[United States Department of Labor Sixty-Fifth Annual Report, Fiscal Year 1977]
[From the U.S. Government Publishing Office, www.gpo.gov]


Mjnited States
Department of Labor
Sixty-Fifth
Annual Report D1 san diego
Fiscal Year 1977 "L’c LIBRflRY
« 16 1978
United States Department of Labor Sixty-Fifth Annual Report Fiscal Year 1977
Ray Marshall, Secretary
3 1336 05750 3584
United States Department of Labor
Ray Marshall1	Secretary of Labor
Paul Jensen2	Executive Assistant and Counselor to the Secretary
John W. Leslie	Director Office of Information, Publications and Reports
Robert J. Brown3	Under Secretary
Craig Berrington4	Executive Assistant to the Under Secretary
Floyd G. Ansley	Chairman Employees’ Compensation Appeals Board
Samuel J. Smith5	Chairman Benefits Review Board
H. Stephan Gordon	Chief Administrative Law Judge
Peter Henle6	Deputy Under Secretary for Economic Policy
Nik B. Edes7	Deputy Under Secretary for Legislation and Intergovernmental Relations
Howard D. Samuel8	Deputy Under Secretary for International Affairs
Herbert N. Blackman	Associate Deputy Under Secretary for International Affairs
Carin A. Clauss9	Solicitor
Alfred G. Albert	Deputy Solicitor
Robert B. Lagather	Deputy Solicitor (Regional Operations)
Arnold Packer10	Assistant Secretary for Policy, Evaluation and Research
Donald A. Nichols11	Deputy Assistant Secretary for Program Analysis and Policy Development
Vacant	Deputy Assistant Secretary for Research and Evaluation
Alfred M. Zuck12	Assistant Secretary for Administration and Management
Eckehard Muessig	Deputy Assistant Secretary for Administration and Management
Andre C. Whisenton	Librarian
Donald Elisburg13	Assistant Secretary for Employment Standards
John B. Mumford	Deputy Assistant Secretary for Employment Standards
Weldon J. Rougeau14	Director Office of Federal Contract Compliance Programs
Xavier M. Vela15	Wage-Hour Administrator
Alexis M. Herman16	Director Women’s Bureau
Vacant	Director Office of Worker’s Compensation Programs
Julius Shiskin	Commissioner of Labor Statistics
Janet Norwood	Principal Deputy Commissioner and Deputy Commissioner for Data Analysis
Thomas W. Gavett	Deputy Commissioner for Statistical Operations and Processing
Francis X. Burkhardt17	Assistant Secretary for Labor-Management Relations
Jack A. Warshaw	Deputy Assistant Secretary for Labor-Management Relations
Ian D. Lanoff18	Administrator for Pension and Welfare Benefit Programs
Ernest G. Green19	Assistant Secretary for Employment and Training
Robert J. McConnon20	Employment and Training Administrator and Deputy • Assistant Secretary
Roland R. Mora21	Deputy Assistant Secretary for Veterans’ Employment
William B. Hewitt	Administrator Office of Policy, Evaluation and Research
Robert Anderson22	Administrator Office of Comprehensive Employment Development
Hugh C. Murphy	Administrator Bureau of Apprenticeship and Training
William B. Lewis	Administrator United States Employment Service
Lawrence F. Weatherford	Administrator Unemployment Insurance Service
Robert Taggart23	Administrator Office of Youth Programs
Vacant	Administrator Office of Field Operations
Albert J. Angebranndt	Administrator Office of Administration and Management
Irving L. Godwin24	Director Office of National Programs
Eula Bingham25	Assistant Secretary for Occupational Safety and Health
Basil J. Whiting, Jr.26	Deputy Assistant Secretary for Occupational Safety and Health
'Appointed 1/27/77 to replace W. J. Usery, Jr.
’Appointed 7/10/77 to replace James H. Hogue ’Appointed 3/13/77 to replace Michael H. Moskow 4Appointed 4/10/77 to replace Paul S. McAuliffe ’Appointed 9/12/77 to replace Ruth V. Washington “Appointed 3/6/77 to replace Henry H. Perritt, Jr.
’Appointed 4/18/77 to replace Kenneth M. Duberstein 8Appointed 3/9/77 to replace Joel Segall
’Appointed 3/13/77 to replace William J. Kilberg '“Appointed 3/18/77 to replace Abraham Weiss "Appointed 6/19/77 to replace Ralph H. Mueller '’Appointed 7/10/77 to replace Fred G. Clark
l3Appointed 3/13/77 to replace John C. Read '“•Appointed 6/5/77 to replace Lawrence Z. Lorber l5Appointed 7/3/77 to replace Ronald J. James l6Appointed 3/18/77 to replace Carmen R. Maymi '’Appointed 3/18/77 to replace Bernard E. DeLury '"Appointed 5/22/77 to replace William J. Chadwick '’Appointed 3/13/77 to replace William H. Kolberg 20Appointed 3/4/77 to replace Ben Burdetsky 2‘Appointed 8/8/77
22Appointed 9/29/77 to replace Pierce A. Quinlan 23Appointed 8/29/77
24Appointed 7/3/77
25Appointed 3/18/77 to replace Morton C. Corn 26Appointed 6/5/77 to replace Bert M. Concklin
Contents
1 Report of the Secretary
7 Employment and Training Administration
29 Bureau of Labor Statistics
45 Occupational Safety and Health Administration
55 Employment Standards Administration
67 Office of the Assistant Secretary for Administration and Management
71 Labor-Management Services Administration
79 Office of the Solicitor
101 Bureau of International Labor Affairs
107 Policy, Evaluation and Research
108 Benefits Review Board
109 Employees’ Compensation Appeals Board
110 Information Activities
113 Appendix Tables
Report of the Secretary
In January 1977, President Carter declared his first domestic priority was to put people to work. Finding productive employment for people needing jobs became the first order of business for the new Administration and for the Department of Labor. The Department took the lead role in creating and implementing programs to train and place the unemployed in productive, personally fulfilling and rewarding jobs in both the public and private sectors of the economy.
At President Carter’s request, the Congress enacted in April an economic stimulus package, including a vastly expanded $6.5 billion public service employment program. This program more than doubled the number of temporary jobs available to unemployed workers. Special attention was given to those groups in our society particularly hard-hit by the economic downturn, including the long-term unemployed, welfare recipients, Vietnam-era veterans, minority group members, and youths. These temporary public sector jobs were designed to put people back to work immediately, helping them and their families earn much needed income, while providing their communities with useful services. It was recognized that more jobs would have to be created in the private sector, as well, but this would take more time. By the end of the fiscal year, employment had gone up by almost three million and unemployment was steadily declining.
