Year of Harvest

(Continued from page 11.)

These significant advances, however, leave unsolved many serious manpower problems. The 4-percent overall average for unemployment at year's end reflected much higher rates for teenagers (13 percent) and nonwhite workers (72 percent overall and more than 25 percent for teenagers). One out of eight of the Nation's major labor areas still had unemployment averaging over 6 percent, most of them still struggling with the problems of chronic high unemployment after years of industrial dislocation. Of the Nation's unemployed, 1 of 5 had been jobless for 15 weeks or longer; of those employed, many worked at jobs that did not yield income adequate for a decent living.

At the other end of the spectrum, the yearend unemployment rate for the most skilled and experienced workers was very low-2.3 percent for men 25 years of age and over. There was evidence too that potentially serious manpower shortages might develop in some local areas and occupations. The demands on material and manpower resources for Vietnam were beginning to add to the problems of maintaining stability of prices and costs while continuing to expand toward full employ

ment.

Of basic significance, however, was the fact that after an unprecedentedly long and accelerating expansion, the economy entered 1966 with remarkably few new distortions in economic structure, and with some old ones reduced. An imaginative and socially oriented blending of fiscal and manpower policies had permitted a free economy to achieve a 4-percent unemployment rate without the imbalances which would undermine its continuation.

The economy has now entered a relatively unfamiliar environment as it approaches full employment. Public policies as well as private imagination and initiative will receive a stiff test as we attempt to avoid inflation, to avoid imbalances of a kind that would lead to recession later, and to upgrade workers to qualify for available jobs. The record of 1965 demonstrated that expansion in the economy could be maintained without the excesses that bring recession. The objective now is to demonstrate that every member of society can benefit fairly from continued expansion-that sufficient workers with adequate skills

can be made available to fill the jobs needed to meet the Nation's domestic and international responsibilities, and that sufficient jobs will be available for those seeking them.

Perspective on Recent Growth

The employment benefits of our current prosperity are in large part traceable to the duration and total growth of the economic expansion. The vigor, i.e., the average rate of growth, of the current economic upswing as a whole has not been exceptional when compared with the other postwar expansions. The characteristic that sets the current expansion apart from the others is not its rate of growth, but its longevity. The current upswing is already far longer than those of 1958-60 and 1954-57, and now-in the first quarter of 1966-is 1 full year longer than the 16-quarter advance scored during the Korean war period. In fact, in duration and total growth, the current expansion is already the outstanding peacetime performance of the U.S. economy in over half a century of record keeping.

The gross national product was at an annual rate of $697 billion at the end of 1965, a gain of nearly $195 billion, or close to two-fifths, since the recession low point in early 1961. With only modest price rises, this represents a real gain in the total volume of output of 30 percent. The current advance in total volume of output is already much more than double the gains scored in each of the two mild upswings of the middle and late 1950's.

These 5 years of sustained and pervasive economic rise have had a profound cumulative impact on the employment picture. Employment rose from about 6634 million in early 1961 to a new peak of almost 73 million at the close of 1965. Even though the civilian labor force increased by 42 million over the same period, or by nearly a million a year on the average, the rapid growth in jobs brought unemployment down by a third.

Another distinguishing feature of the current expansion is the acceleration that has occurred in the rate of gain in both employment and output as the expansion has continued. The employment gain was much greater in 1964 than in 1963 and still greater in 1965 than in 1964. The 1965 rate of employment expansion, at more than 21⁄2 percent, was the largest since 1956.

Thus we have broken with the pattern that had eemed to be endemic in the 1950's, of expansions topping well short of full recovery and at >rogressively higher unemployment rates.

Key Role of Government Policy

The sustained expansion and the large gains in output and employment that accompanied it have not been a matter of happenstance; they reflect the aggressive application by the Federal Government of policies aimed at sustaining growth and achieving full utilization of the Nation's manpower resources and productive capacity. Many of the Government's wide range of fiscal, monetary, and manpower policies have broken new ground through the studied anticipation of impending problems and a purposeful and integrated implementation of programs to prevent them.

