On the debit side, the stubborn problem of unemployment is still with us. Nevertheless new programs have been initiated and others are awaiting action by Congress-programs which are designed to attack the basic causes of unemployment. The Department of Labor is primarily concerned with the labor force itself. Are our working men and women qualified for the skilled jobs of the future? How many of our younger workers are unemployed because of inadequate skills? How many older workers are unemployed because of outmoded skills? How many workers are unemployed or impeded from advancing in employment because of discrimination based on race, religion, nationality, sex, or age? These are basic questions which must be answered if we are to achieve full utilization of our labor force. During 1961 the Department has attempted to answer these questions and suggest solutions to the problems they raise.

The Department has been concerned with the promotion of labor-management peace, the passage of needed labor legislation, and administrative improvement within the Department of Labor itself. Listed below are some of the more significant achievements within the Department's area of responsibility during 1961.

I

MAJOR NEW POLICIES AND ACTIVITIES OF THE DEPARTMENT OF LABOR

A. Employment

1. Automation.—On April 20, 1961, there was established within the Department an Office of Automation and Manpower. This is the first time there has existed in the Government an operational unit dealing with the employment problems created by automation and other technological developments. has been heretofore limited research work performed which is now being expanded and additional resources will be required to cope with this problem.

There

2. Youth employment.-The President established a President's Committee on Youth Employment, headed by the Secretary of Labor, to bring the Nation's attention and resources to bear on the vital national problem of out-of-school and out-of-work youth, which has been described by the Committee's distinguished Vice Chairman, Dr. James B. Conant, as "social dynamite." The Committee is actively at work seeking means to help our 1 million unemployed young people. 3. Employment of women.-The President has established a President's Commission on the Status of Women, headed by Mrs. Franklin D. Roosevelt. Using the facilities of the Labor Department under the direction of Assistant Secretary of Labor Esther Peterson, its Executive Vice Chairman, the Committee is studying and will report on policies and practices affecting the employment of women. 4. Employment statistics. In order to insure that the public may have complete confidence in employment and unemployment statistics of the Government, the President, on the recommendation of the Secretary of Labor, has appointed a committee to review the statistical methods employed in figuring the number of the employed and unemployed. The Committee will make recommendations for any improvements which its study may indicate will be helpful.

B. Labor peace

Under the direction of the President the agencies of Government concerned in the labor-management area have taken a number of steps to promote industrial peace. Partly as a result of this action, during 1961 the United States enjoyed its greatest period of industrial peace since the end of World War II. Only oneseventh of 1 percent of all estimated working time of all nonagricultural workers was lost because of strikes. The number of strikes and the number of man-days lost to them were both at postwar lows.

In its activities the basic philosophy of the administration has been to preserve collective bargaining, not to intervene by dictating the terms of settlement but to use the good offices of the Government to help avert or end strikes. The Department of Labor in this activity has worked in close harmony with the Federal Mediation and Conciliation Service and the National Mediation Board, whose basic jurisdictions in these areas have been preserved. These agencies have made an outstanding contribution in preserving labor peace and will report separately on their accomplishments. The activities of the Secretary of Labor have been limited to those relatively few situations where his good offices have been requested by the parties themselves and by the appropriate Government agency to help effectuate a mutually acceptable settlement in specific labor disputes. Most of the Secretary of Labor's activities have been in the transportation area, which has always been recognized as vital to the Nation's health and safety.

A new era in labor-management relations at missile and space sites has been inaugurated. The President's Missile Sites Labor Commission has been created, chaired by the Secretary of Labor with the Director of the Federal Mediation and Conciliation Service, William E. Simkin, as vice chairman, and a no-strike, no-lockout pledge has been obtained for missile and space programs. The overall record of labor since the activation of the Commission reflects a gratifying measure of accomplishment. The cumulative lost time from June through November 1961 (approximately 4,260 man-days) as related to the man-days worked (approximately 7,126,000) is 0.06 percent. This represents 4.4 percent of the average time lost at missile sites during the 57-month period prior to March 31, 1961, and only 11 percent of the average time lost in the construction industry in the United States during this same period.

The President's Advisory Committee on Labor-Management Policy was created by Executive order of the President on February 16, 1961. It was assigned responsibility for studying and advising the President with respect to policies which will promote free and responsible collective bargaining, industrial peace, sound wage and price policies, higher standards of living, and increased productivity. The Committee has met regularly, and is preparing specific policy proposals in a number of areas.

The President established a Task Force on Employee-Management Relations in the Federal Service. This group carefully studied the subject assigned to it and on November 30, 1961, submitted to the President a report recommending a constructive, forward-looking program of employee-management relations within the Federal establishment keyed to current needs. The President will implement the task force recommendations by Executive order, thus providing an effective system for developing improved employee-management relations within the Federal establishment.

II

MAJOR NEW LEGISLATION

A. The Temporary Extended Unemployment Compensation Act of 1961: In the depths of the recession, millions of our workers exhausted their rights to unemployment insurance benefits, which are payable for only a certain number of weeks. When faced with the same problem in 1958, the Congress enacted a program which in effect turned the burden of decision to the States. This year, the President's proposals asked for an acknowledgement of the national character and national responsibility of the problem. Every State participated in the program that was passed. As of November 30, 1961, 2.3 million persons had filed claims and $523 million in additional unemployment insurance payments had been made under this act.