Programs begun during the year provided on-the-job training and placement in private sector jobs. The Help Through Industry Retraining and Employment (HIRE) Program arranged for major corporations across the country to hire veterans and other unemployed workers. The Skill Training Improvement Program (STIP) gave skill training to long-term unemployed workers and persons exhausting their unemployment benefits. It also improved the matching of program training with industry needs. These and other selective employment programs helped move us towards full employment without inflation.
Persistent high youth unemployment—particularly among minorities—spurred the creation of some 400,000
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new employment, training and work-experience opportunities for jobless youth aged 16-24. The Youth Employment and Demonstrations Projects Act, signed into law during the year, initiated three major programs to combat youth joblessness. A National Youth Conservation Corps employs youth in conservation projects and in maintaining and improving public parks and lands. The Youth Community Conservation and Improvements Projects puts young people aged 16-19 to work on community projects in rural and urban areas, and the Comprehensive Employment and Training Program assists disadvantaged or low-income youth aged 16-21 who are out of school and out of work.
The Job Corps, long one of our best training programs for young people, is expanding to double its enrollment. Eventually, it will provide about 100,000 disadvantaged young men and women each year with basic education, job training and related services in residential centers across the country.
The work habits and attitudes formed early in life last a lifetime. A protracted period of joblessness can seriously hurt young people’s self-confidence and sense of individual worth. Our efforts to aid jobless youth is a sound investment we must make today to insure that our nation has the trained workers it will need tomorrow.
Taken together, the public service jobs build-up was the largest government employment effort since the 1930s. It represented a commitment by the government to the nation’s unemployed, assuring them that a job for all who want and need to work is an attainable goal. During the past year, we made important strides toward achieving that goal.
Although the Department concentrated much of its effort during the year on putting people back to work, it did not neglect its responsibilities for helping improve the quality and safety of working conditions for all Americans. During its seven-year history, the Occupational Safety and Health Administration had become a frequent target of criticism for overly restrictive “nitpicking” regulations and burdensome compliance requirements.
In May, following a comprehensive review of all OSHA programs and policies, the Department announced a major redirection of OSHA and the setting of new, “common sense” priorities. These priorities insured that our efforts concentrated on attacking the most serious health and safety problems affecting the greatest number of people. Complex regulations have been simplified and
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rewritten in concise, understandable language. Unnecessary regulations have been eliminated and paper work requirements have been virtually eliminated for small employers and greatly reduced for others. Expanded consultation services now assist small employers to comply with the law and more cooperation was sought with business and labor in developing new or revised regulations.
In an effort to reduce the alarming rate of cancer being traced to workplace hazards, OS HA this year developed a comprehensive new system for identifying and regulating toxic substances. This enabled OSHA to respond with greater speed and efficiency to these threats to workers’ health.
During the past year, we have worked to give OSHA the firm administrative guidance and direction it deserves while devising standards and procedures that are fair to workers and their employers. The safety and health of working people has taken on a new and urgent importance with the increasing recognition that the hazards of the workplace—including those subtle but deadly chemical hazards that cannot be seen or immediately felt—can and must be eliminated. We are confident that OSHA is on the right track and we intend to move ahead.
Two of the Department’s other important areas of enforcement responsibility were reorganized during the year to better serve and protect workers. Administration of the highly complex Employee Retirement Income Security Act of 1974 had created confusion and needless administrative burdens for plan managers and offered inadequate protection for workers and their families. After a major reevaluation of the pension reform program, more efficient and effective enforcement policies were developed. These simplified requirements and reduced paperwork for plan administrators and greatly improved the administration of this law. Assistance was provided to small businesses, which had been hit hardest by compliance costs. More resources were allocated for educating workers about their rights. Enforcement was strengthened and investigations stepped up to insure that the retirement funds and benefits of over 30 million workers were fully protected.
Efforts to provide equal opportunity in employment were stepped up as the Office of Federal Contract Compliance Programs was reorganized and strengthened. The number of compliance agencies responsible for affirmative action regulations was reduced from 16 to 11 in order to consolidate enforcement activities. Recommendations of a task force established to evaluate the contract
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compliance program were being reviewed as a step toward further improving affirmative action efforts for women and minorities.
Enforcement efforts increased considerably during the year. Three companies were debarred from future federal contract work compared with only 13 debarments in the previous 12-year history of equal employment opportunity enforcement.
All efforts at regulatory reform and the job training and placement programs depend on the health of the general economy. Affirmative action cannot work when people are being laid off; pension plans go under when production is cut back and safety and health in the workplace cannot be maintained when factories are closed or neglected.
Labor-management relations are a vital ingredient in maintaining good economic health. Collective bargaining, the heart of labor-management relations in this country, is our best means of assuring industrial peace and increasing productivity. Throughout the year, the Department maintained the position that it should not become directly involved in collective bargaining negotiations except in situations of extreme national emergency. The Department has and will continue to do all it can to guarantee that collective bargaining proceeds in a healthy climate.
To help insure a healthy collective bargaining climate, the Department developed a series of tripartite meetings among labor, management and government in the airline industry to try and clarify and narrow the range of collective bargaining issues. By looking ahead to possible problem areas, these types of meetings can go a long way toward alleviating problems before collective bargaining begins in other industries.
The Department also actively participated in developing several legislative initiatives proposed by the administration and now before Congress which affect working people. Undocumented workers, whose numbers are impossible to determine, enter this country illegally and are often exploited in low-paying jobs under substandard conditions. Besides holding jobs that could go to citizens needing work, undocumented workers lack the protection of state and federal labor laws and tend to depress living and working conditions for all workers.
The President’s comprehensive proposal for dealing with the problem of undocumented workers included making it illegal to hire them, with enforcement to include
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both civil and criminal penalties; stepping up enforcement of the Fair Labor Standards and Farm Labor Contractor Registration Acts in areas where many undocumented aliens are hired; providing new legal status to aliens already settled and working in this country; increasing the resources of the border patrols and working with governments of nations which are major sources of undocumented workers to help them improve their economies and their controls over alien smuggling rings.
In August, a welfare reform proposal was sent to Congress, designed to provide work opportunities for men and women who need and are able to hold jobs and to provide equitable cash assistance for people unable or not expected to hold jobs. An important part of this proposal includes jobs and training to break the poverty cycle in families with children that contain potential breadwinners. Up to 1.4 million public service jobs by 1981 would guarantee employment for workers unable to obtain private-sector work under the proposal. These would offer training, skills and experience to help the jobless qualify for permanent jobs in the future.
