UNITED STATES EMPLOYMENT SERVICE

TUESDAY, NOVEMBER 13, 1945

UNITED STATES SENATE,

SUBCOMMITTEE OF THE COMMITTEE ON EDUCATION AND LABOR,

Washington, D. C.

The subcommittee met, pursuant to notice, at 10 a. m. in room 424-B, Senate Office Building, Senator James M. Tunnell presiding. Present: Senators Tunnell (presiding) and Ball.

Senator TUNNELL. We are starting hearings on S. 1510 and S. 1456, to provide for the return of public employment offices to State operation and to provide a national system of employment offices.

S. 1389, covering the same subject matter is out of consideration. Senator Reed does not want to press it any more.

I am submitting letters from the President of the United States addressed to Senator McKellar and Senator Murray on this legislation.

The Honorable KENNETH MCKELLAR,

United States Senate, Washington 25, D. C.

OCTOBER 29, 1945.

DEAR SENATOR MCKELLAR: There is now pending before your committee a bill, H. R. 4407, which was passed by the House of Representatives on October 19, 1945, and which would, 30 days after the date of its enactment, terminate the Federal operation of State and local public employment offices by withdrawing from the United States Employment Service currently available funds for that purpose, and require the transfer of such offices to State operation. The enactment of these provisions into law at the present time would cause incalculable damage to our national system of public employment offices and would threaten grave disruption and confusion in the operation of these offices at the very time when their most efficient services are urgently required by millions of displaced war workers and millions of discharged veterans.

I am convinced that the nature and seriousness of the problems involved in the transfer of our public employment office system from Federal to State operation and the future status of our Federal-State program for the maintenance of a national system of public employment offices require substantive legislation. The nature of H. R. 4407, as a recission measure may preclude your committee from studying and recommending the permanent and basic types of legislative action which the problems require.

I am attaching for your information a copy of a letter which I have sent to Senator Murray and Congressman Ramspeck concerning these problems and the items on which substantive legislation seems necessary. There are now pending in the Congress two bills, H. R. 4437 and S. 1510, which are designed to deal with these problems on a thorough and permanent basis. I therefore urge your committee to delete from H. R. 4407 the provisions which relate to these matters, in order that the problems of the United States Employment Service may now be considered in connection with such permanent legislative action as the Congress determines to be appropriate.

Sincerely,

(Enclosures)

HARRY S. TRUMAN.

1

The Honorable JAMES E. MURRAY,

THE WHITE HOUSE, Washington, October 29, 1945.

Chairman, Senate Committee on Education and Labor,

Washington, D. C.

DEAR SENATOR MURRAY: Since my reconversion message to the Congress, in which I discussed the problem of the status of the United States Employment Service, several proposals have been submitted to the Congress for the return of the operation of our public-employment-office system to the States. All such proposals present basic problems involving the requirements of our national reconversion program and the necessity for effecting such return in a manner which will avoid confusion and disruption during the transition period and provide a sound foundation for the future operation of the service.

With respect to national reconversion, events subsequent to the date of my message have emphasized our continuing need for a centrally operated system of public employment offices for some time to come. But apart from the needs of our national reconversion program, it is imperative that in connection with the transfer of our public employment office system to State operation, the Congress enact legislation which will assure (1) that the States are able to resume such operations on the designated date, (2) that the essential services provided by our local public employment offices will not be disrupted during their transition from Federal to State operation, and (3) that the States' operation of such offices under our Federal-State cooperative program will assure the maintenance of the types of facilities and services required under an adequate Nation-wide system of public-employment offices.

