Annual Message to the Congress: The Manpower Report of the President.

To the Congress of the United States:

I report on a year of progress toward an active manpower policy.

We have raised employment and lowered unemployment through programs

--to stimulate more employment opportunities.

--to upgrade the skills and adaptability of our work force.

--and to link the two--jobs and men-more effectively.

Much remains to be done. We are still far from the goals of the Great Society.

Each individual must have a fair chance to develop his abilities and to engage in productive and rewarding activity. In the Great Society, all men must have the self-respect and economic security that flow from full use of their talents.

Remarkable advances of science must be directed to permit increasing freedom of choice in shaping the character and quality of our world. We have the potential in terms of manpower and material resources to apply new knowledge and techniques to insure that the life of all Americans--at home and at work--can be more creative, more productive, and more satisfying. Although we may not fully realize our goal of "human work for human beings" in our lifetime, we can make dramatic progress toward that goal in this generation.

Manpower problems are many and everchanging. But several are paramount--and call for the highest priorities in manpower policy.

The number one problem is still unemployment. Despite recent improvements, unemployment and underemployment are intolerably high, particularly for those lacking education, skills, or opportunity because of poverty and discrimination.

A second problem relates to the needs of the great number of new young jobseekers. An unprecedented increase is occurring at a time when the rate of youth unemployment is already three times greater than adult unemployment.

A third major problem concerns rapid change that burdens many workers and communities, even while benefiting the economy generally. Technological change can be the key to ever-greater prosperity and individual opportunity. But it also brings the growth of new demands and the decline of old ones, readjustments in government programs, migration of people from rural to urban areas, and other changes that require difficult adjustments.

A fourth problem concerns jobs that remain undeveloped. Despite high levels of unemployment and vast numbers of new workers and workers being released from outmoded work, the desires and needs of many consumers, businesses, and communities for additional services are not being adequately met.

These are the immediate challenges for an affirmative manpower policy:

--to open the way to employment for the undereducated and poverty-stricken.

--to provide our young people with opportunities for education, training, and constructive work experience needed for satisfying adult worklife.

--to ease the sting of change for displaced workers and disrupted communities.

--to develop and fill jobs, especially in the service occupations, to satisfy unmet needs in business, at home, and in the community.

We can and shall meet these challenges. But while I focus here on Federal Government activities, success can come only through cooperation and hard work at all levels of government and by all sectors of our society.

Many policies are involved. Economic policy will have to promote necessary overall economic growth. Policy making related to scientific, social welfare, health, education, and other fields will have to recognize manpower implications and objectives.

THE CHALLENGES Some of these challenges are not new. And we have responded to them already. Our progress to date provides a firm foundation for an increased effort in the future. In 1964--as reflected in the accompanying manpower report from the Secretary of Labor--more men were working, producing greater abundance at higher wages and profits, than ever before in history. Employment was up more than a million and one half over the previous year, the largest increase since the 1959 recovery from recession. There are now more than 70 million Americans engaged in civilian work.

Last year we also cut into the waste of our manpower. Unemployment was reduced by 300,000, to the lowest percentage of our work force during the last 7 years. Long-term unemployment also decreased, as did the number of people working part time who wished to work full time.

UNEMPLOYMENT But these lower unemployment levels do not indicate that we have eliminated waste of manpower and the hardship that accompanies such waste. In an average week during 1964, almost 3.9 million jobless persons sought and failed to find employment. Another 2.5 million who wanted full-time jobs could only find part-time work.

Many of our men and women on farms, though technically classified as employed, are underemployed. They are working at unacceptably low incomes, as are millions of other workers throughout the economy.

In 1964, the unemployment rate was reduced to 5.2 percent of the labor force; at the beginning of 1965, it stood at just under 5 percent. But it still is considerably higher than it had been in earlier post-World War II years.

The major problems of unemployment do not show up in these aggregate national figures. They show up in the sharp differences in unemployment rates between the undereducated and the highly educated, the unskilled and the skilled, the nonwhite and the white, and the young and the adult workers.