In an effort to strengthen and further guarantee the conduct of free collective bargaining, the first comprehensive reform of the nation’s basic labor laws was proposed this year. The bill was designed to eliminate delays in Natioal Labor Relations Board procedures, making them fairer, prompter and more predictable. It was also designed to protect the rights of labor and management by strengthening NLRB sanctions against those who break the law and preserve the integrity of the federal contracting process by withholding federal contracts from firms that willfully and repeatedly violate orders from the NLRB and the courts.
These new initiatives, along with the day-to-day activities of the Department during the past year, all had a common goal—“to foster, promote and develop the welfare of the wage earners of the United States,” to use the words of the Department’s original charter. Every citizen is entitled to expect that as a result of our laws and the administration of those laws to be able to work under safe conditions offering personal protection and equitable treatment.
To achieve our goal of balanced progress, we have based our efforts on economic and social principles which, when combined with good will and common sense, can help bring the benefits of human progress to all our citizens.
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Employment ana Training Administration
The Employment and Training Administration (ETA) acted promptly during the 1977 fiscal year to carry out its responsibilities under the President’s economic stimulus program to reduce continued high unemployment. Major effort was devoted to planning the expansion of public service employment (PSE) funded under the Economic Stimulus Appropriation Act of 1977. The nearly $8 billion made available by the act and a continuing resolution was designed to support 415,000 additional jobs, increasing the total to 725,000 by February 1978. The Emergency Jobs Program was redesigned to provide for additional special jobs projects for low-income, long-term unemployed workers and welfare recipients. The goal is to hire eligible veterans for 35 percent of the new jobs.
Additional activities started during the year for these groups were the Help Through Industry Retraining and Employment (HIRE) Program and the Skill Training Improvement Program (STIP). HIRE arranges for on-the-job training for employment in private industry for veterans and other unemployed workers; and STIP gives skill training to long-term unemployed workers and persons exhausting unemployment compensation benefits, to improve the match between program training and industry needs. ETA staff also contributed plans for the jobs portion of the President’s welfare reform proposal and designed a Work Equity Demonstration to test a large-scale PSE program for welfare recipients. The project was to be conducted in Minnesota beginning early in fiscal 1978.
The Youth Employment and Demonstration Projects Act, signed by the President on August 5, 1977, gave ETA broad new responsibilities for youth activities. To carry out the four programs authorized by the act, ETA set up a Youth Programs Task Force, which concentrated on program guidance, training, and other assistance in planning youth services. Arrangements to start the programs were nearing completion by year’s end. Three programs were to begin operating during the first quarter of fiscal 1978: the
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Young Adult Conservation Corps, to hire unemployed young people to work on public lands; Youth Community Conservation and Improvement Projects, providing paid work in community betterment; and Youth Employment and Training Programs, supplying a full range of job-related assistance to supplement the services authorized by title I of the Comprehensive Employment and Training Act (CETA). The fourth activity, Youth Incentive Entitlement Pilot Projects, is to test the feasibility of guaranteeing jobs to economically disadvantaged youth who are in school or willing to return. These projects were to start in January 1978 in order to coordinate them with school semesters.
The ongoing Job Corps program expanded from 20,000 to 22,000 slots and made plans for carrying out the President’s proposal to double its capacity. While the 10-percent increase was achieved mainly by enlarging existing centers, a new center was opened in Mississippi. Plans for expanding Job Corps to 44,000 slots by the end of fiscal 1978 included starting new types of programs as well as opening more contract and civilian conservation centers.
While unemployment remained high, particularly among certain groups, a sizable economic expansion created additional jobs and contributed to gains in employment service placements. The number of persons placed in nonfarm jobs rose to nearly 4.0 million, an increase of almost 24 percent over fiscal 1976. The number of veterans placed, 721,000 was up to 20 percent. Nearly 277,000 WIN registrants entered employment, and half of the new jobholders earned enough to leave welfare completely.
The Nation’s mixed economic performance was reflected in unemployment insurance payment levels. The number of workers receiving benefits under State and Federal programs was down slightly from the previous year, dropping from 11.3 to 10.4 million. Total payments dropped from $19.1 to $15.0 billion. Under the Worker Adjustment Assistance program, which aids jobless workers adversely affected by the Nation’s trade policies, both numbers of workers certified and assistance payments increased substantially.
The Comprehensive Employment and Training Act (CETA) was extended through fiscal 1978. In addition to planning or starting new activities authorized under CETA, ETA continued to support a full range of continuing programs. CETA prime sponsors provided training, work experience, and other services, and national programs assisted
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native Americans, farmworkers, older workers, and others in particular need of job-related services. The Bureau of Apprenticeship and Training observed the 40th anniversary of the National Apprenticeship Act and continued efforts to expand apprenticeship by opening up opportunities for Marine Corps and law enforcement personnel, as well as minority group members and women.
Community Employment Programs
ETA planned the expansion of public service employment (PSE) funded under the Economic Stiihulus Appropriation Act of 1977. The $6.6 billion appropriated plus almost $1.4 billion added under a continuing resolution are to be available for an 18-month period through the end of fiscal 1978. The act calls for 125,000 transitional jobs authorized under title II of CETA and 600,000 emergency public jobs under title VI, up from 50,000 and 260,000, respectively.
ETA concentrated on revising the title VI Emergency Jobs Program to create temporary jobs, providing useful work for specific groups of unemployed workers. Under the redesign, the PSE increase is to be achieved by adding special 1-year jobs projects. Persons eligible for the new jobs are low-income, long-term unemployed workers and recipients of Aid to Families with Dependent Children. The goal is to hire eligible veterans for 35 percent of the new jobs. All funds not required to sustain the 260,000 jobs funded earlier under title VI are to be used for the redesigned program. In addition, half of the vacancies in the earlier jobs are to go to persons eligible for work in the new projects.
Another significant activity was planning and starting the Skill Training Improvement Program (STIP). Conducted by selected prime sponsors with the cooperation of the business community, STIP operates under title III of CETA and is supported by $250 million under the Economic Stimulus Appropriation Act. Its aim is to improve the match between CETA training and industry needs. Since STIP is intended to serve permanently displaced workers in need of retraining, eligibility is restricted to the long-term unemployed and persons exhausting unemployment compensation benefits. Participants are trained in occupations requiring significant and recognized skills, such as technical, repair, and paraprofessional occupations.