The national interest in the maintenance of an adequate Nation-wide system of public employment offices has been recognized since the enactment by the Congress of the act of June 6, 1933, known as the Wagner-Peyser Act. That national interest has been increased and emphasized by our responsibilities to veterans under the provisions of the Servicemen's Readjustment Act of 1944 and by our responsibilities to the millions of workers who are and will be unemployed as a result of our reconversion from war to peacetime pursuits. If those national interests and responsibilities are to be fulülled, the functions and standards prescribed for the operation of public employment offices under our FederalState cooperative program must assure the adequacy and efficiency of the services to be provided and the availability of those services throughout the Nation. Equally, if those national interests and responsibilities are to be fulfilled, our Federal-State cooperative program for the operation of public employment offices must make provision for the maintenance of those services in any State which is either unwilling or unable to provide the type of services required.

As you know, prior to their federalization in 1942 our State public employment office systems were operated under the provisions of the Wagner-Peyser Act, which provided for a Federal-State cooperative program in the maintenance of a Nation-wide system of public employment offices. That act provided for financing such State systems through dollar-for-dollar matching of Federal and State moneys. The enactment of the Social Security Act, and the expansion in our public employment office systems which occurred in connection with the unemployment insurance program under that act, resulted in a tremendous increase in the cost of operating our State public employment offices. By 1942, between 90 and 95 percent of the cost of operating those State systems was financed by Federal grants. The major part of those Federal moneys was granted by the Social Security Board under title III of the Social Security Act. Since virtually the total cost of the State systems was financed by the Federal Government prior to 1942, I recommend that the Congress eliminate the duplicative fiscal procedures which prevailed prior to 1942, and substitute provision for 100 percent Federal financing of our State public employment office systems through a single grant procedure. And, as I indicated above, if the national interest in our publicemployment-office systems warranted the Federal Government during the prewar period in financing virtually the total cost of such systems under State operation, our increased national interest during the current and future periods warrants the Federal Government in recognizing its obligation to provide public employment services in any State which is unable or unwilling to establish or maintain an adequate State system of public employment offices.

The transfer of our public-employment office systems from Federal to State operation also presents problems involving the trained and experienced personnel now employed in those offices, as well as the properties, records, and other

facilities now located in State and local offices of the United States Employment Service. Those problems require Federal legislation in order to effect the transfer of such personnel, properties, and facilities to the State governments without confusion or disruption in the service. I recommend that the Congress study these problems and make appropriate provision for their disposition at the time of the transfer of our public employment offices to State operation.

The enactment at the earliest practicable date of legislation providing for the matters enumerated above and such other matters as the Congress deems appropriate will provide a basis upon which both State and Federal agencies can undertake immediately the necessary steps looking to the accomplishment of the transfer of our public employment office systems from Federal to State operation in an orderly and efficient manner. More significantly, the enactment of such legislation will provide a sound basis for Federal-State cooperation in the maintenance of a postwar nationwide system of public employment offices which will meet the needs of veterans, employers, employees, and the Nation as a whole. I hope your committee and the Congress will give the foregoing problems prompt and favorable consideration.

Sincerely,

HARRY S. TRUMAN.

(S. 1510 and S. 1456 are as follows:)

[S. 1456, 79th Cong., 1st sess.]

A BILL To provide a national system of employment offices

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "United States Employment Service Act of 1945."

SEC. 2. In order to (a) promote full employment in private enterprise, (b) assist persons in the armed forces and in war production to avail themselves of civilian employment opportunities throughout the Nation, (c) enable employers to secure the best available labor, (d) promote economic opportunities for all persons, (e) minimize the necessity for the payment of unemployment insurance, relief, and assistance, (f) aid in the maximum utilization of the productive facilities and manpower of the entire Nation, and (g) make available a complete and up-to-date record of employment opportunities and available labor, there is hereby established in the Department of Labor a bureau to be known as the United States Employment Service, which shall establish and maintain a national system of public employment offices.

