In his testimony before the subcommittee, Mr. Odell indicated that the Employment Service is at present reaching only a small fraction of the dropouts who are in need of help to secure a job. There is evidence that most of the dropouts need positive guidance and placement service. There is a gap in the service available to the thousands of youths during the summer months who need assistance in securing employment. Some communities, and a few States, have established projects in cooperation with school authorities, but for the most part these are not adequately organized and systematically operated by employment offices. There is a definite need for a specialized approach to youth employment. This has been taken by some schools in organizing school-work programs. For the most part, these programs are usually confined to commercial students and those interested in retail occupations. They have contributed toward keeping many youths in school and, at the same time, providing an opportunity for earning an income and furnishing beneficial work experiences.

Senator KEFAUVER. Mr. Chairman, I am also especially interested in one other section of this bill, and this is the procurement section beginning with section 11 and section 12 on pages 9 and 10.

I think that the language there is good, directing each department and agency to engage in procurement of any supplies for the use by or on behalf of the United States Government to the maximum practicable extent to secure such services from contractors in depressed areas.

The language is, of course, necessarily general, and I would strongly recommend to the committee the consideration of more specific language such as was suggested by Senator Kennedy last year in an amendment offered on the floor of the Senate.

I think section 12 is of great importance, and I hope that it will be construed to mean that the Administrator will particularly keep a list of small-business firms in depressed areas and will have liaison with the Defense Department, enabling the small-business concerns in these depressed areas to be considered by the procurement departments of the Government.

I think one reason, always, why small business has never really secured its share of defense procurement, particularly, is that they simply cannot maintain the representatives in Washington to coordinate to present what they can do to coordinate their bids with the demands of the Defense Department. That was a very splendid service rendered years ago by the Smaller War Plants Corporation, and I should hope that this section might also be enlarged so as to bring in some of the activities that were formerly carried out by the Smaller War Plants Corporation placed under the Administrator in this bill, and I would like to recommend also, Mr. Chairman, that the Administrator be required to file an annual or semiannual report with the Congress or with this committee and a similar House committee on just what success he has had with the Defense Departments in placing and helping small industries place contracts with the procurement.

Senator DOUGLAS. Those are very constructive suggestions, I think, Senator Kefauver.

Senator KEFAUVER. Thank you. In conclusion, I should like to observe that our failure as a Nation to provide proper job training and proper job opportunities for our citizens young and old constitutes a shocking waste of natural resources.

The power of the individual to produce is as much a natural resource as unharnessed waterpower. If it is not employed, it is wasted;

Odell, Charles E., op. cit., pp. 58-59.

it cannot be stored. If men are able and are willing to work, but are forced to be idle by lack of jobs or capacity to perform in a decent job, the community has wasted the valuable resources of manpower, and because of idleness, the individuals are likely to suffer a loss of skill and a breakdown of morale. The Nation is poorer both by the goods that could have been produced and by the frustration and loss of morale of the unemployed individual.

Without the satisfaction of useful activity, without the sense of security in a job well done, most men lose some of their self-reliance and some of their ability to be productive. This waste of human resources is a great challenge. It is a surprising comment on a nation that prides itself on its skill in organization, in administration, and in management, that such a tremendous waste of resources can occur. Mr. Chairman, and gentlemen of the committee, I should like to point out also that I think this bill is a very important step in connection with the proper defense of our country. I think it has very definite national defense aspects, and I say that for this reason: I think all of us feel that this cold war is liable to continue on for a considerable length of time. An important part of it is the ability of the East and the West to produce. We cannot continue to win the cold war unless our productive capacity continues to be larger and better than that of the Soviet and its satellite countries. Most of us who had the opportunity of visiting the Soviet Union this summer or fall, I think, felt that the industrial output and future potential of the Soviet has been underestimated. A large percentage of the 225 million people in the Soviet Union itself, are working long and hard. It is true they do not have the organizational ability.

They do not have the individual initiative. Up to this point, they do not have the training or the skill that American workers have, but we cannot overlook the fact that in their heavy industry factories they are working 6 days a week, 8 hours a day; sometimes very frequently at no overpay.

If there is some special job to be done, those people have literally been worked very, very hard. It is true it is a kind of slave labor, but by propaganda and other methods, they are getting a lot of useful work out of these Russian workers.

I think we have been underestimating what their potential is in the years to come. So it seems to me that if we are going to continue to win the cold war economically, we have got to make the fullest utilization of our manpower all over the Nation, and we cannot afford in the interest of the defense of the country to have substantial unemployment; we cannot afford to have areas distressed where there is idleness and not full production, and I hope that this bill will be considered as one of the musts in this session of Congress. I think it is tremendously important from that angle, also.

In conclusion, Mr. Chairman, S. 2663 presents us with an opportunity to make more effective use of the human resources we have available in this Nation. I commend it to your attention and to the attention of our colleagues in the Senate, and I urge that you put your full influence behind its passage in the Senate.

Thank you very much.

Senator DOUGLAS. Thank you.

We are very happy to have with us Congressman Lane, who represents the Seventh District of Massachusetts.

