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determine not only whether we can reduce the number of telephone instruments but also the volume of long-distance calls.

The volume of long-distance calls has increased particularly in the training programs and the domestic farm programs. Most of the action in these areas is in local communities and we have had to resort to long-distance calls in order to obtain information quickly.

MANDATORY PAY INCREASE COSTS

Attached is a table which shows by bureau the costs for 1966 and 1967 and the amounts we are absorbing. We are proposing, in a supplemental for 1966, that the cost in 1966 of $948,900 be met by surplus funds in the account which provides resources to pay unemployment insurance benefits to Federal employees and ex-servicemen. These costs for 1966 and 1967 are based upon a position-by-position analysis and represent our best judgment.

(See pp. 148-149.)

These are mandatory costs too, and the attached table reflects the need and the extent of absorption which we believe can be achieved for each account. Costs have been computed only after analysis of each position in terms of when each promotion will fall due and what savings we think may be achieved as a result of employee turnover in the form of lapses.

(See p. 150.)

NEW CHARGES TO THE UNEMPLOYMENT TRUST FUND

$230,300

We are proposing that the costs of the following activities be financed out of the trust funds rather than out of general funds: Public Law 88-582-Farm labor contractors registration__. Public Law 414-Amendments for "Activities Relating to Admission and Employment in Agriculture of Nonimmigrant Aliens"Public Law 414-Permanent immigration-amendments to the Immigration and Nationality Act

Public Law 88-352-Section VI of the Civil Rights Act of 1964-----

986, 400

1,971, 000

212, 000

The reason for this proposal is that the functions will be primarily performed by the Bureau of Employment Security and the State employment security agencies as a part of their normal function of (a) assuring maximum employment of our domestic work force before authorizing use of foreign skills, (b) assuring that discriminatory hiring practices are eliminated, and (c) that safe working conditions (and transportation) are afforded domestic agricultural workers. A rationale for the proposal is in attachment 8.

(See p. 151.)

COMPTROLLER GENERAL REPORTS TO CONGRESS

I welcome independent appraisal of our operations. Some of the GAO reports reflect, however, an interpretation of legislative intent and conclusions of policy different from my own. There is attached a brief summary of these reports and our specific position on each of them.

(See p. 153.)

COMPARISON OF OFFICE-BUREAU ESTIMATES--THE DEPARTMENT OF LABOR ESTIMATE AND THE PRESIDENT'S ALLOWANCE

There is attached, as requested, a table (attachment 10) which compares what was requested by the bureaus and offices, what I approved for consideration by the Bureau of the Budget, and the final budget action.

(See p. 156.)

The Federal Employees Salary Act of 1965 (Public Law 89-301) requires that, to the maximum extent practicable, travel on official business be accomplished during the regularly scheduled workweek. In essence this means that the intent of Congress is to limit travel of employees to regular duty hours and to avoid travel on Saturdays, Sundays and holidays and at night. This could have a material impact on the productivity efforts in such programs as the enforcement of the FLSA, safety investigations and other investigation programs of the Department. I certainly agree with the intent of Congress but I suspect that over the years there has been considerable travel performed during off-duty hours in order to achieve the maximum of time to perform official duties. We are making a study of this problem in the Department in order to estimate the loss of productive worktime involved, its impact on various programs and the need, if any, for future budgetary adjustments.

PROGRAM PROPOSED FOR 1967

At this point I would like to summarize our program proposals

for 1967.

MANPOWER DEVELOPMENT AND TRAINING ACTIVITIES

The appropriation estimate for MDTA for 1967 is at essentially the same dollar level that it is for the current year, roughly $400 million. The program projected for 1967, however, reflects a change in program emphasis or direction. As the overall rate of unemployment has declined, we find that there still persists a stubbornly high rate of unemployment among young workers, the uneducated and minority groups. The major thrust of the program for 1967, therefore, will be directed toward the hardcore unemployed with an emphasis upon a person-oriented approach.