Allocating funds to CETA prime sponsors for comprehensive employment and training programs and public service jobs continued, and steps were taken to help sponsors
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manage their programs more effectively and to improve the review of their performance. In fiscal 1977, 440 prime sponsors—14 more than in the previous year—conducted programs under titles I, II, and VI of CETA and, in addition, 5 sponsors received titles I and VI grants. They consisted of 65 cities, 181 counties, 140 consortia, 55 balance-of-State sponsors, and 4 rural Concentrated Employment Program sponsors.
These sponsors received over $10 billion in Federal funds to carry out their responsibilities. Of this sum, $1.88 billion was for comprehensive employment and training services authorized by title I, such as work experience, classroom and on-the-job training, recruitment, orientation, counseling, other supportive services, and placement. Support for transitional jobs under title II amounted to $1.54 billion for fiscal years 1977 and 1978 and for emergency jobs under title VI to $6.85 billion (also a 2-year grant). Of these amounts, $1.14 billion in title II and $6,847 billion in title VI funds were part of the economic stimulus appropriation for additional public service jobs. (The title VI funds included $1,384 billion distributed under a continuing resolution.)
During fiscal 1977, these programs served 2,361,400 persons. Cumulative enrollments were 1,415,600 for title I programs, 352,900 for title II, and 592,900 for title VI. In addition, nearly a million young people aged 14 through 21 got part-time jobs in the Summer Program for Economically Disadvantaged Youth. These summer job opportunities were supported by $640 million in Federal funds, consisting of a $590 million appropriation under CETA title III, $20 million from the Secretary’s title I discretionary account, and $30 million carried over from the previous summer program.
A uniform set of indicators, developed to measure the performance of title I programs, was used as the basis for guidelines on reviewing prime sponsors’ plans for fiscal 1978 and assessing their performance. In addition, they were to be used by prime sponsors, as well as by the Department, for a variety of management purposes.
Youth Programs
The Youth Employment and Demonstration Projects Act, signed by the President on August 5, 1977, created four new programs to employ and improve the job prospects for youth: the Young Adult Conservation Corps, to hire unem
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ployed young people to work on public lands in projects run by the Departments of Agriculture and the Interior, under overall administration by the Department of Labor, or in State projects supported by Federal grants; Youth Incentive Entitlement Pilot Projects, to test the feasibility of guaranteeing jobs to economically disadvantaged youth in school or willing to return; Youth Community Conservation and Improvement Projects, to provide paid work in community betterment for unemployed youth who have had severe difficulties in finding jobs; and Youth Employment and Training Programs, to supply a full range of job-related services to low-income youth to supplement the services authorized by title I of CETA. The programs were supported by a funding of $1 billion.
To carry out the new act, ETA set up a Youth Programs Task Force, which set directions for the programs and provided guidance, training, and other assistance on planning youth activities. Arrangements to start the programs were nearing completion by year’s end. The Young Adult Conservation Corps, Youth Community Conservation and Improvement Projects, and Youth Employment and Training Programs were to begin operating during the first quarter of fiscal 1978. To coordinate the entitlement projects with school semesters, sponsors were to start them in January 1978.
As an initial step in implementing the act, a Planning Charter, which outlined the basic principles guiding the Department in designing and implementing the programs, including the constraints, objectives, and programmatic implications involved, was published. The Knowledge Development Plan, which allocated the discretionary money provided in the act, was also issued. The objective was to support: (1) coordination with other Federal agencies and the CETA network; (2) model or innovative programs to test new techniques and designs in order to increase understanding of youth employment problems and identify possible solutions; and (3) both short- and long-term evaluation of program effectiveness, so that the Labor Department could report to the Congress on what works best, for whom, and under what circumstances.
An interagency agreement was negotiated among the Departments of Labor, Agriculture, and the Interior on operation of the Young Adult Conservation Corps. Considerable attention was also devoted to technical assistance and training. Training on the new programs was given to key re
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gional office representatives, who, in turn, were to train regional personnel and the staffs of prime sponsors, State employment security agencies, and other concerned groups. In addition, a variety of material on youth problems and programs was supplied to regional offices and prime sponsors.
Other key activities carried out before the end of the fiscal year included: preparing a plan for youth participation at the national and local levels in every stage of the design, implementation, administration, and evaluation of the new programs; issuing funding estimates and planning grants to CETA prime sponsors for Youth Community Conservation and Improvement Projects and Youth Employment and Training Programs; and issuing application guidelines for Youth Incentive Entitlement Pilot Projects to all prime sponsors. These guidelines provided the framework for the research and demonstration expected, including the experimental design, administrative responsibilities, and competitive procedures.
The Job Corps concentrated on an immediate 10-percent expansion of its operations and plans for carrying out the President’s proposal to double its capacity. Actions to increase its contracted slot level from 20,000 to 22,000 started in the first quarter of the year. While the additions were achieved mainly by enlarging the capacity of existing centers, a new center was opened in Mississippi.
The timetable worked out for doubling the size of Job Corps called for increasing it capacity from 22,000 to 44,000 slots by the end of fiscal 1978. Planners expected to have at least 36,000 corpsmembers enrolled by that time and to add the remaining 8,000 by the middle of fiscal 1979. In addition to opening more contract and civilian conservation centers, Job Corps planned to start new types of programs. They were to include satellite centers, linkages with CETA farmworker programs, ecology-related training programs, and work experience in industry. In addition, there were to be centers specializing in specific vocational clusters and advanced career training intended to broaden the range of opportunities for corpsmembers.
A 3-year effort was begun to improve the quality of life at Job Corps centers. During fiscal 1977, $15.7 million was allocated to upgrading the quality of center facilities and programs. Worn equipment was being replaced, and deteriorated facilities were being rehabilitated to assure that they met Federal and local building and health codes and regulations. The corpsmembers’ point of view was to be an impor
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tant consideration in deciding on the improvements to be made.
Job Corps served 61,700 youth, including 41,200 new enrollees, during the year. Of the 40,200 youth leaving their centers, 24,700, or 61 percent, completed their programs. About 20,300 of the youth leaving Job Corps were placed in jobs with an average wage of $2.83 an hour. Another 9,300 returned to school or enlisted in the Armed Forces.
National Special Emphasis Programs
As part of the President’s economic stimulus program, new and expanded services were provided for population groups in particular need of job-related services during fiscal year 1977. A new national effort was opening up on-the-job training opportunities for veterans, and increased funding provided under the Economic Stimulus Appropriation Act was enabling the older worker program to serve more people.
