bituminous coal mining rose an astonishing 96 percent while employment was falling 262,700. Railroad productivity rose 65 percent in the same period while employment fell 540,000. There is no way to measure the exact amount of unemployment due strictly to technological change. We do know that manufacturing employment lost 900,000 jobs in 1960 while total employment was making records in every one of the first 10 months. How many of those jobs are permanent losses we do not know, but the indications are that the technological attrition in industrial employment is becoming high. Thus, each of the four postwar recoveries from recession has shown a higher unemployment rate than the previous one. Also, one of the distressing aspects of much of current unemployment is its long-term nature: 647,000 of the unemployed in January had been looking for work for 27 weeks or longer. The shadow of technological unemployment has fallen across mill towns, mining towns, textile towns, and manufacturing towns across the Nation. This past winter, men in West Virginia gathered around open fires on street corners listening for rumors of jobs. The coming of spring brings hope, but each spring in many industries finds fewer men at work. Yet the long-term legacy of industrial progress has been a good one. To define the problem is also to state the promise, and to envision the progress is to define the problem. Automation, for example, upgrades the entire labor force by requiring higher educational and occupational attainments. It sets a bright new premium on skill and intelligence. But are we equipped to handle the educational and training needs inherent in such change' Automation frees human hands from labor, lifts the burden of production from the backs of men. But are we, as a people, prepared to turn the leisure time we gain to constructive use, to recreation in its true meaning, the "re-creation" of our lives? The broad goal of realizing the promise and solving the problems is acknowledged by all Americans. The question of means may often become divisive. Labor and management have, in the 2 or 3 years, developed a realistic technique of referral-that is, they refer the problems raised by automation away from, rather than toward, the bargaining table. The device most frequently used is that of the special committee. sometimes including public members, which operates outside the bargaining arena, away from its pressures and deadlines and crosscurrents. Such committees are now at work in a number of industries-steel, meatpacking and construction, for example. There is also the Government-created Presidential Railroad Com mission, with labor, management and public members, studying the complex problems of work rules and practices in that industry. Can this technique of study and recommendation work? While it is an example of goodwill, and good sense, it is also ar indication of a failure in the past to anticipate the impact of automation. These are substantially ex post facto bodies, some brough into being after strikes, some rushed together when the urgency for them became clear. I feel that they can find solutions. At the same time, studies made by the Department of Labor make it clear that if labor and management, in particular industries, plan in advance for technological change, measure out the effect of such change before it takes place, then its impact upon employment is greatly lessened, often nullified, while its benefits to the industry is enlarged. One of the Nation's largest manufacturers of radios, phonographs and television sets, for example, switched to automatic assembly a few years ago. Union officials were consulted in advance and changes and procedures were established for retaining some workers, reassigning others, upgrading still others. Not a single job was lost. Pay for some of the new automated jobs increased by 5 to 15 percent. Incentive pay systems were established in other, older jobs whose character had been transformed. The transition was orderly and effective. A large life-insurance company had a similar experience. One of its divisions handled 850,000 policy transactions a month, used 125 punchcard machines and employed about 198 people. The company decided to install a computer, which it estimated would reduce expenses by more than $200,000 a year, cut the number of punchcard machines to 21 and reduce employment to 85 people. After the decision, the company planned most carefully for the personnel adjustments. Affected employees were consulted well in advance. Each was interviewed at length concerning his preference in other operations of the company, and all who wished were successfully placed in new jobs. The same story was repeated in a large bakery, an oil refinery and other companies we studied. All of these studies highlighted several important factors that were present to make automation a human, as well as a mechanical, success. They were: (1) An adequate leadtime between the decision to automate and the actual changeover. (2) Thorough consultation between labor and management concerning employee displacement and job changes. (3) Open and honest reporting to the people directly affected. (4) Perhaps most important of all, the timing of the change to coincide with a period of employment or market expansion. The experience of successful companies indicates that automation in a context of expanding national employment and economic growth presents few problems that adequate and open planning cannot solve. At the same time, automation in a context of declining opportunity and slow economic growth can have a serious effect upon the work force. When national employment opportunity is reduced by declining business, for example, the worker faced with technological unemployment has limited alternatives, not only in his own locality but elsewhere as well. Laggard economic growth also may impair the ability of a company to provide alternate employment within its own structure. One of the most important lessons learned thus far is that the need for training and retraining the work force exists across the board in American life. No employer or employee is exempt from the need, and each ignores it at his own cost. It is evident, also, that no master plan can be drawn for lifting the skills of a work force as varied and diverse as ours. The situation in each community, and within each industry, requires its own devices and tools. What each does have in common is the need for maximum cooperation among important segments of the community-education, business, and labor, to name three. Recent developments in Hazleton, Pa., and Phoenix, Ariz., are cases in point: Hazleton has been in a difficult unemployment situation because of the decline of the anthracite coal industry. In 1958, a corporation agreed to take over an abandoned railroad roundhouse that had been purchased by the Hazleton Industrial Development Corp. and converted to modern industrial use. Last spring, the company found itself desperately short of skilled machinists; only 2 of 40 applicants met the strict technical standards the work required. The company began to consider moving. At that juncture, the Development Corp., the chamber of commerce, representatives of the State employment service and the U.S. Department of Labor's Bureau of Apprenticeship and Training met together. The result was a community wide training program for ma chinists. Classes were given in the Hazleton Vocational School, and pupils included not only workers from the company but unemployed workers from the area as well. The State of Pennsylvania provided additional funds for equipment and facilities needed by the public school. A six-man laborand-management committee was formed to conduct the program. The chamber of commerce initiated a survey of the skills of the work force in the Hazleton area, and as a result two classes in supervisory