STATEMENT OF HON. THOMAS J. LANE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MASSACHUSETTS

Mr. LANE. Thank you, Senator. May I first express to the committee my appreciation of your kindness and your thoughtfulness in allowing me to appear here before your honorable committee this morning in a brief way on this very, very important bill.

Like yourselves, I have listened attentively here this morning to the remarks of the various speakers, and I, too, am satisfied, as the previous speaker has stated, Senator Kefauver, that this is one of the must bills of this Congress, and I am hopeful, too, that some favorable legislation will come of it.

I suppose that my remarks can be brief because of the fact that I endorse the remarks of my colleague, my Senator from Massachusetts, Senator Kennedy, and he has told you from his own personal experience and knowledge that Massachusetts and New England have need of this legislation because of the fact that we have had these labor surplus areas over a long period of time now, and the various programs that have been initiated by the Government, whether it has been under the Democratic administration or the Republican administration, has not enured at least to the benefit of the city in which I live and which I have the honor of representing here in the Congress. Senator DOUGLAS. That is Lawrence?

Mr. LANE. That is right, Senator.

Senator DOUGLAS. That is a great woolen industry.

Mr. LANE. That is right—a textile. I don't like to keep repeating it. It is like playing an old record, but it has been hit extremely hard due to this distressed situation, and so, again, I noticed and I have listened attentively to my Senator's remarks, and he has put his finger on the entire subject matter.

For that reason, I know that I should be short, because he has covered it well. I would like also at this time, Mr. Chairman and members of the committee, to call to your attention a very interesting pamphlet that was issued in September of last year by the Congress of Industrial Organizations' Department of Education and Research, entitled "The Distressed Area-A Growing National Problem."

In that pamphlet I note that this committee and the staff of this very active committee of the Senate will find a great deal of truthful and useful information that may help the committee in arriving at a decision.

Senator DOUGLAS. Would you like to have that made a part of the record, Congressman?

Mr. LANE. I would like to.

Senator DOUGLAS. That will be done.

(The document referred to follows:)

THE DISTRESSED AREA: A NATIONAL PROBLEM

(Congress of Industrial Organizations, Department of Education and Research) Newspapers across the country headlined the good news that national ouput in May 1955 had at last overtaken the previous peak of springtime 1953. Unfortunately, the fact that total unemployment in May was running more than a million higher than 2 years before-despite the new production peak-was scarcely mentioned, if at all.

The tendency of employment to lag behind mounting production nevertheless does disturb many people. They realize that the twin factors of rising output per man-hour (productivity) and the constantly growing number of individuals in the job market (our expanding labor force) present a challenge that calls for effective planning and action if all Americans who are able and eager to work are to enjoy employment opportunities.

But, in addition to this nationwide problem, there is another and more localized aspect of the unemployment question which also demands our attention. We refer to the plight of many areas where a state of chronic unemployment existsa special and exceedingly difficult problem which tends to be concealed by the overall statistics on national unemployment. These are communities where involuntary idleness is continuous and often acute even when most other parts of the country may be enjoying peak prosperity.

Surely we cannot afford to ignore the special problems of these chronically depressed areas. Programs-both public and private in nature-must be developed to help these communities eradicate the idleness and economic decay which have infected them.

THE AREAS OF "SUBSTANTIAL LABOR SURPLUS"

The level of unemployment varies greatly among communities across the Nation. While the ranks of the jobless increased almost everywhere during the 1954 recession-last year 5 percent of the civilian labor force was unemployed, compared with 2.1 percent in May 1953 and 3.7 percent in July this yearthe rate of idleness differs substantially from one locality to another.

Every 2 months the United States Department of Labor makes a job survey in the various labor-market areas throughout the country which highlights these differences and notes the changes which are occurring.

First, the unemployment rate in the 149 major labor-market areas in the United States is regularly checked. These are the Nation's largest production and employment centers; each has a population of at least 100,000 and includes at least one central city of over 50,000 and the area around it within commuting distance.

In addition, job changes in a limited number of smaller labor-market areas are checked. These are defined as localities outside the major areas, but each has a labor force of at least 15,000, or nonagricultural employment of at least 8,000. Labor Department studies in these smaller areas occur only if a special request is made by a mayor, a union, or a Congressman who is concerned over a local distress situation.

In areas smaller than these, however, no Federal unemployment check is made at all.

Here is what was revealed by the July 1955 report at a time when national production was breaking all-time records:

Substantial unemployment-at least 6 percent of the labor force reported idle still existed in 31 of the 149 major labor-market areas. In 12 the jobless rate exceeded 9 percent; in 7 it was over 12 percent.

In addition, unemployment exceeded 6 percent in the 101 smaller labor-market areas in which a count was made. In some of these the jobless rate runs as high as 20 percent.

Thus, in the midst of a peak production boom a substantial labor surplus still exists in 132 major and smaller labor-market areas. Furthermore, these areas are not concentrated in a few isolated sections; they exist in 32 of the 48 States. (See table, pp. 8-9.)

AREAS OF "CHRONIC DEPRESSION"

Changes in the overall economic situation, within a particular industry, or of a purely local character, result in a constant changes in the official list of substantial-labor-surplus areas. Some disappear, at least for a time; others are

added.

Yet, there are certain chronic-labor-surplus areas which never seem to drop off the list even at times when most of America's industries are booming.