Additional services for native Americans and farmworkers, supported by economic stimulus funds, and new activities for youth from these groups, authorized by the Youth Employment and Demonstration Projects Act, were provided or planned for fiscal 1978. Besides special programs for veterans, older workers, native Americans, and farmworkers, the Office of National Programs continued to administer programs for young people—particularly minority youth—persons of limited English-speaking ability, and others.
The Help Through Industry Retraining and Employment (HIRE) Program, announced by President Carter in June 1977, arranges for private industry to provide on-the-job training for veterans and other unemployed workers. Priority in job referrals goes to disabled and Vietnam-era veterans. Workers are hired first and then trained with the skills needed to perform as part of the firm’s regular work force. HIRE makes $140 million available to major companies for reimbursement of their training costs. After 3 months, 16,000 jobs had been pledged under the program. The Department of Labor’s objective is to place 100,000 veterans and other eligible workers by the end of fiscal 1978.
The older worker program, providing part-time community service jobs to disadvantaged older persons, more than doubled its services during the year. Authorized by title IX of the Older Americans Amendments of 1975, the
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program provided about 15,000 jobs supported by grants to five national organizations, three States, and four territories during the first 9 months of fiscal 1977. With funding increased to an annual level of $150 million in July 1977, the number of jobs was expanded to 37,400 and participating States to 44. Further increases were planned for fiscal 1978, with an objective of 47,000 jobs by year’s end, and arrangements were made to support an additional 4,800 positions formerly funded by the Department of Health, Education, and Welfare under title X of the Public Works and Economics Development Act.
The native American program supplied work, training, and other job-related services in virtually every part of the country. The program was operated by designated prime sponsors who are Indian or native American tribes, bands, or groups; Alaska native villages; Hawaii native communities; Indian communities in the State of Oklahoma; and organizations working with nonreservation native Americans which received direct grants from the Department of Labor.
During fiscal 1977, 157 prime sponsors were designated, and grants totaling $141,909,629 were awarded or initiated. This sum included additional funds for public service employment and a new initiatives program designed to promote economic development on reservations and prepare enrollees for skilled jobs in unsubsidized employment. The program provided skill training in paralegal, paramedical, domestic fuel development, waste disposal management, agricultural, and nine other occupations.
Overall, the native American program served about 86,500 persons during fiscal 1977. Intensified technical assistance and training were given in such areas as planning, administrative procedures, financial management, reporting, program development, and coordination of activities. As a result, the program created an employment and training capability among prime sponsor reservations, tribes, and villages, enabling them to operate many services that were previously provided for them.
The migrant and seasonal farmworker program offered a broad range of services, including child care, emergency assistance, health and medical care, relocation assistance, and legal aid—in addition to education, classroom and on-the-job training, work experience, and job referral and placement. With additional support in economic stimulus funds, new services were planned.
In fiscal 1977, 86 grants totaling $63.2 million were
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awarded to 74 organizations operating in 48 States and Puerto Rico. Of the approximately 260,000 farmworkers served, 46.4 percent were black and 40.4 percent Hispanic. Special projects in California, Texas, Florida, and New York worked to improve coordination among farmworker programs, the employment service, and CETA balance-of-State sponosors. Different program services were being linked to avoid duplication.
National staff arranged for distributing an additional $16 million in economic stimulus funds for assistance to farmworkers: about $5 million for residential skills training; $8 million for coordination of employment and training programs with rural economic development activities, and $3 million for rehabilitating and weatherizing farm labor camps and farmworker-owned housing. Another $15.3 million in youth program funds was to support work experience, training, and other services for farm youth.
Other major national efforts included the Apprenticeship Outreach Program, which placed more than 12,000 minority members and women in skilled jobs during the year, and the national on-the-job training program, under which national trade associations and labor organizations trained about 20,000 unemployed and disadvantaged persons for private sector jobs. In addition, promotion and development programs encouraged business and labor participation in Federal employment and training programs, and financial support enabled the national offices of several community-based organizations to give technical assistance to local affiliates that operated programs for CETA prime sponsors.
Employment Service
The public employment service (ES) recorded considerable gains in both placements and job orders during fiscal 1977. The number of persons placed in nonfarm jobs rose to 3.8 million, an increase of 16 percent over the corresponding 12 months ending September 30, 1976. Similarly, the number of nonfarm jobs listed by employers, 7.7 million, was up 10 percent. Despite the large number of youth under 22 placed in short-term summer employment, 63 percent of the jobs were expected to last more than 150 days.
Groups receiving special job-finding assistance accounted for substantial numbers of placements, including about 98,000 for migrant and seasonal farmworkers, 720,000 for unemployment insurance claimants, 400,000 for CETA
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participants, and more than 1.3 million for economically disadvantaged applicants.
Actions to check on local office performance included continued efforts to assure that equitable services were available to migrant and seasonal farmworkers. Extensive onsite monitoring was carried out in local offices, and a new report on services was adopted to guide performance reviews. It contained eight key indicators of performance to compare the services provided to migrant and seasonal farmworkers with those given to other applicants. In addition, new regulations on services to farmworkers were issued as part of continuing work on simplifying and updating operating instructions and regulations. Other new regulations dealt with services to veterans, the complaint system, and certification of aliens for permanent employment; those scheduled for publication in fiscal 1978 were to cover basic and supportive services and more clearly define the roles of national, regional, and State offices in administering and operating employment service programs.
The U.S. Employment Service took a number of steps to strengthen equal employment opportunity (EEO). Guidelines required State agencies to analyze the composition of the population requiring services and reassess the status of persons most in need of services. The complaint system for persons who feel that they are not getting satisfactory service was refined and strengthened, and State agencies were encouraged to use affirmative action procedures to recruit employees, particularly for upper level professional positions. In addition, more specific standards were being prepared on handling job orders from employers with affirmative action plans.
Another way the employment service increased opportunities for minorities was by operating more Apprenticeship Information Centers (AIC’s). For the first time, AIC’s were funded as a special ES project, and a result, new centers were opened and previously closed ones reactivated. The 37 centers operating in 20 States were expected to serve about 46,000 young people a year.
By the year’s end, 25 State agencies had approved computerized job matching systems, and 15 real-time or instantaneous systems and 25 batch or overnight processing systems were to start operating within the next 2 years. Meanwhile, the Employment Security Automation Program, in which the employment service and unemployment insurance operations shared equipment and communication lines, resulted in substantial savings. Additional savings were ex
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pected as real-time data entry and applicant locator capacities reduced the need for clerical staff.
