3. Cooperation with colleges and universities.-The Secretary of Labor should be authorized to make supporting grants to colleges and universities for development of appropriate curricula and training materials and for the establishment of regional training centers for Employment Service personnel. Currently, he does not have such authority. Present programs for training personnel in colleges and universities could then be utilized where appropriate.

4. Budgets. The budget for Employment Service operations, which the Secretary of Labor submits to the Congress, should contain a line item with respect to training. This not only emphasizes the importance of training; it also underscores the congressional intent as to how the money is to be spent.

THE MOBILITY OF PERSONNEL

A third method of improving the quality of personnel in the Employment Service is to facilitate their mobility within the Federal-State system. Freedom of movement enhances long-term career opportunities. This is important to college-trained and other career-minded employees who want the opportunity to advance. Furthermore, facilitating mobility will enable the system to tap the reservoir of personnel qualified and experienced in the Federal-State program. The following are recommended:

1. The Federal-State transfer of personnel.-Provisions should be made for an employee in a State agency to be appointed to a Federal position if he has permanent status in the State agency which he acquired through competitive examination under a State Merit or Civil Service system approved by a Federal agency and if he passes such examination as the U.S. Civil Service Commission prescribes. A person so appointed may acquire a competitive status upon completion of a probationary period of 1 year. This suggestion has been discussed within the Department of Labor for several years and has the support of the Secretary of Labor and the U.S. Civil Service Commission.

2. Movement of personnel among the States.-The Secretary of Labor should be given legislative authority to develop a system permitting transfers of temporary leaves of absence for personnel to move among State agencies without loss in employment status, job protection rights, pension rights, and other accumulated benefits.

DEVELOPMENT AND DISSEMINATION OF LABOR MARKET INFORMATION

The intelligent formulation and implementation of national manpower policies requires current and comprehensive labor market and job information. The Employment Service has extremely important responsibilities in the collection, analysis, and dissemination of such information. In carrying out these functions, the Employment Service must consider both its own requirements and the needs of other agencies and organizations.

RESEARCH AND DATA COLLECTION

As a fundamental step, the Employment Service should be responsible for insuring the adequacy of existing labor market information. There is great need for a delineation of the responsibilities of the Employment Service, the Bureau of Labor Statistics, and other agencies of the Government with respect to the collection of labor market information. Considerable duplications of effort prevail and the public should not be burdened by requests from various agencies for similar information. The Secretary of Labor should take the lead in clarifying the assignment of responsibility for the collection of information about the labor market. Therefore, it is recommended that the following areas of authority be assigned to the Employment Service:

1. It should collect and analyze manpower information required for the efficient functioning of the public Employment Service and for the administration of other Federal programs dealing with manpower development and utilization. In many cases, this will mean gathering data already available from other government agencies. In other instances, the Employment Service may have to initiate the collection process itself.

2. It should be recognized as a major source for the development of information for occupational guidance, testing, and employment counseling, both for its own use in providing manpower services and for other users, public and private.

3. It should assist in efforts to strengthen community economic development activities.

4. It should be engaged in research which would facilitate manpower and labor force adjustments to automation and changing technology. To strengthen the research program, the Director of the national Employment Service should be given legislative authority to enter into contracts with universities and other institutions qualified to do research for the purposes of having them conduct specific studies related to the effective functioning of the Employment Service. Currently, he does not have such authority.

5. It should be given legislative authority to collect information from the Federal Government on job openings in governmental agencies and Government corporations.

6. It should also work closely with employers, especially Government contractors, to obtain specific information on job openings and their characteristics and to obtain advance notice of mass layoffs in order to facilitate workers' job adjustments.

7. It should make better use of the considerable data concerning job openings now available as a result of the normal operations of the Employment Service network. In the course of its placement activities, each local office compiles a current list of unfilled openings with respect to specific occupations and industrial sectors. To utilize this potentially valuable source of labor market information, each local office should forward a monthly statement and analysis of its unfilled job openings to the USES. The USES could then compile and periodically publish an analysis of these data as another indicator of the composition of the demand for labor. We recognize that these data do not lend themselves to the estimation of a national aggregate figure on job vacancies and they should not be misused for this purpose.

DISSEMINATION OF INFORMATION

When adequate labor market information is collected and analyzed, vigorous measures must be adopted to insure that it is widely disseminated in meaningful form to other public and private organizations with an interest in labor market trends. These organizations include schools, employers, unions, voluntary agencies, private employment agencies, and the Employment Service itself. Unfortunately, however, much of the information currently available has not been in a form that is usable by other organizations, and only limited arrangements have been made to communicate this information on a regular basis. 1. Designation of labor market information officers.-To remedy this deficiency, each metropolitan local office should have a staff member who will be designated as the labor market information officer (LMIO). Additional staff personnel should be provided as appropriate for local offices which serve large metropolitan areas, while the functions of the LMIO may be assigned as a collateral duty to the staff of an office in a smaller community or provided on an area basis.