The person-oriented approach starts with the individual unemployed worker, assesses his needs and attempts to fit MDTA training to his particular potential. Under this approach, the Employment Service will search out unemployed workers, provide intensive counseling and testing services and structure training programs to meet individual needs. The emphasis on the indidivual hard-core unemployed worker will require that additional funds be made available to the State employment security agencies and the 1967 budget provides approximately $16.9 million additional for employment services. While the major emphasis of the 1967 program will be directed to the disadvantaged approximately 65 percent of the program, recog nition is also to be given to meeting the problem of the emergence of selective skill shortages which accompany declining unemployment. Roughly 35 percent of the program will be directed toward this area with increased emphasis on the on-the-job training program. In total the 1967 program is estimated to provide training for 250,000 trainees-125,000 in institutional projects and 125,00 in OJT projects.

OFFICE OF THE MANPOWER ADMINISTRATOR

For this appropriation we are requesting an increase of $2,790,000 in the title I manpower research grant program. The increased funds will be used to support manpower research which may lead to new fields of inquiry. In addition, the additional research funds requested will be used to expand the program of manpower research institutional grants designed to encourage universities and colleges to develop manpower research programs and research training activities. Additional funds and positions are also requested to provide for the administration of the expanded research program, the analysis and evaluation of manpower programs, and the improved inanagement and utilization of manpower funds and programs. Mr. Ruttenberg will speak in detail of these requests.

CIVIL RIGHTS

The Department is also requesting for 1967 a total of 34 positions and $527,700 to assure compliance with title VI of the 1964 Civil Rights Act from all recipients of Federal funds through the Department of Labor. This request is made both as a result of an increase in the number of complaints of discrimination made to the Department-the number is estimated to be nearly 600 in 1967 as compared to 130 in the last 6 months of calendar year 1965-and as a result of a redirection of the compliance assurance activities of the Department to insure complete program compliance with the law through an intensive program of onsite investigation of facilities which receive funds to provide services to the public.

I believe these positions are very necessary if we are to carry out both the spirit and the letter of the law to provide all Americans regardless of their race, or their creed, or their national origin-with the services and assistance to be provided by the Department of Labor.

BUREAU OF APPRENTICESHIP AND TRAINING

The Department's request includes an increase of 80 positions and $1,323,000 for the Bureau of Apprenticeship and Training to support expansion in both programs-apprenticeship and MDTA-OJT. With demand for skilled workers rising, it is expected that an intensified Bureau program will result in an increase from 234.000 apprentices receiving training in 1966 to 247,000 in 1967. MDTA on-the-job training is expected to move up to 125,000 trainees in 1967 from the 70,000 level expected in 1966.

BUREAU OF EMPLOYMENT SECURITY AND STATE EMPLOYMENT

SECURITY AGENCIES

During fiscal year 1967 we propose to continue to expand and improve the administration of the employment security program, with special emphasis on meeting the special problems of youth, minority groups, and older worker unemployment, immigration and the beginning of an operational skill shortages information program. State employment security agencies will continue to place emphasis on serving youth and older workers in 1967. The youth program will reach a $75 million level and improvements in the older worker program coupled with an operational skill shortages information program will

insure further progress toward an effective nationwide manpower policy.

Unemployment benefits to Federal workers and to ex-servicemen are estimated at $108.7 million for 1966, the lowest since fiscal year 1957. For fiscal year 1967 we are asking for the same amount.

LABOR-MANAGEMENT RELATIONS

We continue to find, in the administration of the two reporting and disclosure laws, that most unions, are well and responsibly administered. However, as in the past, it develops that in a number of situations there is a failure to meet the statutory standards.

In a period in which the present Vietnam crisis is so much in mind the Labor Department is particularly proud of the services made available to returning servicemen. Through continuing internal improvements, our veterans reemployment program has been made more effective and extensive than at any time in the past-yet internal improvements in the past year have permitted the reduction of staff in this area from 69 to 54 employees.