Workers who did not complete high school have unemployment rates nearly twice as high as those with more education, and five times as high as those who have gone through college.

Laborers and many types of semiskilled manual workers are unemployed at rates of two to three times the average for skilled and technical groups.

Unemployment of nonwhites, at nearly 10 percent, is more than twice as prevalent as for whites.

The unemployment rate for teenagers is almost 15 percent--over three times that for all adults and over five times as high as for married men. Nonwhite teenagers are unemployed at a shocking rate of over 25 percent.

Other concentrations of unemployment provide cause for alarm:

--jobless workers over the age of 45 remain unemployed far longer than do younger persons; more than 35 percent of the jobless in this age group remain unemployed 15 or more weeks.

--in some areas, joblessness and gross underemployment blight the lives of a quarter of the residents.

There is no simple solution, no single means of providing employment opportunities for all these disadvantaged Americans. For many, greater economic growth will create new opportunities. For many others who are chronically unemployed, or underemployed, there must be special assistance to overcome handicaps barring the way to employment.

YOUNG WORKERS A recent study has indicated some of the handicaps compounding employment difficulties for young people out of school.

The first handicap is lack of a basic education. There are about 7 million young people between the ages of 16 and 21 who are out of school. Of these, 3 million dropped out before finishing high school; x million completed only elementary school or less.

One out of every four dropouts in the labor force could not find employment-twice the unemployment rate of the high school graduates.

A second handicap is lack of skills or work experience. About 65 percent of the dropouts and 40 percent of the graduates had no work experience during the years they were in school. Nine dropouts out of every ten reported no job training after leaving school. High school graduates, on the other hand, were three times as likely to enter an occupational training program.

A third handicap is poverty: 4 dropouts out of every 10 still living at home were in families with less than $3,000 annual income; only 2 high school graduates of every 10 came from such low-income families.

A fourth handicap is lack of knowledge of training and jobs that are available. Of every 10 high school dropouts, 8 reported that they had never been counseled by a school official or by a public employment office about job training or the kind of work to look for. Even among high school graduates, less than half reported that they had received occupational guidance.

A final handicap is the sharp increase in the number of new young jobseekers-crowding into a work force already containing high teenage unemployment.

CHANGE: MANPOWER RESOURCES In 1965, the number of 18- and 19-year-old workers is expected to increase by 500,000 -- twice the increase of last year. Succeeding waves of new young workers will swell the 18-to-24-year-old work force by more than 3 million in the next 5 years, an increase twothirds higher than in the past 5 years.

But the increase in the size of the work force will not be confined to young ages alone. Overall, the labor force is expected to grow by 7 1/2 million workers in the next 5 years--So percent greater than in the last 5 years.

There will be many more workers in those categories confronted by major employment difficulties--particularly nonwhites and older workers.

Negroes presently constitute only 10 percent of the work-age population, but they may account for 18 percent of the coming manpower increase. In the next 5 years, almost a million and a half nonwhites will be added to the work force; less than 800,000 were added during the last 5 years. The marked increase of nonwhites in the labor force will intensify the need for eliminating discrimination in employment, training, and education opportunities.

The increase of men age 55 or older in the labor force will require more attention to solving problems of discrimination against older workers. It will raise the importance of retraining and reemploying those with substantial but outmoded skills.

CHANGE : REQUIREMENTS In our dynamic economy, occupational demands change continually: New skills are needed; old ones become outmoded; individual companies and industries often contract or expand rapidly. As a result, there are always some workers seeking new employment and some employers seeking new workers. Fluctuations in area growth rates and patterns often lead workers to relocate in order to find or fill job needs.

Too often this change requires workers to undergo dislocation, joblessness, or underemployment. It requires employers to experience unfilled job needs. These burdens and wastes can be minimized substantially by improving the mechanisms for anticipating and aiding needed adjustment to change.

We cannot pinpoint the timing, magnitude and location of specific changes, but we can interpret broad underlying trends. We can do much to prepare to meet these trends more effectively.

