strated that your objective of bringing together top leaders of labor, management, and the public to arrive at a fuller understanding on vital policy issues can be achieved. We anticipate that recommendations concerning the other major topics assigned to the Committee-dealing with industrial peace, economic growth, wageprice policy, and world competition-will be forthcoming in the near future.

We commend to you the substantial public service rendered by the members of the Committee, who have dedicated themselves to the work of the Committee. Respectfully,

ARTHUR J. GOLDBERG,

Chairman. Vice Chairman.

LUTHER H. HODGES,

THE BENEFITS AND PROBLEMS INCIDENT TO AUTOMATION AND OTHER
TECHNOLOGICAL ADVANCES

Three central propositions have emerged in the committee's consideration of the significance and impact of automation and other technological advances. First, automation and technological progress are essential to the general welfare, the economic strength, and the defense of the Nation.

Second, this progress can and must be achieved without the sacrifice of human values and without inequitable cost in terms of individual interests.

Third, the achievement of maximum technological development with adequate safeguards against economic injury to individuals depends upon a combination of private and governmental action, consonant with the principles of the free society.

Automation and technological change have meant much to our country. Today the average worker in the United States works shorter hours, turns out more goods, receives higher wages, and has more energy harnessed and working with him than a worker anywhere else in the world. Increasingly, machines are relieving men of heavy physical labor and of dangerous and repetitive work. Competition in the world markets has been possible against foreign countries whose standards of living are below our own, though this advantage is diminishing. Finally, in a world split by ideological differences, automation and technological change have a tremendous and crucial role to play in maintaining the strength of the free world.

For these reasons, we emphasize at the outset the imperative need for and desirability of automation and technological change. Indeed, increased productivity and fuller utilization of resources are urgently needed to improve our rate of economic growth. They are likewise needed to improve our competitive position in world markets. Failure to advance technologically and to otherwise increase the productivity of our economy would bring on much more serious unemployment and related social problems than any we now face.

It is equally true that the current rate of technological advance has created social problems and that an acceleration of this rate may intensify these problems. While advancing technology has given rise to new industries and jobs, it has also resulted in employee displacement; and the fact that new work opportunities are eventually created is no comfort or help to the displaced individual who cannot, for one reason or another, secure comparable or any employment. While employment has expanded in some industries, the net effect of rising output per worker, of the growing labor force, and of other factors has been an increase in the volume of unemployment during the past few years even as total employment has reached new heights.

The impact of technology on agricultural employment has been particularly great. Along with other factors, it has resulted in over 1,600,000 workers-20 percent of the total-leaving the farms since 1950. Yet farm output has increased 28 percent, making available to our people an abundance of food, while there was famine in some of the Communist countries. This increased output enabled this country to be of substantial assistance to needy people elsewhere in the world.

Our purpose, then, is to seek that course of action which will encourage essential progress in the form of automation and technological change, while meeting at the same time the social consequences such change creates.

We recognize that the subject of automation and technological change cannot be dealt with apart from two broader subjects: increased productivity in general, and unemployment.

We are preparing a separate report on economic growth, and only note here the basic importance of such growth to any consideration of the problems-and the opportunities-automation and technological advance present.

Regarding technological advance and unemployment, it is clear that unemployment has resulted from displacement due to automation and technological change. It is impossible, with presently available data, to isolate that portion of present unemployment resulting from these causes. Whether such displacement will be short-run depends to a considerable extent on our ability to anticipate and plan for programs involving technological change and to make better use of various mechanisms for retraining and relocating workers who find themselves unneeded in their former occupations. We have necessarily given general consideration in this report to some aspects of the broader unemployment problem and to the prospects of more effective use of the work force.

A long stride toward solution of the unemployment problem will be made if we first recognize the nature of the problem. We regard the following factors as important in this connection:

1. The recent rate of economic growth in the United States has been insufficient to reduce unemployment to a tolerable level.

2. The exact extent of unemployment attributable to automation and technological change is unknown, since it is greatly complicated by other factors, such as:

(a) The economic recession of 1960-61.

(b) The unusually high entrance rate into the labor market, caused by the great postwar population increase. In the next 10 years it is expected that there will be a net gain in the labor force of 13%1⁄2 million workers.