Several major publications were issued or prepared during the year. “Occupations in Demand at Job Service Offices,” a new monthly bulletin first issued in June, told jobseekers about occupations with large numbers of openings, where the jobs were located, and what they paid. The new 4th edition of the “Dictionary of Occupational Titles” was to be distributed early in fiscal 1978, and work was nearing completion on a supplement to relate occupational information to career areas in which jobs are grouped according to interest factors and common worker traits requirements.
As part of the continuing effort to improve the quality and range of employer services, local employer committees and ES task forces worked together in 250 communities in 44 States and the District of Columbia. These groups identified problems in employer use of the employment service and planned ways of solving them. In addition, five State employer committees had been formed, and more were being organized.
Another continuing activity was research and development on occupational testing. In fiscal 1977, substantial progress was made in research to: (1) develop or revalidate aptitude tests that predict success in specific occupations and are free of bias against minority applicants; (2) improve tests used in vocational counseling, including the General Aptitude Test Battery (GATB), the Nonreading Aptitude Test Battery, the Basic Occupational Literacy Test, and work sample assessment techniques; (3) develop a new inventory for measuring the occupational interests of applicants; and (4) design a new Spanish edition of the GATB. In addition, employment service offices continued to make wide use of tests developed earlier to help applicants with career choices.
A research project started in midyear was developing techniques to estimate the maximum number of transactions in which the employment service had a reasonable chance of making successful referrals. This information was expected to be useful in evaluating placement activities and labor market planning and as basic economic information for industry and the public.
Services to Veterans
In a step to strengthen services to veterans, a Deputy Assistant Secretary for Veterans’ Employment took office in September 1977. The new position was established by the
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Veterans’ Education and Employment Assistance Act of 1976. The Deputy Assistant Secretary will administer the Veterans Employment Service and be the principal adviser to the Secretary on all departmental policies relating to veterans.
The initial concern of the new Office of the Deputy Assistant Secretary was to develop a plan for reducing veterans’ unemployment in fiscal 1978. It calls for an intensified veterans’ outreach and job development program concentrated in target cities. The Veterans Employment Service will survey existing programs, determine outreach and job development needs, and provide technical assistance to CETA prime sponsors, local veterans’ organizations, labor unions, and community-based organizations engaged in veterans’ outreach and job development.
Another action was planning a detailed program for the first year of operation. It is specifically designed to carry out provisions of the Emergency Jobs and Unemployment Assistance Act of 1974 requiring the Secretary of Labor to institute an outreach and public information program to advise eligible veterans of employment and training opportunities under CETA and to give employers information and technical assistance in carrying out their responsibilities for employing veterans. The program also implements provisions of the Youth Employment and Demonstration Projects Act calling for increased participation of disabled and qualified Vietnam-era veterans under the age of 35 in CETA public service employment and training programs.
Veterans continued to receive priority in employment services and other special assistance. This year, 721,000 were placed, an increase of 20 percent over the previous year. A major source of jobs for veterans came from the mandatory listing program, requiring Federal contractors to list job openings with the employment service. About 1.1 million job orders were received under the program in fiscal 1977— up 14.8 percent over fiscal 1976—resulting in the placement of 141,000 veterans.
Under the Disabled Veterans Outreach Program, State employment services employed nearly 2,000 disabled veterans to identify other disabled veterans and make them aware of available assistance. In addition, the employment service carried out special efforts to place veterans in new public service jobs and on-the-job training positions under the HIRE Program. To help assure that all local offices provide adequate services to veterans, performance indica
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tors of compliance with requirements were published in the Federal Register.
Veterans continued to receive priority in employment services and other special assistance. This year, 700,000 were placed, an increase of 16 percent over the previous year. A major source of jobs for veterans came from the mandatory listing program, requiring Federal contractors to list job openings with the employment service. Nearly 773,000 job orders were received under the program in the first 9 months of fiscal 1977—up 23 percent over the corresponding period in fiscal 1976—resulting in the placement of 98,000 veterans.
Under the Disabled Veterans Outreach Program, State employment services employed nearly 2,000 disabled veterans to identify other disabled veterans and make them aware of available assistance. In addition, the employment service carried out special efforts to place veterans in new public service jobs and on-the-job training positions under the HIRE Program. To help assure that all local offices provide adequate services to veterans, performance indicators of compliance with requirements were published in the Federal Register.
Unemployment Insurance
The unemployment insurance program continued to replace lost wages at a rapid rate during the year, as 10.4 million individuals received $11.5 billion in benefit payments under regular State and Federal programs and the temporary Special Unemployment Assistance program. An additional $3.5 billion was paid to claimants in the form of extended benefits and Federal Supplemental Benefits (FSB). In the previous year, 11.3 million individuals received a total of $19.1 billion from all programs.
The FSB program, scheduled to expire March 31, 1977, was extended by Public Law 95-19, signed by the President on April 12, 1977. This law provided for taking new claims through October 31, 1977, and paying continued claims through January 31, 1978. It also substantially revised eligibility requirements for FSB by including a job search requirement and giving added emphasis to a claimant’s accepting suitable work as a condition for continued eligibility.
During the year, almost all States completed legislative actions required to implement Public Law 94-566, which extended unemployment insurance coverage to some 9.2 million persons, effective January 1978. Included were most
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jobs in State and local governments; workers on farms employing at least 10 workers in 20 weeks in a calendar year or paying cash wages of at least $20,000 in a calendar quarter; private household workers for an employer who paid cash wages of at least $1,000 in a calendar quarter; and certain workers in nonprofit elementary and secondary schools.
The law also made important changes in program financing, modified the method of triggering on Federal-State extended benefits to make their availability more responsive to economic changes, and established a National Commission on Unemployment Compensation.
Major effort was devoted to improving program quality. Increased workloads resulting from high unemployment in 1975-76 had forced the program to curtail certain claimstaking practices, including periodic review of each claimant’s eligibility for benefits. As one step in restoring high-quality operations, an improved eligibility review program was developed and carried out in fiscal 1977.
There was a substantial increase in activity under the Worker Adjustment Assistance program, which aided jobless workers adversely affected by the Nation’s trade policies. Both the 403 worker petitions certified and the $151 million disbursed in assistance payments were double the figures for fiscal 1976. The program expanded geographically, from serving primarily unemployed workers in the industrialized East to assisting eligible people in all parts of the country. To assure uniformity in providing adjustment assistance, a training package on the program was prepared for all State employment security agencies.
The State agencies played a significant role in the expansion of public service employment by establishing a pool of more than a million unemployed insurance claimants eligible for the new jobs. As a result, claimants were hired for 20 percent of the jobs filled by year’s end.
