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This Issue in Brief

REPORTING on a recent visit to Sweden, Sol Swerdloff says that Sweden's "active manpower policy," long a part of the country's economic program, heavily engages various government agencies in jobseeking, mobility, retraining, and stabilizing seasonal swings. The article (Sweden's Manpower Programs, p. 1) notes that the active manpower policy rests upon general efforts to achieve "a rapid rate of expansion of the economy, a rising standard of living, full employment, and stable money."

"WHAT DOES UNEMPLOYMENT MEAN in terms of financial hardship? How strong is the unemployed person's need to work, and how strong is his attachment to the labor force? How does the individual worker respond to the predicament of losing a job?" These and similar questions are answered in A Portrait of the Unemployed by Carol B. Kalish (p. 7). The article is based primarily on an April 1963 study of the unemployed. Two of the major conclusions are: "Wide diversity of the condition of the unemployed;" and "most [of the unemployed] lack adequate education and training, which limits them to occupations and industries where the incidence of unemployment is high."

"THERE is no sign of the resurgence of anarchism in its historic sense as a social movement. However, there evidently is some revival of interest in anarchism as a body of ideas," says H. M. Douty in The Word and the Deed-Anarchism Revisited (p. 15), an evaluative essay on two recent books by English scholars. Having failed to prove its worth as a social and political force, probably beyond any possibility of revival, anarchism today, he contends, does have significance for the ideas it has generated. "We can forget," he says, "chimerical visions of society without authority, but the central issue of the place of man in the social order continues to be with us."

CIVIL WAR SOLDIERS were engaged almost exclu

sively in strictly military tasks of a relatively simple nature, and civilians performed most of the administrative and service functions for the Armed Forces. By 1960, however, the enlisted force comprised "a heterogeneous array of specialties requiring a wide diversity of skills, aptitudes, and educational backgrounds," with only a small proportion of "enlisted jobs" left for civilians to do, says Harold Wool, in Military and Civilian Occupational Structure (p. 29). The change in both military and civilian labor forces during the century has been wrought by rapid advances in science and technology. The author concludes that reduction in size of nonspecialized groups, great expansion in white- and blue-collar occupations, and a sharp rise in the character of the needs for labor have been among the foremost developments affecting both forces.

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RISING COSTS of research and development work pose a question: Are the rises attributable to price changes or to increases in real input into R&D processes? To find out "whether data could be collected and methodology devised to compile a satisfactory index of change in the purchasing power of [Government] R&D funds," BLS has conducted a pilot study of 23 Army laboratories and 23 private laboratories under contract to the Government. The findings, summarized by Allan D. Searle in a technical note on Research and Development Price Indexes (p. 57), argue that "given sufficient resources and cooperation of reporters," a reliable index of R&D cost prices as well as a price trend index could be constructed.

The Labor Month in Review

The Decision to Retire:

A Canvass of Possibilities

A range of choice is open to a worker in selecting the timing and conditions of his retirement. The public pension system, particularly when combined with private pensions, provides a basis for decision. The extent of coverage and of benefits available within the public-private pension framework makes voluntary withdrawal from the labor force an attractive possibility for some workers and at least an alternative to full-time employment for many workers. On the other hand, policies requiring retirement at a specific age, and restricted job opportunities for unemployed older workers impel withdrawal from the labor force. Such factors as service requirements for pension benefits and the reduction of benefits for early retirement narrow the scope of choice. Finally, there is evidence to indicate that the possibility of employment after retirement (usually on a parttime basis) plays a role of some importance in decisionmaking.

The social security system, the base on which most private pension benefits are constructed, covers 65.4 million workers, 91.2 percent of all those in paid employment.

A single worker age 65 whose annual earnings after 1950 average $4,800 or more will receive maximum monthly benefits of $135.90, and a married worker whose wife is 65, maximum total payments of $203.90. (The rise in the maximum earnings base from $4,800 to $6,600, beginning in 1966, will raise benefits for workers earning more than $4,800 who retire in 1967 or later.)

The Social Security Administration estimates that roughly 24.6 million workers, about half the number now employed in private nonfarm establishments, are covered by private retirement programs, including profit sharing plans. Just about all of these workers are also covered by OASDI. Eligibility for private pensions and benefit levels are usually determined by formulas based on years of credited service or earnings, or both. Definitions of these factors vary. Service require

ments typically are set at a 15-year minimum for retirement at the age of 65.

On the basis of median normal retirement benefits, as estimated in a BLS study, a 65-year-old worker earning $4,800, with a 65-year-old wife, may expect to receive about $245 a month after 15 years' credited service, and just under $260 a month after 20 years. Both averages include current maximum social security benefits.

A survey of the retirement planning of 1,853 families (with heads age 35 to 64), offers some indication of the relative importance of social security and other forms of retirement income. (Reported in George Katona's Private Pensions and Individual Saving, published by the Institute for Social Research, University of Michigan.) Most of these families foresaw no financial problems: Their confidence was based primarily on the expectation of social security or private benefits. Apparently, social security alone would satisfy the requirements of close to 27 percent of the group, including nearly half the families with current income from $3,000 to $5,999, nearly one-quarter of the $6,000-to-$9,999 income group, and onetenth of those with incomes of $10,000 and over.