We know that the growth of technology will change the content of many jobs and intensify the need for adaptation and retraining. But the impact of technology on total employment is not foreordained. That remains for us to shape and determine. New technology will not soon curtail need for human labor. Its impact varies by industry, expanding manpower requirements in many industries even while contracting in others.

We know too that we must have large quantities of highly trained manpower in many professional and technical fields if we are to obtain the rate and types of growth we seek for the future. We are now giving more attention to preparing for manpower requirements that will result from major public programs recommended this year.

In the long run, the need for semiskilled production workers and for many types of unskilled workers will continue to shrink in relation to demand in other occupational fields.

Here, we can learn from the experience of 1964. This was the best year for economic and employment growth in this decade; there was a marked increase in the employment of semiskilled production workers and even a small increase in employment of laborers.

But this upturn did not change the long-term trend: most of the employment rise and the greatest rates of increase in 1964 were not in goods-production industries, but in trade, services, and State and local government activities. The sharpest upturns in demand continued to be in clerical, professional, and technical occupations.

Demand for agricultural workers will continue to decline, releasing farm manpower for other sectors of the economy. During World War II, one worker of every six in the Nation was employed on the farm. Today only 1 worker in 16 is so employed. The skills required for farm employment are becoming less manual and more mechanical, scientific, technical, and managerial.

In many service fields, there is high and rising demand as consumers spend a growing proportion of rising incomes for various services. But this demand often remains unfulfilled for lack of qualified workers.

Demand for repair services, home maintenance, and hospital and other community services, for example, often goes unmet because trained workers and efficient firms to provide these services are in short supply.

The service industries provide new challenges for the development of new business enterprises and jobs to put to rewarding use more of the manpower no longer needed for industrial and farm production.

ACTIONS STARTED Our general progress is no accident. Purposeful action is paying off and building the base for further advance.

The tax cut of 1964 met an immediate and vital objective: it helped generate more jobs. It rapidly spurred consumer and business demand and, in turn, expansion of employment to produce for that demand. It was the prime new moving force in last year's substantial employment upturn. My economic report outlines more specifically how it and other economic policies will continue to buttress general growth.

Many other actions have been initiated to meet many and varying manpower needs, but three efforts have been in the forefront in tackling the major challenges:

--the strengthening of education.

--the opening of the war on poverty.

--the start of the major program for training the unemployed and underemployed.

First, the education measures enacted by the last Congress are aiding a long-needed substantial expansion of both college education and vocational education. The principal focus of the legislation enacted thus far has been on

--construction of facilities needed for universities, colleges, community colleges, technical and vocational schools.

--increasing and improving training for specific professions, most notably undermanned medical, dental, nursing and other health professions, and specialized teaching fields.

--support for more students to continue higher education through loans and fellowships.

--expansion and modernization of vocational education at the high school and post-high-school levels, particularly in fields with expanding manpower requirements.

These steps will provide many long-run returns, but immediate values too are evident. More young people are being encouraged to pursue higher education rather than become part of a large undertrained young labor force seeking full-time employment. And more employment opportunities are being generated by higher education's expanding demand for construction, service, and supply activities.

In the longer run, these education programs will better equip our youth for the challenge of constructively shaping and adapting to future economic change. And they will help to develop the increased numbers of better prepared professional, technical, and other highly trained manpower required by an advancing society.

Second, under the Economic Opportunity Act of 1964, the war on poverty puts high priority on providing useful work experience, education, and skill development for disadvantaged youth and undereducated, jobless adults. Programs are moving ahead to establish

--rural conservation centers and urban residential centers to provide work experience and training away from home for young people who now live in environments which severely hamper their opportunities.

--work experience and training opportunities in public and nonprofit agencies to help potential or actual high school dropouts to continue or resume education to increase their employability.

--work opportunities to help needy college students earn their way through college.

--community action programs which seek, through locally conceived actions ranging from preschool programs for needy children to new types of work programs, to bring in more of those still left out of our record prosperity.

--basic education and literacy training for the uneducated.

--work experience projects to help adults on public assistance pave their way to self-support.