2. Functions of the labor market information officer.-The principal duty of the LMIO should be to communicate on a regular basis with schools, employers, union, nonprofit organizations, private employment agencies, and other groups as appropriate, and to maintain the close contact with these organizations that will help develop quality manpower services. In the course of these communications, the LMIO can discuss with the organizations' representatives the relevant labor market information that is available through the Employment Service. At the same time, the LMIO should solicit suggestions concerning needed information that is not presently available and the best method for preparing the information so that it will have maximum utility for the user.

3. Benefits from the use of labor market information officers.-This approach would have several constructive consequences. First, it will promote a comprehensive flow of information from the Employment Service to the users. Second, the quality of the information can be improved through the suggestions of other organizations that have special requirements in the labor market. And third, the use of a labor market information officer would build better relationships between the Employment Service and other groups and help to create a positive "image" with the public at large.

4. Information at work: The need for effective counseling.—Comprehensive and current job market information, readily available, is essential for an effective counseling program. Knowledge about the contents of, and trends in,

occupations and industries in geographic areas is basic for reaching decisions for vocation choice, manpower training, or other related actions. The counselor has a key role in the translation of this information to effective actions. It is therefore imperative that Employment Service counselors develop a sound background and working knowledge of the various types of information necessary to provide guidance to jobseekers.

THE INTERAREA RECRUITMENT PROCEDURE

In order to retain its effectiveness, the public Employment Service must adjust the distribution and use of labor market information in its internal operations to the changing structure of the national labor market. In this respect, the increased importance of professional and skilled workers, the improvement of means of transportation, and the shift of industry have all served to expand the geographical scope of the labor market. Although the local labor market is still the primary unit for the matching of supply and demand, the market for many professional and technical occupations is now regional or national in scope.

In this manner, job openings in one area may be filled only by drawing on applicants with the necessary qualifications who currently reside in other sections of the country. The magnitude of the problem is indicated by a special survey carried out in July 1964, which revealed that the public Employment Service offices had 250,000 unfilled openings of which 45,000 were for professional and managerial jobs and 35,000 for other skilled classifications. A majority of these openings had remained unfilled for 15 days or more. To function effectively in these markets, the Employment Service must develop modern techniques for the communication of this labor market information among its operating units.

EXISTING INTERAREA RECRUITMENT PROCEDURES

To facilitate the matching of applicants and job openings among local labor markets the Employment Service has developed an interarea clearance procedure. However, this procedure is cumbersome and generally ineffective. As presently organized, it depends upon the initiative of the local office manager, who list unfilled jobs with a State clearance office. The State clearance officer then compiles the vacancies on a periodic basis and distributes this information to other State offices. Many of the local office managers are slow or reluctant to incorporate job openings into the interarea procedures, and even when the positions are listed, they are often "stale" by the time the information reaches other local offices. In addition, there is no parallel procedure for the listing of applicants who might be willing to move to take a new job.

RECOMMENDATIONS FOR AN IMPROVED INTERAREA RECRUITMENT PROCEDURE

In order to improve the operation of the interarea clearance procedure and the flow of information across local labor markets, the following steps should be taken:

1. Establishment of multimarket recruitment centers.-Multimarket clearance centers should be established throughout the public Employment Service system, and the centers themselves coordinated on a national basis. The exact number and location of these offices can be determined after an initial study and pilot project. In some cases, the boundaries of the regional interarea clearance office will include more than one administrative region of the Bureau of Employment Security, as presently constituted.

2. Listings with multimarket recruitment centers. Each local office shall be required to list with the multimarket recruitment office all job vacancies in shortage occupations, as currently illustrated in the professional, technical, and managerial classification. This listing should be made after the opening has remained unfilled 15 days from the date it was listed with the local office. Initially, the new recruitment procedure should be limited to these classifications, since the existence of regional and national labor markets is most evident in these occupations.

Also, the local office shall be required to list with the multimarket requirement office the names of all applicants with professional, technical, and managerial qualifications who have remained unemployed for 30 days or more. In addition, any other applicants with skills and experience in these occupational areas may, at their own initiative, avail themselves of this procedure.

3. Functions of the multimarket centers. The information on job openings and applicants supplied to the regional recruitment center can then be used to promote placement across local labor markets. In some cases, a local office may contact the regional center to determine if applicants are available for unfilled job openings in the local labor market. In other cases, the regional center on its own initiative, will notify the local office of the possible availability of qualified applicants in other areas or labor markets. At the same time, the regional center will inform the local office servicing the applicant of the availability of the job. The administrative responsibility for bringing the prospective employer and the applicant together within the framework of the multimarket recruitment procedure shall then be assumed by the local offices. The employer and the applicant can carry out the usual screening and interviewing procedures at their own discretion.

4. Use of information technology.-In order to develop an effective interarea recruitment procedure, it is necessary to have rapid and accurate methods for storing, analyzing, and retrieving information concerning job vacancies and potential applicants on a current basis. Further advances in automatic data processing and computer technology in the organization and operation of the interarea recruitment procedure should be given high priority by the Employ ment Service. Some exploratory efforts have already been undertaken, but they should be expedited within the framework of the new interarea recruitment procedures.

