The experience of the Department so far with this program reinforces the conviction that while training and retraining does not answer all the problems of the unemployed it is an important aspect of economic recovery that demands added attention on the part of the American people.

F. Labor-Management Reporting and Disclosure Act: The Bureau of LaborManagement Reports has completed the most active period in its 2-year existence with vastly increased activity in the twin areas of compliance and enforcement of the LMRDA. Over 98 percent of all violations of the act uncovered by Bureau investigative activities during fiscal year 1961 were corrected voluntarily, without recourse to litigation. During the same period, 33 court actions were initiated against persons and organizations violating the terms of the law. The Bureau also has pursued a constantly increasing program of technical assistance and education directed at achieving the maximum in voluntary compliance.

PROGRAM FOR 1963

Financial analysis. In terms of total dollars requested to be appropriated fr om general funds for 1963, the estimate calls for $371 million less than was appropriated for 1962. This is because of nonrecurring items as indicated on the table furnished to the committee.

While there is a net reduction in all funds of about $348 million there are net program increases of about $30 million of which $7 million would require general fund appropriations and the balance would be derived from trust fund sources. In terms of staff increases we are proposing an increase of about 670 positions divided among 12 of our programs but primarily in the Department's manpower and skill development programs.

On a comparable basis, disregarding the nonrecurring items, the dollar increase over 1962 is about 5 percent. Summary financial tables are attached which give the details of these figures.

Now I would like to move on to the program aspect of these increases and of course each Bureau head will be available to go into as much detail as the committee desires.

PROGRAM CHANGES HIGHLIGHTS

There are $1,285,000 included under various appropriation headings to carry on the Department's emergency program responsibilities which heretofore have been financed from appropriations to other agencies.

There is an item of $109,000 for celebration of the Department's 50th anniversary next year.

In the international relations field we are proposing an increase of $450,000, the bulk of which is for a program to provide a more adequate basis for designing labor policies and programs in support of the U.S. foreign policy.

There is an item of $2,630,000 for a comprehensive improvement or expansion of labor economic statistics of the Bureau of Labor Statistics, most of which is for support of manpower and skill development programs and of our vital price statistics program.

There is a total of about $25 million divided among several appropriations in the manpower-skill development field. Of this about $20 million would go to the State employment security agencies.

There is about $2 million allocated to what I call the labor-management relations standards and compliance field.

This paints with a broad brush the primary allocations of the program increase. It is to be noted that major emphasis is aimed at our critical manpower problems without overlooking needed improvements in our labor relations-standards program.

The picture which Mr. Clague has so dramatically pointed up emphasizes the need for vigorous action, by all concerned, to get at the problems of refurbishing the skills of our workforce, particularly the unemployed; to improve our system of free public employment services to attract greater utilization by both workers and employers and at the same time, not to diminish, but in fact to continue to seek improvement in the work standards of our labor force.

Í believe that with favorable action on the specifics of the programs, to be outEined to the committee by the various Bureau representatives, and with favorable action by Congress on pending legislative programs that we will be geared up to do the job needed to be done.

GENERAL STATEMENT

Secretary GOLDBERG. A year ago when I appeared before you I reported very briefly before I went into the details of our budgetary requested estimates about the state of the economy, knowing that this is a matter of great concern to this subcommittee which throughout the years has indicated great interest in the problems of employment and unemployment which are, of course, of statutory concern to the Department of Labor and to this committee which appropriates the funds for the Department.

UNEMPLOYMENT RATE

I am glad to report to you, Mr. Chairman and Senator Cotton, that since last year the economy has notably improved. Last year when I appeared before you, the unemployment rate was about 6.8 percent, which we all agreed was too high. Our economy was going along at a rate where we were producing goods and services at a level of about $500 billion in our gross national product.

A few weeks ago I reported to the country and I would like to report to you that for the first time in 16 months the adjusted rate of unemployment has fallen below 6 percent and now stands at 5.8 percent, the first time it has been below the 6 percent level since September of 1960.

The actual total for January is nearly three-quarters of a million below in terms of the unemployed figure of a year ago.

TOTAL EMPLOYMENT

There are other evidences of strength in our fine economy. Total employment was 65.1 million, a new record for January, 600,000 better than a year earlier, despite the fact that once again there has been a sharp drop in the farm employment which, of course, has been declining for many decades. Our farms are enormously productive. Later I want to say a word about the situation in the farms because it has been my considered judgment that neither the farm operator nor the farmworker is getting his justifiable return from the highly productive farm economy.

Nonfarm employment in January was 60.6 million, 800,000 above last year. This, too, is an alltime high for the month.

FACTORY WORKWEEK

The factory workweek in December averaged 40.5 hours, a rise o 1.3 hours from last January after taking into account the season factors.

Personal incomes, I am sure we take great satisfaction in noting rose to alltime highs in 1961.

The average factory worker, and I think we can take great pride i this, earned in December $96 a week before taxes, the highest level i our history, and for the first time in our history factory workers i our durable goods industries averaged during 1961 more than $10 a week before taxes.

Employment always reflects prosperity in our business community and this improvement in the employment situation is a symptom o improvement in the business community at large. Profits have mad an excellent recovery in 1961. The annual rate for the fourth quarte was in excess of $50 billion before taxes, and $25 billion after taxes the highest rate since the boom in the second quarter of 1959, jus before the steel strike. The total for the whole year of 1961, mor than $46 billion before taxes, is not much below the alltime high o $46.8 billion recorded in 1959 and is $4 billion, or more than 9 percent above the level of a decade earlier which was the high water mark fo the Korean boom.