SEC. 3. (a) It shall be the duty of the United States Employment Service(1) to establish and develop an effective national system of employment offices for the use of employers and workers seeking employment throughout the Nation;

(2) to establish and develop all necessary facilities and services for assisting those men and women who have served in the armed forces to secure and maintain employment;

(3) to develop and maintain facilities for the placement of individuals in jobs on farms;

(4) to develop and maintain facilities for the placement of youths;

(5) to develop and maintain facilities to insure the full utilization of handicapped individuals and to cooperate with all agencies responsible for rehabilitation, training, and retraining;

(6) to establish such offices and such services, at such times and at such places, as may be necessary for the effective operation of a national system of public employment offices;

(7) to collect, furnish, and publish reports, statistics, and other information with respect to opportunities for employment; employment trends; promoting, regularizing, and stabilizing employment; minimizing unemployment; standardizing job terminology; and any other information of value in the operation of a national system of public employment offices;

(8) to cooperate with employers and employees, governmental agencies, or with any private agency or institution in making studies and reports which will throw light upon industrial trends and occupational changes and to assist employers and employees in preparing to meet changing needs;

(9) to cooperate with employers and employees, governmental agencies, or with any private agency or institution in order to encourage the develop

ment of such educational, occupational, apprenticeship, and job training as will be of value to employers, employees, and to the community;

(10) to promote maximum production and employment by making available information on existing and potential needs for a supply of labor on an area, industrial, and national basis;

(11) to assist in the development of methods of selection, referral to training, and the transference of employees;

(12) to assist in better utilization and distribution of manpower as between different areas by maintaining an effective national clearing system enabling workers in labor surplus areas to obtain employment in labor shortage areas; and

(13) to cooperate with the Social Security Board in providing such employment service facilities and such information as may be required for the administration of unemployment insurance.

SEC. 4. In carrying out the provisions of this Act, no person shall be referred to a position (a) if the position offered is vacant due directly to a strike, lockout, or other labor dispute; (b) if the wages, hours, or other conditions of the work offered are substantially less favorable to the individual than those prevailing for similar work in the locality; (c) if as a condition of being employed the individual would be required to join a company union or to resign from or refrain from joining any bona fide labor organization; (d) if the prospective employer discriminates against any employee or applicant for employment because of race, creed, color, or national origin; (e) if the position is one which does not utilize the person's highest skill until and unless every reasonable effort has been made to place him in a position that does utilize his highest skill.

SEC. 5. The Secretary of Labor shall enter into an agreement with a State agency in each State, whereby a State agency which desires to act as the agent of the Secretary of Labor. in operating all of the offices of the United States Employment Service in such State may do so, provided that such State agency submits a plan which-

(1) provides for the establishment of a single State agency to administer the plan;

(2) provides specifically for carrying out the duties and obligations set forth in sections 3 and 4 of this Act;

(3) provides for day-to-day operating arrangements between public employment offices in a labor market extending across State borders so that workers' applications for jobs and employers' applications for workers shall be handled as if made at a single office serving the entire labor market area; (4) provides for such methods of administration (including methods relating to the establishment and maintenance of personnel standards on a merit basis, except that the Secretary of Labor shall exercise no authority with respect to the selection, tenure of office, or compensation of any individual employed in accordance with such methods) as are found by the Secretary of Labor to be necessary for the proper and efficient operation of the plan;

(5) provides that the same agency shall administer the State unemployment compensation law or shall cooperate with the agency which administers the State unemployment compensation law in furnishing all information and services necessary for the proper and efficient administration of the State unemployment compensation law;

(6) provides for cooperation with every agency of the United States and of any other State charged with the administration of any unemployment compensation law;

(7) provides that the State agency will make such reports in such form and containing such information as the Secretary of Labor may from time to time require, and comply with such provisions as the Secretary of Labor may from time to time find necessary to insure the correctness and verification of such reports:

(8) provides for the replacement within a reasonable time of any moneys received pursuant to section 6 which because of any action or contingency have been lost or have been expended for purposes other than or in amounts in excess of those found as necessary by the Secretary of Labor for the proper administration of such plan; and

(9) provides for the establishment of a State Advisory Employment Service Policy Council and local advisory councils with the same composition and for the same purposes as set forth in section 8.