And third, training and retraining for the unemployed and underemployed under the Manpower Development and Training Act is providing another practical tool, in cooperation with the conventional education system and vocational schooling, to adapt skills of the labor force to changing needs.

This program is designed to equip unemployed workers, as well as underemployed farm workers, with specific occupational training required for available jobs. It is giving thousands of jobless workers a new lease on working life--and is meeting employer demand for qualified manpower.

It is heightening awareness of workers and employers to values of occupational training. It is leading to new training techniques. And, utilizing the initiative of local groups, it is building in every State and hundreds of communities a base of retraining knowledge and experience to meet better the challenge of shifts in skill requirements.

In recent months more of the training opportunities are reaching the young, the nonwhites, the poorly educated, and the long-term unemployed--those with the greatest unemployment difficulties.

Beyond these three basic efforts, I want to summarize briefly other important actions newly initiated to meet today's and tomorrow's manpower challenges.

Equal employment opportunity. One way of getting at the employment difficulties afflicting much of the Negro population and other minority groups is to eliminate the discrimination which has excluded too many from the general progress. The Civil Rights Act of 1964 has established as the law of the land that racial and other discrimination in employment shall not blemish the future as it has the past.

Youth services. We are developing additional ways of reaching constructively many of the urban and rural young people who need jobs, training, additional education, and other assistance to become self-supporting adults and contributing members of society.

Youth Opportunity Centers are being set up, as part of the Federal-State employment service system and youth programs in community action organizations aided by the Office of Economic Opportunity, to assist large numbers not now adequately being reached. Through special services established in or near disadvantaged neighborhoods, they will provide these young people with counseling, testing, information, and appropriate referral to training programs and placement services.

Apprenticeship information centers have been established in nine cities to work with labor and management in assisting young people to take advantage of opportunities for training as craftsmen. Particular emphasis is being placed on opportunities for minority youth.

Young men are being given Selective Service examinations at the earliest opportunity in order to identify as soon as possible educational or physical deficiencies which would disqualify them for military service. Those who cannot meet the minimum military requirements are being offered aid by the public employment service and other agencies in obtaining education, rehabilitation assistance, job training, job finding, and other needed services.

Appraisal of policies. To evaluate the broad currents of change and help determine how to meet them in a coordinated manner, there have been established

--a Commission on Technology, Automation and Economic Progress. Its 14 distinguished members, drawn from outside the Government, will examine our technological course, its likely impact on our way of life, and means of channeling technical progress toward meeting unfilled needs of our people. It is to present its report and recommendations by next January.

--the President's Committee on Manpower, composed of principal Federal executives. It is providing a continuing assessment of the interrelation of Federal programs and the country's manpower resources and requirements.

--an Interagency Committee on Education, composed of representatives of Federal agencies with major education activities. It is serving to review and coordinate Federal policies and programs affecting education.

Communities with major shutdowns. Change can also come when a community is hit by shutdown of a major plant or facility. Experience in many communities has demonstrated that normal mechanisms cannot cope with such economic reversal expeditiously--and we should not rely on time alone to heal economic sores. I have set up a Presidential Task Force on Community Assistance to offer assistance.

On request from a stricken or threatened community, the task force will help draw on the knowledge and resources of Federal agencies to supplement those of local representatives to meet the economic disaster, much as is done when natural catastrophe now strikes an area.

Unfilled manpower requirements. To overcome and prevent unemployment, we must improve information on current and prospective manpower needs. A new program for identifying job vacancies has been started. Pilot surveys have been initiated in 16 major communities to collect information on the extent and nature of untilled job openings by occupation, so that steps can be taken more effectively to match unemployed workers and vacant jobs.

Farm labor. Another measure to match our needs and our manpower stems from termination of the legislation which had authorized temporary importation of Mexican farm workers. To help employers make the transition to employment of American workers, a major recruiting effort is underway to attract unemployed American workers to fill seasonal farm jobs, at wage levels and working conditions consistent with American standards.