(c) Chronic unemployment in distressed areas.

(d) The effects of the rapid advances which have been made by foreign competitors.

(e) Changing consumption patterns.

(f) The changing nature of jobs which often leaves a gap between job requirements and qualifications of applicants. During the 1950's there was a 58-percent increase in the number of skilled technical and professional workers. Unskilled workers, with only a limited education, found it more difficult to get, or hold, a job. In this connection, the Department of Labor projections indicate that unless steps are taken to reduce the dropout rate among high school students, some 7%1⁄2 million of those new workers joining the labor force in the 1960's, or more than 30 percent, will not have completed high school, and over 21⁄2 million of them will not even have completed grade school.

(g) Discrimination against workers on the basis of age, sex, race, and creed. (h) Multiple jobholding by individuals.

(i) The continuing movement of workers away from the farms.

3. Public employment service facilities have been inadequate as well as seriously uneven in their effectiveness with respect to helping workers find new jobs, counseling them as to the kinds of jobs which are liable to be available in the future, and advising them as to job prospects in other geographical areas.

4. The mobility of workers is reduced by factors running contrary to the demands of a dynamic society, and an economy in transition.

(a) The nontransferability of pension, seniority, and other accumulated rights may result in an employee's being dependent upon his attachment to a particular job as the sole means of protecting his equities.

(b) Desirable and essential mobility is affected by reluctance to leave homebecause of personal ties, or because other members of the family may be working; by the cost of moving and possible losses on local property; and by the insecurity of jobs in a new locality.

5. Educational and informational facilities have been inadequate in that: (a) The requirements for general education prior to vocational and professional training have not kept pace with the shift in job opportunities.

(b) The required types of vocational and technical training and retraining are often not available, e.g., for workers leaving the farm.

(c) There has been an inadequate liaison among school systems, industry, and Government with respect to future job requirements, and in fact there is insufficient information about the nature of such jobs.

(d) There has been inadequate financial support for needy students.

(e) Counseling facilities have been generally inadequate.

6. Proper retraining facilities, and a system of financial support for workers while retraining, have been lacking.

These are some of the relevant circumstances of a society in which automation and technological advance are essential motive forces. The operation of these

forces within the social context creates serious displacement problems-not as a necessary price of progress but as the stern consequence of failure to recognize and provide for these problems. We reject the too common assumption that continuing unemployment is an inherent cost of automation.

We believe, rather, that a combination of energetic and responsible private and public action will permit the advancement of automation and technological change without the sacrifice of human values, and that such combined efforts can cope satisfactorily with the total unemployment problem-including whatever part of it may arise from the displacements which result inevitably from the introduction of new devices and processes.

We do not attempt here an exhaustive exploration or enumeration of all the ways and means of achieving maximum technological progress with the minimum of individual disadvantage. Our suggestions can be only representative of a broader set of possibilities. We recognize, furthermore, that the totality of any combination of recommendations must be viewed in the light of such relevant factors as their costs to individual enterprises, their effect on the Federal budget, and their influence on general price levels.

We recommend that serious consideration be given the following measures: 1. Adoption by the Government and others of policies which will promote a high rate of economic growth and fuller utilization of resources. A much higher rate of growth is essential and is the best device for reducing unemployment to tolerable levels. We will include in our forthcoming report on economic growth suggestions in this area.

2. Acceptance by Government agencies of the responsibility for collecting, collating, and disseminating information with respect to present and future job opportunities and requirements in a rapidly changing society.

3. Cooperation between Government and private organizations in the field of education in improving and supporting educational facilities to the end that:

(a) New entrants to the labor force will be better qualified to meet the occupational demands of the future;

(b) The dropout rate at grade and high school levels will be reduced;

(c) Better vocational, technical, and guidance programs will be available; (d) Rural and depressed areas, where surplus workers reside, will be better served;

(e) Financial support will be available for deserving and needy students; and (f) There will be a general upgrading in the quality of our education.

4. Acceptance by management of responsibility for taking measures, to the maximum extent practicable, for lessening the impact of technological change, including:

(a) Adequate leadtime.