Nearly all of those studied were covered by social security, or railroad retirement, or government pensions, but less than half participated in private pension plans. The participation rate was lowest in the $3,000-to-$5,999 income group, rising to about one-half for those currently earning over $6,000. Among those who could estimate the amounts of their private pensions (60 percent of those covered by private plans), most of the $3,000-to-$9,999 income group expected a pension amounting to less than $150 a month.

For those who expected relatively low retirement income, the gap between needs and pension benefits would be filled principally by post-retirement earnings. One-half of the survey group planned to supplement their benefits by part-time work or self-employment. About one-third of the group expected some income from life insurance, annuities, or similar sources.

Although opportunities to retire early have been increasing and workers have been retiring early in increasing numbers-the element of personal choice is affected, first, by such considerations as layoffs and ill health, and second, by the prospect of permanently reduced benefits. Half the men who were awarded social security benefits in 1964

retired before 65, and, by the end of that year, over a million men on the rolls were receiving permanently reduced benefits because they had retired at ages from 62 to 65.

It might be assumed that a considerable number of these younger social security beneficiaries made voluntary decisions based on high expectations. The Social Security Administration's 1963 Survey of the Aged showed the contrary. Nearly threefourths of beneficiaries age 62-64 retired involuntarily, because of poor health or because they had been laid off-compared with less than half of the beneficiaries 65 and over. Twenty percent of the younger group were drawing disability benefits, as permanently and totally disabled; an additional 40 percent reported they were not well enough to work. The latter group probably included a number who were unable to find jobs, but preferred to report ill health.

The survey also showed that "the median income of male beneficiaries age 62-64 was not even half that of nonbeneficiaries of the same age [and] ... less than half that of beneficiaries age 65-72." The effect of reduced benefits is compounded (as indicated in other studies) by preretirement earnings considerably lower, on the average, than those of workers retiring at 65. The younger group was also more likely to have had a decline in earnings from their peak working year to the latest year, and a substantial number of them had no earnings in the year before entitlement.

In contrast, the automobile workers' contracts have offered increasingly favorable terms for early retirement. The 1964 agreement provided for pensions up to $400 a month for eligible workers, effective September 1, 1965. At the end of 1964, UAW actuaries estimated that about 34,000 production workers age 60 through 64 had the minimum 10-year service requirement. During September and October 1965, 7,868 workers in this age group, about 23 percent of those eligible, elected to retire early. The majority of those eligible postponed retirement, temporarily, or for a longer period. Possible factors in temporary deferment included high overtime earnings, and provisions in certain contracts which based ac

crued vacation pay on yearend earnings trend: Over the long range, there is a definite incentiv to work until 30 years of service have accumu lated. Also, owing to the shift in the social se curity earnings base, some workers would find i advantageous to continue employment until thei earnings had exceeded $4,800.

The interplay of personal and economic factor in these decisions will be assessed in a planne UAW survey.

An increasing number of negotiated early retire ment plans reduce the age at which "normal" re tirement benefits are available, or supplemen retirement income until OASDI benefits are pay able, or do both. (Some of these plans apply only to involuntary early retirement.) Yet, most em ployees in private industry planning early retire ment face the prospect of reduced benefits. Typi cally, benefits at 60 are about two-thirds of thos payable at 65 for equivalent service, and at 55, they are less than one-half.

Thus, a considerable number contemplating early retirement under these circumstances are likely to want employment. The expectation of earnings from employment after retirement at the age of 65 was shown in the Katona study. It was also evident in the experience of a group of Federal employees who elected to retire between the ages of 55 and 60, at slightly less than full benefits. More than half of them planned to work after retirement, and more than half of them did-usually part time.

According to a report by the Senate Special Committee on Aging, a large percentage of persons 65 and over is working part time, "out of preference." One reason given for this preference is that they can supplement retirement benefits without reducing them substantially. At the present time, social security beneficiaries between the ages of 62 and 72 may earn up to $1,500 before benefits are reduced.

Whether out of necessity or choice, one-third of the aggregate income of Americans over 65 is based on earnings. Under these circumstances, the very definition of retirement encompasses a gradual and flexible withdrawal from the labor force.

Sweden's Manpower Programs

An Active Manpower Program Supplements Monetary and Fiscal Policies in Providing Full Employment

SOL SWERDLOFF*

IN SWEDEN, manpower policy is part of a broad program aimed at such general economic objectives as a rapid rate of expansion of the economy, a rising standard of living, full employment, and stable money. The Swedish Government felt that these goals could not be attained by general fiscal, monetary, and trade policies alone and therefore initiated what is referred to as an "active manpower policy."

Shifts in the Economy

Programs to meet the problems of structural shifts in the economy include measures to influence geographic mobility of labor and industry, to induce workers to move to labor shortage areas, and to create jobs where there is a surplus of workers. There are also programs to retrain workers whose skills become obsolete because of technological developments and to assist in an orderly labor market adjustment by persons losing jobs because of layoffs.