development were started on the Hazleton campus of the Pennsyl vania State University on January 23 of this year. Courses in engineering, drafting, and shop mathematics have been recently added. That is the Hazleton story-one of wide community cooperation to fill the need to update and retrain workers. It occurred against a background of substantial unemployment as a result of the coal decline. In Phoenix, the economic context is different-but the need and response were the same. Following a skills survey of the area a few years ago, far-sighted Phoenix employers and labor organizations joined with civic and school groups to start training programs that would insure them the skilled manpower the future seemed to require. These educational programs are now in operation, supported by men from all segments of the community whose self-interest is also their city's interest, and, in the broad picture, their Nation's as well. Many other communities have launched cooperative attacks on the skills problem. However, they will succeed, aided by some Federal programs, only if the national economy is providing jobs and business opportunity. The issue before the President's Advisory Committee on LaborManagement Policy, then, has been not merely one of means or methods of communication, but of much broader scale considerations. aimed at creating an economic life within which automation can function freely and without harm. The study of automation, a boon to some and a bogeyman to others brings one eventually to an essential element in American life: the public responsibility that resides within private decision in a free economy. It points up for the businessman the fact that the conduct of his business influences not only the lives and welfare of his employees, but the national welfare. It reminds labor leaders that constructive and creative planning must replace opposition based on short-term considerations. And it brings home to the public the realization that the cost of freedom in economic life is responsibility. Enlightened businessmen, farsighted labor leaders and a responsible public can, together, make automation a general blessing. The policies and programs that will be emerging from industrial and national committees should be carefully watched by all Americans. They could well be the blueprint for a better world. MANPOWER REPORT OF THE PRESIDENT, To the Congress of the United States: We in America have come far toward the achievement of a free economy that realizes the full potential of each individual member of its work force. It is in no sense a matter of chance or fortune that we have come this far. The ideal of full employment, in the large sense that each individual shall become all that he is capable of becoming, and shall contribute fully to the well-being of the Nation even as he fully shares in that well being, is at the heart of our democratic belief. If we have never achieved that ideal, neither have we ever for long been content to fall short of it. We have measured ourselves by the persistence of our effort to meet the standard of the full development and use of our human resources. As we still fall short of that standard, we are still not satisfied. This first manpower report to the Congress is couched in terms of immediate problems and specific proposals to meet them. But however separate these problems may seem, collectively they represent the gap between our manpower performance and our objective of the full use of our human resources: The steps I propose are necessary to achieve that objective. It is within our power to take these steps; and in that measure it is within our power to consummate an achievement of such magnitude as to mark this decade for all time in the history of human progress. Unemployment is our No. 1 economic problem. It wastes the lives of men and women, depriving both them and the Nation. Our continued underuse of human and physical capacity is costing us some $30 to $40 billion of additional goods and services annually. This means a considerably lower standard of living than we would otherwise enjoy. More seriously-ominously-it means we are doing less than our best in staffing ourselves in the struggle for freedom at home and abroad that now commands our energies and resources on an unprecedented scale, and in evermore demanding forms. For each of the past 5 years now the rate of unemployment has averaged 51⁄2 percent or more. This has resulted largely from a slowing down of the rate of economic growth. During the period 1947-57 nonfarm employment increased an average of 1.9 percent a year, or about 900,000 jobs annually. At this rate the economy was nearly keeping pace with the increase in the work force (as it was at that time) and could accommodate most changes in the structure of employment. Since 1957, however, employment has increased an average of only 0.9 percent a year. This is less than half a million additional jobs a year-not nearly enough to keep up. The changing structure of employment, from manufacturing production to private and public services, may be seen from the singular fact that nearly twothirds of the new jobs added to the economy in the past 5 years have been in State and local government, for the most part in teaching. We cannot accept this situation. The first imperative is to release and stimulate those consumer and investment forces that create the demand for work. An economy that is rapidly expanding will provide both increased opportunity for employment and an environment in which the benefits of technological advance can be had without undue disruption. I have proposed that major tax changes be initiated this year to inject additional demand and provide increased incentives to fuel an upsurge in production and employment. At the same time, we must act to improve the functioning and structure of our labor markets, and the quality of preparation of our manpower for the occupational needs of tomorrow. Growth and change in manpower requirements vary by industry, occupation, and area, as do changes wrought by technology and by other powerful forces. Our manpower resources also grow irreg ularly Skills, age distribution, and other characteristics are in constant flux. Public policies must encourage and facilitate the adjustments made necessary by the ever-changing pattern of job requirements. Private industry and trade unions must also exercise initiative and responsibility to adapt jobs and employment practices to make the fullest use of manpower resources, and to do so in a humane and efficient manner. BACKGROUND FOR MANPOWER POLICY Manpower is the basic resource. It is the indispensable means of converting other resources to mankind's use and benefit. How well we develop and employ human skills is fundamental in deciding how much we will accomplish as a nation. The manner in which we do so will, moreover, profoundly determine the kind of nation we become. Nothing more exactly identifies the totalitarian or closed society than the rigid and, more often than not, brutish direction of labor at all levels. Typically, this is done in a quest for efficiency that is never attained. By contrast, it is our contention that public and private policies which facilitate free and prudent choices by individuals as to where and at what they shall work will, in the end, produce by far the most efficient, as well as the only morally acceptable, distribution of manpower. Education and training are indispensable elements that give meaning to the free choice of occupation. From its first beginning the American National Government has followed policies designed to raise the level of education and training in the Nation, and to insure that it should be available to all citizens. The Continental Congress. by the Northwest Ordinance of 1787, provided funds from land sales to support a system of free public education. During the Civil War |