(b) Open reporting to the employees involved.

(c) Cooperation with representatives of the employees to meet the problems involved.

(d) Cooperation with public employment services.

(e) The timing of changes, to the extent possible, so that potential unemployment will be cushioned by expected expansion of operations and normal attrition in the work force (through separations resulting from retirement, quits, and so forth).

5. Support from both public and private organizations for retraining of workers who have been and will be displaced.

(a) Private employers and unions faced with automation or technological changes should make every reasonable effort to enable workers who are being displaced, and who need to be retrained, to qualify for new jobs available with the same employer, and to enjoy a means of support while so engaged.

(b) Where it is not possible for the employer to reabsorb displaced workers, appropriately safeguarded public support in the form of subsistence payments should be available to industrial and agricultural workers who qualify for and engage in retraining.

(c) Unemployment compensation laws should be liberalized to permit and to encourage retraining.

6. Support from both public and private sources, with due consideration to the circumstances of the enterprise involved, for the displaced worker who is seeking new employment.

(a) The duration, coverage, and amount of unemployment compensation, where inadequate, should be increased and made subject to realistic uniform minimum requirements under the Federal-State system.

(b) Employer supplementation of public unemployment compensation should be accomplished through severance pay, supplemental unemployment benefits, and similar measures.

(c) Attention should be given to provision for the special case of the worker who is displaced during the period when he is approaching retirement. This may appropriately include consideration of provision for early retirement, through private arrangements or social security measures; but alternative possibilities of more constructive temporary uses of such services warrant exploration.

7. Support from both private and public sources to the end that a worker's job equities and security may be protected without impairment of his mobility. This will warrant consideration, taking into account relevant cost factors, of such

measures as

(a) Financial aid in the transfer of employees to other plants in a multiplant system, and protection of existing rights for individuals so transferred.

(b) The use of public funds in order to give financial aid in the transfer of unemployed workers from one area to another where the result will be to provide continuing employment.

(c) The improvement of public and private protection of pension rights.

(d) The recognition by unions, individual employees, and employers of the necessity of adapting seniority and other rules in order to facilitate mobility of workers, while providing protection for the equities of employees.

The Committee notes particularly the need for further study and exploration of this vital area.

8. Vast additional improvement of the public employment service so that it can effectively place, counsel, and relocate workers both locally and across State lines. We note with approval the start which has been made in this direction. 9. Vigorous and unremitting efforts by all segments of the population-including government, employers, unions, and employees-to eliminate discrimination in employment because of race, creed, age, or sex.

10. There are pressing national needs to be met, and an abundance of manpower available to meet these needs. This matching of manpower and national needs, which is part of the vital context of the automation and technological advance problem, will obviously be affected by various broader governmental policies. Reserving fuller consideration of this area for our economic growth report, we nevertheless note here that:

(a) When technological changes or other factors develop particular pockets of unemployment, this becomes an additional reason for the undertaking, particularly at the State and local levels but with Federal assistance where this is necessary, of public development projects for which there is need independent of the employment need itself.

(b) Every effort should be made to maintain on an up-to-date and ready-to-go basis a schedule of needed public development projects, particularly those which could be started most quickly and which would be of short or controllable duration, so that the initiation of such projects can in the future be advanced, and the flow of projects already underway can be speeded up, if the manpower situation warrants this.

(c) If the operation of the economy, including the effect of automation and technological change, creates or leaves an intolerable manpower surplus, consideration should be given to monetary and fiscal measures including the possibility of appropriate tax reductions—which would give promise of helping alleviate this situation.

(d) Governmental action along the lines suggested here, stimulated in part by the need to meet unemployment situations, would obviously have to take account of other considerations, including particularly the maintenance of national economic stability and security. We simply assert, however, the coordinate importance of stability and growth.