Retraining Programs. Manpower planners in Sweden have concluded that training and retraining are essential if manpower adjustments are to be made in the face of rapid technological change. In the last few years, Sweden has increased its retraining capacity and is now retraining about 1 percent of the labor force or about 35,000 to 40,000 persons a year. Retraining levels are expected to remain from 1 to 2 percent in the forseeable future.

Retraining is limited to persons unemployed or in danger of being unemployed because the indus

try or occupation in which they are working is declining in their particular area. Consideration is now being given to offering retraining to employed persons in order to help the individual obtain a higher job level and to increase the skills of the Nation's work force.

Retraining is the responsibility of the county labor boards (Employment Service) and is carried out in cooperation with the Central Board of Vocational Training. Some courses given by employers are subsidized by the national tripartite Labor Market Board. The length of these courses varies from a few months to about 20 months, and training is given in about 100 occupations.

Retraining is often combined with relocation and is concentrated in areas of unemployment. Records indicate that about 80 percent of those trained immediately received jobs in the occupation for which they are trained.

Trainees receive an allowance of about $80 a month. They also receive family allowances for wife and children, and a rental allowance. Total allowances may amount to two-thirds of the income of an employed worker, and it is possible for a trainee to receive $200 a month for up to 2 years. All allowances are tax free.

Mobility Promotion. Despite relatively full employment in the country as a whole during the last decade, decreases in employment in forestry and agriculture have resulted in a manpower surplus and high unemployment in some areas of

*Chief, Division of Manpower and Occupational Outlook, Bureau of Labor Statistics. Mr. Swerdloff worked with the Swedish Labor Market Board for 10 weeks during the spring of 1965 on a Labor Department exchange program.

Sweden. At the same time there have been shortages of labor in other parts of the country.

Sweden has established a program to assist unemployed people in depressed areas to move to the areas of manpower shortages and to train the unemployed in the skills which are marketable in the new areas. Financial assistance in the form of payment of travel and moving expenses, family allowances, starting allowances, and special settlement allowances to induce people to move out of pockets of unemployment are also part of the general policy.

An unemployed person, or one who is employed in an industry or firm where employment is likely to decline, is informed of job opportunities in other areas by the Employment Service. Often, an Employment Service official from a labor shortage area goes into a labor surplus area to describe job opportunities, housing facilities, etc., to the potential movers.

A worker and his wife can be given travel expenses so that they might go to a new area to look at or find a job, obtain housing, etc., and then return home. The worker may only wish to look over the situation and is not obliged to accept employment. When a family moves, the Labor Market Board pays expenses for personal transportation and the cost of packing, handling, and moving furniture and other personal belongings.

When a worker moves to a new area and a new job but is unable to take his family along immediately, a family allowance is paid by the Labor Market Board. This allowance, granted because the worker has the expense of maintaining two separate households, may reach a maximum of 200 crowns ($40) for the wife, and 45 crowns ($9) per child a month (maximum 9 months). It cannot be more than the actual rent or housing expenses, and is paid directly to the family at home rather than to the worker at his new location.

Transferred workers are paid "starting allowances" in order to tide them over until they receive their first pay check. The amount varies depending on whether the job is temporary or permanent, but the maximum amount is 500 crowns (nearly $100).

In addition to the allowances previously mentioned, there is a "settlement grant" of 2,000 crowns (nearly $400) which is designed to stimulate transfers from "pockets of unemployment." These

grants are provided to persons in areas of th five northernmost counties (where unemploymen rates are the highest) if the persons relocate t other parts of the country acceptable to the Labo Market Board.

There is an obligation for repayment if the per son does not stay at his new location. In the cas of starting allowances, if a person does not worl a hundred days at his new job, he must pay crowns for each day less than a hundred no worked. If he moves to another job and the Labor Market Board accepts this move, repayment wil not have to be made. A person does not have to repay travel expenses or family expenses incurred during a temporary move.

Housing. One of the major obstacles to the geo graphic mobility of workers is the housing shortage. Emergency funds have been used by communities and the Labor Board to build houses for new workers and their families or households for single persons. In certain areas, communities are given extra building loan credits (90-95 percent of all dwellings are built with State loans) on condition that they provide a corresponding number of dwellings to transferred workers. Such workers are sometimes given priorities on the waiting list for new houses; this is especially true in the case of construction workers who build more housing.

A particular problem faces the worker who owns a home and is considering relocation. In a labor surplus area, it is difficult to sell a home and prices tend to be low. The Labor Market Board has recently attempted to help the relocating worker to sell his home or has actually purchased the home from the worker.

Industrial Location. Stimulating mobility is one means of attacking the problem of surplus labor in certain parts of the country and labor shortages in others. Another way of meeting the problem is an active industry relocation policy aimed at creating jobs in areas where a surplus of labor exists, where one firm or one industry dominates a community, or where female labor force participation is low.

One of the programs under this policy is the provision of information to firms concerning availability of labor, industrial buildings, etc. This is carried out by the Employment Service in coopera

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