Work Incentive Program
The Work Incentive (WIN) Program helps employable people applying for or receiving Aid to Families with Dependent Children (AFDC) obtain jobs and become self-sufficient. In fiscal 1977, nearly 245,000 WIN registrants entered full-time employment, and about 32,000 others found part-time jobs.
Total AFDC grants dropped more than $436 million as registrants obtained jobs and left welfare or received reduced benefits to supplement their earnings. These reduc-
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tions were 150 percent greater than those made during fiscal 1976 plus the transition quarter. Moreover, they did not include additional gains to the government from lower medicaid and food stamp costs and income taxes paid by former recipients.
A Work Equity Demonstration to test the public jobs part of the Administration’s welfare reform proposal was planned during the year and is to start in Minnesota during the first quarter of fiscal 1978. The objective is to provide a job for every person in the project area subject to a work requirement under the WIN, Food Stamps, or general assistance programs. Initially, the project will try to place recipients in private employment. If the number of openings in the private sector is insufficient, the project will create enough special subsidized jobs in public and private nonprofit agencies to offer employment to everyone required to work. In addition to testing the job performance of this group, the project is designed to identify limitations on the capacity of the public and private nonprofit sector to absorb additional workers.
About two-fifths of the jobs WIN registrants obtained in fiscal 1977 were in clerical and service occupations. For women, the proportion was more than half. As part of the effort to increase opportunities for women in higher paid nontraditional jobs, a WIN project trained them for jobs in the transportation industry. By year’s end, about 80 enrollees had obtained jobs at average starting wages of more than $5.50 an hour.
WIN helped women on AFDC acquire job skills by arranging for mothers with preschool children to participate in the Job Corps program. In the first project, WIN mothers received a full range of education, training, and supportive services as nonresidential enrollees at the Atlanta Job Corps center, while their children were in the center’s day-care program. By year’s end, 75 women had been enrolled. A similar project was to start at the Job Corps center in San Jose, Calif., early in fiscal 1978, and others were being planned.
Under the National Coordination Committee (NCC) Special Model Program, started late in fiscal 1976, model projects were conducted to test new or modified operations or experimental techniques designed to meet special State and local needs. Objects were to: (1) encourage staff initiative and creativity, (2) introduce effective models into regular program operations, (3) use the models as the basis for full-scale research and development studies, and (4) increase
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the committee’s knowledge of innovative programs and techniques.
Of the seven projects funded by year’s end, three concerned special factors involved in placing women, who made up about three-quarters of the WIN population. The seven projects were:
. Montana Indian Program, providing training and social services to reservation Indians and preparing Indian staff to assume responsibility for the project.
. Illinois NCC Special Model, testing the effectiveness of providing labor market exposure and transportation allowances to AFDC applicants.
. El Paso Spanish-Speaking Program, giving Spanishspeaking women instruction in English as a second language, skill training, and concentrated counseling.
. Duluth WIN/CETA Service Delivery Model, developing simplified procedures for both programs to serve AFDC clients.
. West Virginia’s Special Employability Preparation of WIN Mothers, providing intensive residential skill training to mothers about to lose their grants because their children were close to the age of leaving AFDC.
. Virginia Public Information Program, conducting a media campaign throughout the State to encourage employer participation in WIN.
. Eugene (Oreg.) Program for Physical and Personal Development Training for Women in Nontraditional Occupations to increase women’s physical strength and abilities so that they could be placed in nontraditional jobs, particularly in the lumber industry.
Apprenticeship
In August, the Bureau of Apprenticeship and Training observed the 40th anniversary of the National Apprenticeship Act, authorizing it to develop, expand, and improve apprenticeship. Events included a banquet in Washington and similar observances in 23 cities across the country. A special message from the President and proclamations by Governors, mayors, and other local officials marked the anniversary; and in keeping with its theme, “Partners for Progress,” management, labor, and government leaders participated in the observance.
A significant step to advance apprenticeship was the signing and registration of national standards of apprenticeship for the Marine Corps in July 1977. Under this agree
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ment, Marines completing a formal apprenticeship program preparing them for skilled work in the Marine Corps also qualified for journeyman ratings in equivalent civilian jobs. Separating or retiring Marines were to receive documented records of any training in an apprenticeable occupation.
Law enforcement work was approved as an apprenticeable occupation. As part of the Administration’s New Initiatives in Apprenticeship, the agreement with the International Brotherhood of Police Officers calls for establishing programs to provide apprenticeship opportunities for 1,000 law enforcement personnel during the first year. Other New Initiatives being developed or carried out by staff of the Bureau of Apprenticeship and Training were expected to provide some 60,000 opportunities. The new efforts are:
— A Selected Industry Campaign to expand apprenticeship in industries with growth potential and stable employment which have conducted few apprenticeship programs but have used on-the-job training for worker advancement. Areas selected are the health and medical, energy, trade, and services industries and government.
— Multi-trade Committees in selected cities to give small employers administrative assistance with apprenticeship programs and provide needed assistance in developing new programs.
. A Federal-State Partnership to coordinate efforts of Federal and State apprenticeship agencies, encourage uniform practices, and give financial and technical support to State apprenticeship activities.
. Training and Support for Unemployed Apprentices Allied Craft Workers to continue training of these workers during periods of unemployment and encourage them to remain attached to their trade.
. Training Cost Incentives for New Apprenticeship Programs and Additional Opportunities for Target Groups, subsidizing training costs of program sponsors under a simplified grant or contract procedure. Objectives are to establish new programs and make maximum use of new and existing openings, particularly to increase opportunities for target groups.
. School Apprenticeship Linkage to provide work orientation and preapprenticeship training during early school years. Planned activities include vestibule work exposure, job trials, part-time apprenticeship or preapprenticeship jobs, and entry into registered programs.
During calendar 1976, more than 88,000 apprentices
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were registered and 354,000 received training in programs serviced by the Bureau of Apprenticeship and Training and State apprenticeship agencies. Minorities made up about 18.1 percent of all apprentices and 19.3 percent of those entering programs. Continued high priority was given to increasing the number of women in apprenticeship. Women’s share of all apprentice jobs was 1.7 percent at year’s end, an increase from 1.2 percent a year earlier; they made up 3.1 percent of all entering apprentices. Of the 44,000 registered programs operated in 1976, about 83 percent were conducted by single employers without labor union participation.
The Federal Committee on Apprenticeship continued to make recommendations to the Secretary of Labor on improving and extending apprenticeship. Meetings held during the year recommended expanding apprenticeship and journeyman training in all sectors of the economy; promoting labor standards to protect apprentices and including them in apprenticeship contracts; and identifying research needs and planning projects to test new approaches to apprenticeship and skill training. Other proposals concerned expanding cooperative relationships with State apprenticeship and training agencies and increasing the effectiveness of equal opportunity programs.