11. The need for goods and services must not be left unfilled, particularly in a time of international crisis. At the same time, high unemployment is intolerable. In the light of our current responsibilities to meet world conditions, and in view of our unmet needs at home, we consider the development of programs directed at the achievement of full employment as being more significant at the present time than the consideration of a general reduction in the hours of work. A reduction in the basic work period has, however, historically been one means of sharing the fruits of technological progress, and there may well develop in the future the necessity and the desirability of shortening the work period, either through collective bargaining or by law or by both methods. In connection with such a development, con

sideration would necessarily be given to the extent to which purchasing power could be maintained along with a reduced work period.1 2

We affirm our conviction that the infinite promise of automation and technological advance can be realized without loss or cost of human values. America can enjoy the fruits of higher productivity without having to accept, as the inevitable result, serious social consequences growing out of the displacement of workers.

The recommendations made here suggest our view of a broader pattern of possible courses of action which would necessarily have to be adapted to particular circumstances, but which permit the constructive and responsible uses of technology and automation. We see no barriers-except misunderstanding, timidity, and false fear-to the accomplishment of this purpose by a coordination of private and public programs wholly consonant with the essential concepts of the free society.

We assert the necessity of automation and technological development to the maintenance of American standards of living and to the fulfillment of this country's role of leadership in freedom's fight for survival. We assert equally the obligation and the capacity of Americans as individuals and as a group-to use these new instruments and methods to enrich the lives of all of us.

We see no reason for alarm if out of a greater sense of common purpose we can achieve the good will and the determination to act together.

COMMENT BY ARTHUR F. BURNS

I find parts of this report highly constructive, particularly the recommendations designed (a) to achieve efficient and yet humane management of technological changes, (b) to improve the functioning of the labor market, and (c) to extend the coverage and otherwise strengthen the unemployment insurance system. Nevertheless, I am troubled by the report as a whole, and I consider it a dubious guide to economic policy.

The reasons for my dissent are as follows:

(1) The report fails to identify or to analyze or to assess the quantitative importance of the different causes of unemployment. Nevertheless, it conveys the impression that technological advances are a major, if not the major, cause of recent unemployment. I know of no evidence to support this view, and I deplore anything that adds to the greatly exaggerated fears that many people have of what is loosely called automation.

(2) The report suffers from a failure to link its proposed remedies to the causes of unemployment. Thus, the report does not mention seasonal unemployment or ways of dealing with it. It does not mention the loss of exports by some industries or the policies needed for coping with this source of unemployment. It does not distinguish cyclical unemployment from other types or indicate how public policy for dealing with recessions should be improved. On the other hand, the report puts heavy emphasis on public works and seems to suggest that this kind of governmental spending is a good remedy for unemployment, regardless of its cause. Unhappily, public works are poorly suited for dealing with mild recessions or with local pockets of chronic unemployment.

(3) Most recommendations of the report are couched in such vague language that they may mean much or little, depending on how they are interpreted. But, if experience is any guide, neither the vagueness of language nor the surrounding qualifications will prevent articulate groups of our society from claiming the authority of this Committee for programs that could prove damaging to our economy. If all or most of the recommendations were implemented fairly

1 Mr. Meany, Mr. Dubinsky, Mr. Harrison, Mr. Reuther, and Mr. Keenan are of the view that this paragraph should read as follows:

"The need for goods and services must not be left unfilled, particularly in a time of international crisis. At the same time, high unemployment is intolerable. In the light of our current responsibilities to meet world conditions, and in view of our unmet needs at home, we consider the development of programs directed at the achievement of maximum output and full employment as most significant at the present time. However, if unemployment is not reduced substantially in the near future we will have to resort to a general shortening of the work period through collective bargaining and by law. In connection with such a development, consideration would necessarily be given to the extent to which purchasing power could be maintained along with a reduced work period. A reduction in the basic work period has historically been one means of sharing fruits of technological progress."

* Mr. McDonald, Mr. Reuther, and Mr. Keenan comment as follows:

"We agree that, in the light of the considerations stated, the most desirable solution now to the problem of unemployment is the development of programs which will achieve full employment at 40 hours per week. Saying that this is the most desirable solution is not, however, the same thing as saying that we have in fact achieved that solution or that we will in fact achieve it in the near future. And only the fact of full employment-not a statement of its desirability-can properly serve as the premise for the statement that the necessity for shortening the work period will only develop 'in the future.' If we fail, as we have so far failed, to achieve the most desirable solution we will have to move more quickly than we are now moving in the direction of shortening the work period."