In another notable action, the Farm Labor Contractor Registration Act will provide needed protection for domestic migrant farm workers by requiring crew leaders to observe certain minimum standards.

Federal Government as employer. It is my intention to have the employment policies of the Executive Branch of the Government set a constructive example for all employers. I am glad to report that in the past year

--operating effectiveness has been improved, without unreasonable burdens on individual employees. Employees facing displacement are helped to adjust by retraining, by transfer and relocation assistance, and by the use of attrition and phasing out rather than abrupt closedown of activities no longer needed.

--a new manpower analysis program is assessing Federal staffing needs as a basis for efficient program planning and management. The first analysis and projection have been completed for major white-collar occupations.

--fair employment programs are opening better opportunities for qualified Negroes; they have progressed in larger numbers than ever before into middle and upper salary levels of Federal service.

--qualified women have moved into higher level positions at an accelerated pace.

--productive employment opportunity in Federal service is being offered by a new program for mentally retarded persons, as an extension of the long-standing program for employing handicapped persons.

ACTIONS NEEDED Our progress is cause for pride, but not for pause. Affirmative policy recognizes that vast tasks remain undone.

Far too many Americans still are unemployed and underemployed. Far too many lack skills or assistance needed to enter rewarding employment. Far too many are overwhelmed by change instead of being enabled to ride it to new heights. They are unable to contribute or to share adequately in our unexcelled general prosperity.

And far too many children and young adults are headed for similar underachievement--and waste of their potential contribution to a better Society--if we do not do better by them.

We must open opportunity, genuine opportunity for each of them--opportunity to learn and opportunity to earn in keeping with all their potential. Only then can we truly say and truly know that the Great Society is within our reach.

Our economic policies have a vital role in this task. The 1966 Federal budget provides for new tax changes and expenditure programs which will help fortify the stimulus to economic growth and employment provided by last year's tax legislation.

As my economic message sets forth, revision of excise taxes and increases in social security benefits this year will bolster needed current and future job growth. So will the change in depreciation rules being made this year to avert an increase in business taxes.

But, as I have also emphasized, fiscal and monetary steps to achieve the full measure of needed growth may encounter problems of inflationary pressures before unemployment targets are reached.

This makes it even more essential that we intensify efforts to improve the caliber of our work force and the effectiveness of our mechanisms for helping match jobs and men.

As we open up new demand and opportunity for work, we must be able to respond by having workers move into such jobs without delay--so that we can move on to full employment without inflation or adverse balance of payments effects.

Active manpower policy to upgrade the capacities of the work force and to improve means of bringing workers and jobs together is therefore needed to supplement economic policy to achieve economic growth.

This is why, along with my fiscal program, I have recommended that we build our manpower programs. I urge that we now

--increase investment in education to build basic abilities for all.

--enlarge occupational training opportunities for the poor, the young, the unemployed, and the underemployed.

--broaden job development activities to provide new jobs to meet unmet needs.

--improve assistance and protection for those bypassed or left behind in the general prosperity.

Details of most of the recommendations have already been presented to the Congress. In brief summary:

Education has immediate high priority. Many manpower difficulties can be traced to educational deficiencies.

Today's and tomorrow's world of work puts a premium on capacity for skill development--and for redevelopment to meet increasingly frequent changes throughout life. Education is the prime developer of such capacity, as well as of ability to use leisure time enjoyably and to attain a higher level of life generally.

The educational program I have urged will bring better education to those who need it most. It will improve our educational methods and resources. It will provide greater opportunity for learning at every age level. And it will help ensure availability of the highly trained talent needed to spur and sustain broad national advance.

The war on poverty must now be enlarged. Its beginnings have stirred hope and effort.

For the next year I have asked for funds which would permit some 600,000 needy youngsters and adults to be enrolled in the work experience and training programs initiated under the Economic Opportunity Act.

I seek also to help some 300 cities and rural localities mobilize community action antipoverty programs, particularly for children and youth. These efforts would seek in new ways to combat economic and social handicaps which contribute to manpower waste and poverty.