We recommend that the Secretary of Labor appoint a committee to study and suggest the best automatic data processing and computer approaches to handling this problem. The committee should consist of academic experts on electronic data processing and computer technology, Employment Service, business, and labor representatives. This committee should decide on a regional trial application, to be thoroughly tested and operated, before establishing an elaborate system. The existing LINCS system of the Employment Service provides a basic unit from which to start.

ADMINISTERING AND FINANCING THE SERVICE

In addition to changes in concept, personnel policies, and the use of labor market information, several other administrative aspects of the Employment Service have been examined which are important to the maintenance of an effective Employment Service. These include the budget process and financing, emergency planning, the establishment of an advisory and review committee. and related matters.

THE BUDGET PROCESS AND FINANCING

1. Importance of budgetary controls.—The process of making and carrying through a plan of operation and a financial budget plays a central part in the administration of any well run organization. This process involves thorough discussion among units as various levels in the organization so that general policies and local needs can be coordinated. It forces each administrative unit to develop objectives for the immediate future and to make these a part of plans for a longer time horizon. While putting emphasis on program objectives, it makes necessary the evaluation of these objectives in terms of the resources needed to achieve them and asks continually such questions as "How do the costs compare with the benefits of this undertaking?” “How central to other activities is the one under review?" "Are there ways to accomplish this aim in a more economical manner?" "What priorities should be established among objectives?”

The careful composition of budgets in the first instance is thus a constructive process. At the same time, it provides deeper and richer material for use by a reviewing group, such as the Congress, for purposes both of initial judgment about a proposed budget and of later examination on how well the estimates of various cost-benefit relationships have held up. In this manner, the budget process can be a continual source of planning and evaluation so essential to effective administration.

2. Inadequacies of the existing budget process.-The Employment Service has been moving, though gradually, toward a more effective budget process. In many of the States, however, this process has been the prisoner of relatively routine rules of thumb involving the counting of referrals and of estimating budget needs on a cost-per-referral basis. This approach is obsolete, as is recognized in policy at the national level. Placements, not referrals, are the central objective. Effective

lacement activities in the short run result from effective programs that must e worked out on a longer term basis, and which are interrelated to the central »bjective. The quality of the labor market and job information, counseling, and nterarea recruitment services and the relationship between employment opporunities and educational and training activities in the community all affect placement activities.

3. A new approach required.-The budget process should emphasize the prorams to be undertaken, nationally, regionally, in the States, and at the local evel. It should call for analysis of problems impeding full implementation of these programs and for remedial steps to correct them. It should involve a thorough reconciliation of local needs and general objectives. It should include careful and systematic methods of evaluation and review, so that the organization may learn from experience and continually improve its effectiveness.

We recommend that the budget process and its improvement be made a matter of first priority by the Employment Service and that its organization and arrangements for planning, review, and budgeting be made an important and well staffed part of the Director's office at the national and State levels.

4. Financing the Service. The close relationship between the Employment Service and unemployment insurance has created certain limitations on the supporting financial arrangements. A basic deficiency is that the present reliance on financing through the Federal Unemployment Tax does not reflect the much broader functions and responsibilities that have been assigned to the Employment Service in recent years. This has meant that the availability of funds has not been directly responsive to the changing requirements of the Employment Service. Serious questions are also raised by the fact that a tax levied on employers' payrolls to finance the system of unemployment insurance is used to support other and broader activities as well.

Separate financial arrangements should be made for the administration of unemployment insurance and the manpower functions of the Employment Service. Currently, the Federal Unemployment Tax on employers' payrolls is the exclusive source of funds for the Employment Service, except for a few special appropriations made by Congress. An approximate estimate can be made of the cost of administering the work test aspects of unemployment insurance through the Employment Service. This cost should then be defrayed from the Federal Unemployment Tax Fund. The appropriations for the other manpower functions of the Employment Service should be financed from general tax revenues, as determined by Congress. By adopting this approach, Congress would be in a better position to determine the needs of the Employment Service and to evaluate the efficiency of its operations in the manpower field on a regular basis.

EMERGENCY PLANNING

In addition to establishing effective procedures for carrying out normal, day-today operations, the Employment Service should take the necessary steps to develop plans and techniques for handling emergency situations in the labor market. Unemployment resulting from large-scale layoffs, such as those arising from the cancellation of defense contracts or plant closings, and pockets of chronic unemployment may generate urgent problems for the community that cannot be dealt with by conventional programs. It would be preferable, of course, if the Employment Service had advance warning of impending emergencies in the labor market. Some measures have been taken to develop an "early warning system" for plant closings and related events, and we have earlier recommended additional effort in this direction; but perfect foresight cannot be expected of any agency, especially when its relationships with outside groups are on a voluntary basis.

RECOMMENDATIONS FOR EFFECTIVE EMERGENCY PLANNING

Consequently, the Employment Service should engage in systematic emergency planning as part of its on-going organization responsibilities. Such planning can be facilitated by the following steps:

1. Establishment of an emergency planning unit.-A unit should be established within the U.S. Employment Service with primary responsibility for emergency planning within the Employment Service system. This unit would collect and evaluate information concerning the possible occurrence of emergency situations in the labor market, develop prototype plans for handling different kinds of