B. The Fair Labor Standards Act: For the first time since the act was passed 23 years ago, millions of workers were given the protection of the Federal minimum-wage law at the same time that the amount of the wage was increased, in steps, to $1.25 an hour. The Fair Labor Standards Act of 1961 reversed the longstanding policy of stabilizing or decreasing coverage under the act whenever the minimum wage itself was increased. The result has been an increase of $175 million in the pay of workers covered by the act during 1961, and $536 million annually in the future. These are "high-velocity dollars" which got immediately into the economy.

C. Additional position of Assistant Secretary of Labor: Public Law 87-137 permitted high-level recognition of the importance of women in the labor force. Mrs. Esther Peterson, Director of the Department's Women's Bureau was appointed by President Kennedy to serve in the new Assistant Secretary of Labor position. The Department is proud to have the highest ranking woman in the executive branch of the Federal Government.

D. Armed Forces reemployment rights: Public Law 87-391_clarifies and reenforces the reemployment rights of members of the Armed Forces under the Universal Military Training and Service Act by permitting an additional 4-year period of service for reemployment rights for active duty performed after August 1, 1961.

Other major legislation nearing enactment includes:

A. The Manpower Development and Training Act of 1961 is designed to deal with the problems presented by the large numbers of unemployed workers who cannot secure full-time employment without retraining, as well as the need to upgrade the skills of workers so they will be qualified for the types of jobs that are and will be available in our highly advanced industrial society. The bill will

develop new and accelerated training and retraining programs of on-the-job training and vocational education. It authorizes Federal payment of a minimum level of income for a maximum period of 52 weeks to certain persons while they are undergoing training. The bill passed the Senate and was reported favorably by the House Labor Committee.

B. The Welfare and Pension Plans Disclosure Act amendments will strengthen the act and thus safeguard the interests of 80 million beneficiaries of these plans. PC. The Youth Employment Opportunities Act of 1961 is intended to develop, through the use of different kinds of pilot programs, methods for assuring that our young people will find useful employment that they are equipped to carry out. The bill provides on-the-job and related training, including classroom instruction; public-service and public-works employment and training; and a camp-oriented Youth Conservation Corps.

D. The Employment Security Amendments of 1961 will extend protection of the unemployment insurance program to more than 3 million additional workers, establish a permanent Federal program of additional unemployment compensation to workers who have exhausted all benefit rights, increase the taxable wage base, provide for equalization grants to States, establish Federal requirements with respect to weekly benefit amount, and provide that compensation not be denied to a person solely because he is taking training to which he was referred by a State agency.

E. The administration's proposals for improvement of the migratory labor situation were addressed to a long-neglected social and economic problem. Unlike previous years, all Government agencies concerned supported administration bills to require registration of crew leaders moving in interstate commerce, to eliminate employment of young children in agriculture, to authorize the Secretary of Labor to undertake new and stronger means of recruiting and moving underemployed U.S. workers to employment on U.S. farms, to establish a National Citizens Council on Migratory Labor, and to improve the health, welfare, education, and housing of migrants. The Senate passed S. 1123, child labor in agriculture; S. 1124 and S. 1125, education of migrants and their children; S. 1126, registration of crew leaders; S. 1130, grants for health services to migrants; and S. 1132, National Advisory Council on Migrant Labor.

F. The administration's equal pay bill prohibits discrimination on the basis of sex in the payment of wages by employers having employees engaged in commerce or the production of goods for commerce. Such employees must be paid equal pay for comparable work, regardless of sex.

III

SPECIAL ACHIEVEMENTS IN DEPARTMENTAL PROGRAMS

A. Davis-Bacon Act: In the year 1961, there has been vigorous enforcement of the Davis-Bacon Act and related laws dealing with labor standards on Federal and federally-assisted construction projects. The number of wage determinations issued has exceeded 46,000, a new record and 10 percent above the high of the previous year. Restitution was approximately $300,000 for more than 2,700 employees. The number of 8-hour law penalties assessed was more than twice as high as the preceding year and the number of firms and individuals blacklisted under the act was up 50 percent.

B. Minimum wage law enforcement: Enforcement operations under the Fair Labor Standards Act were also highly effective. Approximately 42,000 establishments were investigated during 1961. The amount of underpayments found was $30% million; the highest amount found due since statistics on this were recorded in 1946. Employers agreed to make payment of approximately $141⁄2 milllion.

C. Walsh-Healey Public Contracts Act: The Secretary of Labor took steps to speedup and improve minimum wage determination procedures under the WalshHealey Public Contracts Act. The changes dramatically reduced the timelag in surveying an industry and determining its prevailing minimum wages. In the past, the timelag averaged between 2 and 3 years and sometimes ran as long as 41⁄2 years. The new procedures are expected to shorten this period to less than 1

year.

D. Public Employment Service: At the direction of the President, the services to job applicants registered with the U.S. Employment Service and affiliated State employment security agencies have been expanded and improved. The administration's support and the additional funds allocated by the Congress have provided workers and employers of the Nation with a more fully staffed, better equipped,

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 from 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.

I believe that with favorable action on the specifics of the programs, to be outlined 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.