There were several unusually serious labor disputes in 1965, with longshore, maritime, steel, aerospace, newspapers and defense industries receiving special attention. Working time lost through strikes in 1965 was about the same as in 1964-about 18 days were lost for every 10,000 man-days worked. Yet we cannot be sanguine about those few, but critical, work stoppages which seriously affect the national interest. President Johnson expressed his concern over this matter in his state of the Union message.

WAGE AND HOUR AND PUBLIC CONTRACTS DIVISIONS

The programs continue to provide substantial help to the people at the low end of the wage scale. The 1961 amendments to the Fair Labor Standards Act provided for an extension of coverage to employees of large retail and service establishments and other firms. Effective September 3, 1965, the minimum wage for these employees was increased from $1.15 to $1.25 and at the same time they became entitled to overtime pay after 40 hours in a workweek.

Under the McNamara-O'Hara Service Contract Act of 1965, standards will be established for employees of contractors furnishing services or performing maintenance service for Federal agencies. Covered employees working on service contracts of $2,500 or more must be paid wage rates, including fringe benefits determined to be prevailing in the locality or at least $1.25 an hour if no determination has been made. Additionally, the act requires that the service or maintenance work be performed under safe and sanitary working conditions. The funds requested for this program include $350,000 in 1966 and $1,100,000 in 1967 for carrying out the responsibilities imposed by the Service Contract Act.

BUREAU OF LABOR STANDARDS

The Bureau of Labor Standards will continue its program of promoting improved State labor legislation and reduction in industrial accidents, with emphasis given to encouraging Federal agencies to intensify their efforts to achieve the goal of the President's Mission

Safety 70 program--reduction of accidents and their costs 30 percent by 1970.

WOMEN'S BUREAU

The Women's Bureau has responded to a rapidly increasing demand for services growing out of the establishment of 45 State Governors' Commissions on the Status of Women. To help meet this need other bureaus of the Department are supplying basic research data to the Women's Bureau. While we can take great satisfaction in the recent advances in the position of women in our society and in the achievement of which the Women's Bureau has played an indispensable part, there is still clear evidence of underutilization of women's skills in the labor force and of remaining inequities which require intensified and specialized services which the Bureau is uniquely able to provide.

BUREAU OF EMPLOYEES' COMPENSATION

The Bureau of Employees' Compensation has to meet an increased workload. The direct appropriation for the compensation fund has been decreased by over $4 million due to an increase of almost $6 million in the reimbursement to this fund from other Government establishments, under the "chargeback" plan.

BUREAU OF LABOR STATISTICS

In the vital area of employment, emerging concern with the question of labor shortages in selected occupations, industries, and areas points to the need for systematic information on the job market for various categories of workers. Accordingly, I am proposing funds to initiate a program of research studies and to expand the occupational statistics program. Resources are also needed, and are proposed, for special analyses relating to problems of young people, minority groups and others who still suffer unemployment and underemployment in the face of general prosperity.

Last year the Congress recognized the importance of standard budgets reflecting the current living costs of American families. Funds were provided for the development during fiscal 1966 of the quantities of goods and services required to meet specified standards of living. That work is underway. We are now requesting funds for the pricing of these budgets and the computation of their costs. Funds are also proposed for important work on the interpretation and analysis of price increases at both retail and wholesale levels. In the field of wage statistics, we are requesting funds to meet the need for additional data in three critical areas. We propose, first, to develop comprehensive statistical information on employer expenditures on fringe benefits; second, to increase the coverage of our annual salary surveys of white-collar employees, who outnumber the manual workers but are still only partially covered; and third, to explore sources of information, other than direct collection from employers, of annual earnings of workers in industry. Each of these programs will serve a variety of uses for government, labor, and business.

Finally, I hope that the committee will receive favorably our request for funds to expand our small program of productivity statistics by industry. Such information has become highly important in such

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