STABILITY OF PRICES

I think also we can take satisfaction in the fact that prices wer remarkably stable during 1961, so that increased incomes were no eaten up by increased costs.

Mr. Chairman, as you and Senator Cotton often do, I have talked to many workers and the workers are very much concerned with th increase in the cost of living and price stability is something good fo the country and good for the people who work for a living. Whil we have had price increases in the past several years, it is not generally understood by workers or the population at large that on the whole our price structure has remained more stable than virtually every country in the world. As a matter of fact, as we take the last 10 years, the buying power of the average factory worker in real terms is 19 percent higher than it was 10 years ago.

Senator HILL. How much higher?

Secretary GOLDBERG. Nineteen percent. It is very hard to convince our wives who constantly complain about the diminution in purchasing power, but it is true that there has been a real advance in the standard of living in the United States during this decade.

Wholesale prices are even a little lower than they were a year ago, and the total rise in the price index during the last year is less than 1 percent which is very close to achieving the price stability that we want to achieve.

UNEMPLOYMENT PROBLEMS

With these favorable omens in our economy, nevertheless candor requires me to report to you that we still have unemployment problems in the country. As again both you, Mr. Chairman, in your great State and Senator Cotton in the great State that he represents also know.

LONG-TERM UNEMPLOYED

We had 4,600,000 Americans out of work in January. While this is a significant improvement over last year, it is still far too high. Particularly troublesome in this connection is the number of longterm unemployed, those who have been out of work for 15 weeks or more. This is not appreciably changed from last January. We have a total of 1,250,000 who have been out of work 15 weeks or more, and we have nearly 700,000 who have been out of work for 6 months or more. This is a matter of great concern to the administration and of great concern to the Members of Congress in both of our great political parties.

COMPETENCY STUDY

Senator HILL. Has any study ever been made as to what we might all the competency of these people who are out of employment for such a length of time?

Secretary GOLDBERG. Yes, sir. I would like to offer for the record a study that we made at the request of the Senate Finance Comittee, which considered the temporary unemployment compensaon bill, as to the characteristics of the unemployed, and this surveys he type of people who are in the long-term unemployed. It is a very illuminating study. It shows that in the long-term unemployed, the great majority are heads of families with work experience of a substantial character. It also shows that we are also having problems in places to work, new entries into the labor force which reinforces the great interest and concern this committee and your committee, Mr. Chairman, the Senate Labor and Public Welfare Committee, has displayed in upgrading the quality of education.

It also indicates that there are a substantial number among the unemployed who, while they have had work experience, are semiskilled or unskilled, and it points up the desirability of the bill which the Senate passed by such an overwhelming vote last year for retraining of these workers, a bill which has been reported favorably by the House Rules Committee and which we hope will be enacted by the House within the next 2 weeks so that we can proceed to help the people in this category who need help.

AGE CATEGORIES

Senator COTTON. In computing the percentage of unemployed, whatever the percentage is, does this survey that you are putting into the record show the ages? In computing that, at what stage does it start and at what age does it end?

Secretary GOLDBERG. This survey is a breakdown of the people who have received our temporary unemployment benefit that Congress approved last year and it does show the age categories.

Senator COTTON. Does it include those who never worked?

Secretary GOLDBERG. Yes. We count as unemployed young people who come into the labor market who have never worked but whenever they are in the labor market they are over 16 generally under our minimum wage law.

The particular survey I have in mind deals specifically with those who have accumulated enough work experience so that they are eligible for unemployment compensation.

YOUNG PEOPLE UNEMPLOYED

Senator COTTON. In this percentage and just why I should help the administration make its picture look better, I don't know-but in that percentage there are included many quite young people who have never worked; is that correct?

Secretary GOLDBERG. That is correct. In the 5.8 percentage I have indicated there are young people included who have left school who have tried to enter the labor market because they want jobs and who cannot find jobs. I can give you the figures on what they are. There are almost one million in this category in our country at the present time.

AREAS OF UNEMPLOYMENT

Senator COTTON. Is part of the overall unemployment concentrated in States like West Virginia where the mining has gone out? Are there certain areas where the unemployment is concentrated?

Secretary GOLDBERG. I must report that unemployment is something that affects the whole country. There are various areas where unemployment is particularly acute.

Last year we had more than 100 major labor market areas where this was true in all parts of the country, and this happily has declined to where it is now 60, but 60 is still a very great number indeed.

Senator COTTON. I am sure it is all over the country, but if certain areas that are under particularly unfortunate conditions because of the elimination of some of the industry were eliminated, that would bring the percentage down considerably; would it not?

Secretary GOLDBERG. Yes, sir.

Senator HILL. Did this survey show how far these people had gone in school?

Secretary GOLDBERG. This particular survey has not but we have general statistics dealing with this subject.

SCHOOL DROPOUTS

A great number of the youthful unemployed, a million, have dropped out of school before they finished high school, and this question of school dropouts, with which you, Mr. Chairman, have been so much concerned and properly so, is a very great problem, indeed, because with automation and technology sweeping American industry, the future prospective job opportunities for a youngster who does not complete at least a high school education are not very good.

I will offer for the record if I may, a survey which indicates how your job opportunities, let alone opportunities to lead a more fruitful life in many areas, are directly related to your schooling.

RELATION OF EDUCATION TO UNEMPLOYMENT

The fact of the matter is there is virtually no unemployment among college graduates. As you move down the ladder there is more unemployment for those who have dropped out of college before completing college. There is far more unemployment for those who have only completed high school. There is far greater unemployment for those who have never entered high school, and I would hope that this message which this committee and the Senate Committee on Labor