The Federal Government early in 1961 undertook a number of interrelated actions designed to bolster income, which helped to reverse the recession that had begun in early 1960, and started the economy on the road to expansion: Unemployment insurance benefits were temporarily extended beyond their usual duration; Social Security benefits were liberalized; other transfer payments were accelerated; and Federal purchasing and procurement were speeded up, as were highway fund disbursements. These actions contributed significantly to the ensuing sharp gain in business activity and employment, but the pace of the gain slowed markedly as 1962 progressed. There was only a moderate increase in the number of jobs during the latter half of 1962, and the unemployment rate showed no improvement after falling to 512 percent in the opening quarter. It became obvious that the economy was not growing fast enough to generate jobs for the rapidly expanding labor force, much less to reduce unemployment.

To remedy this, a number of fiscal and monetary actions were undertaken, culminating in a large personal and corporate tax cut which became effective early in 1964. This tax cut provided the stimulus to output and employment that has been a most significant factor in the continued dramatic expansion in the past 2 years.

Manpower Policy

At the same time that efforts were being made to expand demand through tax reductions, stimuli to business investment, and related policies, adoption of an active manpower policy led to complementary programs to upgrade workers' skills and improve the matching of workers and jobs. These innovational programs were recognized as a necessary supplement to fiscal and monetary policy in increasing employment and reducing unemployment and thereby contributing to the maximum economic growth consistent with price stability.

The Manpower Development and Training Act of 1962 (MDTA), the Economic Opportunity Act of 1964, and other legislation resting on the same principle have already had a profound effect in improving the employability of workers and providing trained manpower to support further growth.

Their effect was impressively evident in 1965. While the expansion of the economy, in large measure attributable to Federal fiscal and monetary policies, provided most of the additional jobs in 1965, the reduction of unemployment also reflects to a significant degree the impact of educational and training programs. In total, over 300,000 persons were enrolled at the end of 1965 in programs established under the Economic Opportunity Act. Moreover, included among the unemployed in December were more than 60,000 persons receiving training under the Manpower Development and Training Act, for future jobs.

**

How Workers Fared

The accelerated growth in economic activity in 1965 was sufficiently strong and widespread to benefit virtually all groups of American workers. The continued expansion in job opportunities brought an especially pronounced increase in the employment of new young workers and of women. It also cut unemployment rates among older workers and among adult men and women, both white and Negro, to their lowest points in a decade.

Economic and manpower forecasters had for many years been looking forward, apprehensively, to a "tidal wave" of postwar babies expected to enter the labor force and swell unemployment in 1965. The wave arrived with fully as much force as anticipated; some 550,000 teenagers entered the civilian labor force, 3 times the average increase of the preceding 4 years. They accounted for 40 percent of the labor force growth in 1965, twice as much as in 1960-64. But teenagers' employment rose so much that their unemployment rate instead of increasing, declined slightly from 14.7 to 13.6 percent. Of course, this rate of unemployment remains far above any acceptable level.

The vigorous prosperity of 1965 was the indispensable ingredient in making sufficient jobs available. But large numbers of youth were assisted directly and indirectly in getting jobs (and thereby were able to contribute to sustaining that prosperity) by a variety of manpower programs, including training and vocational education, and counseling, testing, and placement services. Antipoverty programs in particular helped provide record numbers of youths with summer jobs, especially full-time jobs.

Employment improved more for boys than for girls, with the unusually heavy increase in bluecollar jobs, where young men typically start their work careers. A relative shortage of men aged 25 to 44 also benefited the boys, who accounted for two-thirds of the additional male laborers and over one-third of the additional male operatives. In fact, such jobs represented over two-thirds of the 360,000 increase in male teenage employment in 1965. This sharp increase more than counterbalanced the continuing decline in farm employment.

Adult Men

*

The number of unemployed men declined by about 200,000 between 1964 and 1965, representing nearly half of the Nation's total decrease. But most encouraging was the substantial drop (110,000) among the men unemployed 15 weeks or longer.

One of the most significant developments in 1965

was the substantial improvement in the job situa tion for men 45 and older. Their unemployment rate dropped from 3.5 a year earlier to 2.9 percent-considerably below the rate of 1957 (3.4 percent). More importantly, their long-term unem ployment was reduced by more than a fourth. On the employment side, fully two-thirds of the quarter million increase for these men occurred among craftsmen, including nearly 100,000 men 55 to 64 years of age.

Negro men also benefited substantially from the improved economic situation in 1965. Sustained general prosperity had finally resulted in improvements for workers who typically are "the last to be hired and the first to be fired". The wide range of government economic and social measures in behalf of Negroes and other disadvantaged groups also helped.