Manpower training must be strengthened. Several major changes are now warranted in the Manpower Development and Training Act.

The feasibility and value of public investment in skill training for the unemployed and underemployed have become apparent. This act need no longer be considered temporary. I have asked that it be put on a continuing basis.

The States were to meet a third of training costs under the act next year. I am asking that this be modified to permit the Federal share to be up to 90 percent, so that the program can be carried forward without disruption.

I have urged also that we strengthen authority to experiment with and demonstrate new ways of surmounting barriers to skill development for the unemployed and underemployed, lengthen the maximum period of training allowances and liberalize allowance practices, and extend pilot efforts to aid unemployed workers through geographic relocation.

I have requested too that we enlarge investment in manpower research, including the establishment of regional manpower research centers, to develop the new knowledge and techniques needed to improve our manpower programs and to train more manpower specialists.

Job-development activities must also be increased. I have recommended expanded efforts under the Manpower Act to help develop many service employment opportunities now wasted because of lack of trained workers and lack of managerial skills necessary to provide such services efficiently.

Our people seek improved services--in home and equipment maintenance and repair, in the hospitals, in our eating places, and in a wide range of personal services. But a large part of such demand remains unmet.

My recommendations seek to tap these areas of job opportunity by offering assistance to the business community and to unemployed workers to take the organizational and training steps necessary to make these potential opportunities materialize into fruitful employment and service.

Area and regional recovery programs are also needed to overcome adverse effects of geographic shifts. Additional job-creating efforts must be focused in areas lagging behind in employment opportunity. This requires comprehensive action to revitalize major regions hampered by large concentrations of poverty and joblessness.

I propose that we strengthen and improve programs initiated under the Area Redevelopment Act.

The Appalachian redevelopment program will inaugurate a farsighted development effort in this hard-hit region.

Employment services must be improved to strengthen national ability to adapt to changing manpower needs. I have recommended increases in budget to strengthen the present Federal-State employment service system's ability to provide information, counseling, recruiting, placement and other assistance required for more effective bringing together of workers and employers.

Minimum wage and overtime protection should be extended to protect the unprotected. I will propose extension of coverage of the Fair Labor Standards Act for this vital purpose.

Unemployment insurance has to be modernized. Present benefit coverage and levels do not adequately ease the financial blow of job loss. The changes I will propose are needed to better sustain the income of workers during the gaps between jobs and to add to the stability of the economy.

Other recommended programs of major new economic and social action are also directly relevant to our manpower concerns. Improvements recommended in public assistance, social insurance, and medical care programs will contribute to the employability of many of our people.

The reforms I have requested in immigration policy will base admission to this country chiefly on skills and talent rather than place of origin. Such change would be both true to our ideals and advantageous to our need for trained manpower.

And more broadly, I have asked that we undertake programs to rebuild our cities and conserve our countryside, to provide areas for recreation, to modernize mass transit systems, to improve our health, to control pollution.

Each has many manpower implications-but above all each will help build the Great Society and, in so doing, will open vast new opportunities to utilize our growing manpower constructively.

CONCLUSION Much that I have reported and recommended here has a short-term focus, and necessarily so if today's actions are to meet immediate challenges.

But beyond seeking to master the current challenges, the directions charted here will move us further toward a vision, newly sensed, even if not yet wholly perceived.

That vision is a new relationship between man and work--to be made possible by advances in man's power to develop and apply his capacities and new technological capabilities.

In the Great Society, work shall be an outlet for man's interests and desires. Each individual shall have full opportunity to use his capacities in employment which satisfies personally and contributes generally to the quality of the Nation's life.

That is the future to which we reach, the goal to which active manpower policy must evolve along with companion policies.

The way there is hardly clear. But we should not underestimate our potential for a rapid pace, lest we fall short of the attainable: seeking little, we will get little and deserve little.

We will have to try, adapt, try anew, and adapt again, but always on to this goal, always on until what is now too often only a dream--that no human talent shall go to waste, that each man shall have full opportunity to be all he can be--can become a reality for all.

LYNDON B. JOHNSON