The unemployment rate for nonwhite men 25 and over dropped sharply from 6.9 percent in 1964 to 5.4 percent in 1965, the lowest in over a decade. This drop was slightly greater than for white men (from 3.0 to 2.5 percent). Furthermore, the improvement was sharpest toward the end of 1965; between the fourth quarters of 1964 and 1965, the unemployment rate for nonwhite men was reduced by a third. In addition, a large part of their increased employment was among semiskilled operatives. Thus, developments in both employment and unemployment for Negro men were clearly favorable this past year.

Women 25 and over entered the labor force in substantial numbers in 1965, in addition to the unusually heavy influx of younger women. The labor force increase among those 25 and older (440,000) was one of the largest since 1956. Nevertheless, their unemployment rate dropped from 4.6 to 4.0 percent, about the same as in 1957.

Employment increases in 1965 among women occurred in occupations where they were already concentrated, but the increases were much larger than usual. Most of the employment gains were in clerical jobs (44 percent) but noticeable gains also occurred in the professional and kindred occupations, including nursing.

The year 1965 brought substantial improvement in the job situation for nonwhite women for the first time since early in the recovery. Unemploy

Significant Decisions in Labor Cases*

1

Representation Election. A Federal appeals court ruled that a district court had no authority to enjoin the National Labor Relations Board from counting ballots cast in a representation election by employees of a corporate subsidiary, where the latter claimed it did not participate in the election, had no proper notice of the Board's proceedings, could not test the results for itself, and would be a victim of a due process violation were its employees to be included in the new unit. The court held that a notice to the principal company was sufficient notice to both firms to satisfy due process of the Federal Constitution and the notice provision of the Labor Management Relations Act.

A union filed a petition for a representation election among certain named employees of an employer, the Vaughan company. After the election, Vaughan challenged the ballots of 24 employees, alleging that the employees were of another employer. The hearing revealed that Baker was a wholly owned subsidiary of Vaughan, located in the same building without any real indication of corporate distinction. Vaughan's correspondence referred to Baker as a division instead of a separate corporation, its election campaign was also directed at Baker's employees, and a supervisor of Baker's said he would take the Baker employees to the election. The challenged ballots were ordered to be counted. However, a Federal district court granted Baker a preliminary injunction against the counting of the ballots because, allegedly, Baker's employees had not been served with notice of the election in violation of the due process provision of the LMRA and the Federal Constitution. The union and the Board appealed.

In reversing the district court's injunction order, the appeals court held that the question of whether adequate notice had been given to Baker was for the Board to resolve; and since the Board found

that Baker was included in the preelection stipulation regarding the bargaining unit and participated in the election, Baker in fact had adequate notice. The court cited the McGahey 2 case, which held that a notice is legally fulfilled if "actually received and brought to attention and active consideration of those in responsible direction" of a corporation. "When that aim is satisfied in substantial fact, a technical procedural imperfection will not invalidate the whole proceeding," the court said there.

3

Regarding the due process claim of Baker, the court cited the Supreme Court's ruling in the Mullane case: "An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. . . . But if with due regard for the practicalities and peculiarities of the case these conditions are reasonably met, the constitutional requirements are satisfied."

The court further held that a factual determination by the Board is final, saying: "Normally, the Board's determinations and orders . . . in certification proceedings under section 9 (c) are not directly reviewable in the Federal courts. [They are] reviewable only after the dispute concerning their correctness culminates in finding by the Board that an unfair labor practice has been committed; for example, when an employer refuses to bargain... arguing that the election was held in an improper manner." Since Baker was notified of the election and participated therein, it could have moved to intervene in the proceedings under the Board's regulations, but having failed to do so, it may not now contest its grievance in the courts. "Nothing in the statute gives a choice of forum to the employer affected," the court said.

*Prepared in the U.S. Department of Labor, Office of the Solicitor. The cases covered in this article represent a selection of the significant decisions believed to be of special interest. No attempt has been made to reflect all recent judicial and administrative developments in the field of labor law or to indicate the effect of particular decisions in jurisdictions in which contrary results may be reached based upon local statutory provi sions, the existence of local precedents, or a different approach by the courts to the issue presented.

1 Potter v. Castle Construction Co. (C.A. 5, Jan. 5, 1966). 2 NLRB v. McGahey, 233 F. 2d 406 (5 Cir. 1956).

3 Mullane v. Central Hanover Tr. Co., 399 U.S. 306 (1950).