Policy, Evaluation, and Research
ETA helped plan the jobs portion of alternate approaches to welfare reform and worked closely with the Department of Health, Education, and Welfare to consolidate the existing Aid to Families with Dependent Children, Supplemental Security Income, and Food Stamps programs. The resulting plans were incorporated in proposed legislation creating the Better Jobs and Income Program. Other principal legislative activity concerned revision and extension of CETA and the Youth Employment and Demonstration Projects Act. In addition, ETA concentrated on policy analysis of youth unemployment, revisions in Defense Manpower Policy No. 4, and actions to increase private sector involvement in employment and training programs.
A computerized system was developed to provide access to labor market information (LMI) needed for policymaking, formulation of legislation, and Federal program allocations. Small experimental and developmental projects continued efforts to improve data accessibility and current methodologies, develop analytical techniques, and increase LMI use by State and local program planners and operators.
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Evaluation studies of the Administration’s economic stimulus program considered the economic impact of public service employment, public works, and countercyclical revenue-sharing programs. Another study started during the year was evaluating the new multi-trade apprenticeship initiative.
Research and development (R&D) efforts included developing a comprehensive R&D strategy on older workers, identifying new techniques for placing handicapped persons, and improving work sample assessment procedures. In addition, a grant was awarded for planning an R&D laboratory dealing with the WIN Program and welfare reform issues, and conceptual research studies were conducted on the labor market problems of Hispanic Americans.
ETA continued to support employment and training researchers through grants for doctoral and postdoctoral studies, and the Manpower Institutional Grants Program supported training of local CETA program practitioners and administrators. Regional resource centers made materials available for training local program planners and service delivery staffs.
Equal Employment Opportunity and Special Review
Significant progress was made during the year in developing new equal employment opportunity (EEO) standards for CETA prime sponsors and other nationally funded programs. The ETA Manual was being revised to add standards for regional offices. Regulations on nondiscrimination in federally assisted programs were rewritten to comply with new Justice Department regulations and conform with the change from categorical to comprehensive employment and training programs.
A number of steps were taken to improve the EEO performance of CETA programs and State employment security agencies. To provide information needed to assess progress in this area, a reporting system was prepared for gathering data on the characteristics of CETA and State agency staff and clients. To help check on compliance in CETA operations, “Guidelines for Reviewing CETA Programs” was prepared and a number of onsite compliance reviews were conducted. Activities related to equal employment opportunity in State agencies included drafting regulations on agency performance, including affirmative action staffing, for early publication in the Federal Register; developing an automated system to make computer-generated EEO data
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readily accessible and facilitate prompt action to correct problems; and preparing review guides for monitoring compliance of UI offices. In addition, a chapter on “Unemployment Insurance—Equal Employment Opportunity Orientation” was added to the EEO Compliance Officer’s Handbook, and training sessions were held to instruct UI and EEO staff in its use. Another training activity was conducting workshops in a number of States to instruct EEO, State, training, and other staff in use of the human resources management approach to equal employment opportunity and affirmative action planning.
The Office of Investigation and Compliance also reviewed employment and training programs for compliance with other legislative requirements. Investigations conducted during the year involved fraud, gross mismanagement, maintenance of effort, ineligible enrollees, wage rate violations, political patronage, and political activity. Potential recovery as a result of violations found amounted to more than $3 million.
Employment and Training Information
With major new jobs and training programs planned or underway during the year, the Employment and Training Administration’s Office of Information produced a variety of materials to inform the public about the new opportunities. Information plans were worked out for the expanded public service employment program, activities authorized by the new youth act, and the jobs tax credit. Materials produced included speeches, press releases, articles, and publications on these topics, plus the HIRE program and PSE placement goals for veterans. Recruitment leaflets, posters, and other publications were prepared for the expanded Job Corps program, and a similar information package on the new youth activities was in process at year’s end.
The Office of Information also continued to produce a variety of regular and special materials about agency services and related areas. News releases reported on the entire range of employment and training activities, and publications varied from pamphlets and flyers directed to potential clients and employers to technical publications reviewing research findings. The first in a new series of publications on jobs in different occupations dealt with opportunities in the telephone and telegraph industries; Spanish editions of several pamphlets informed Hispanic Americans about agency services; and an illustrated pamphlet reviewed labor partici
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pation in agency programs. Other publications included research monographs on such topics as employment problems of black teenagers, working women, and a project to reduce recidivism; apprenticeship standards; and the yearly “Employment and Training Report” and catalog of research projects. Among additional information products were speeches, radio announcements, exhibits, and answers to inquiries from congressional offices, newspaper, radio, and television reporters, and the public.
To inform and assist CETA prime sponsors, ETA provided the monthly ETA Interchange, conferences for prime sponsors on preparing and disseminating information about their programs, and a planned series of publications on CETA program models and innovative programs.
In observance of the 40th anniversary of the National Apprenticeship Act, a special issue of WORKLIFE Magazine was devoted to the history of the apprenticeship system, current efforts to bring in more women and minorities, and recommendations to improve and extend the system. Other issues of the magazine contained special sections on jobs in energy conservation, handicapped workers, and ways of improving the transition from school to work.
A number of consumer information leaflets describing new agency programs and the help they can give to consumers were issued during the year. In addition, the leaflets first issued the previous year were updated regularly.
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Bureau of Labor Statistics
I he economic statistics of the Bureau of Labor Statistics (BLS) continued to be under close scrutiny as indicators of economic performance of the Nation and its workers during fiscal year 1977. The strong expansion experienced by the economy, particularly during the second half of the year, was reflected in the Bureau’s major statistical series.
The national unemployment rate, which had begun to rise again in the first quarter of fiscal 1977, reaching 8.0 percent in November 1976, declined sharply during the second quarter and hovered around 7.0 percent throughout the rest of the fiscal year. Employment surged to a new high of more than 90 million in the Spring, despite the unusual severity of the winter and the sluggishness reported earlier in the year. By the end of the fiscal year, more than 91 million people were employed. Similarly, productivity ended the year on a strong upturn, after posting a decline during the April-June period. Inflation, as measured by the Consumer Price Index (CPI), rose sharply during the second quarter of the fiscal year and then declined considerably, rising at a seasonally adjusted annual rate of 4.2 percent during the last quarter of the year.
Increased attention to BLS statistics led to a close examination of many series and methods and to a great deal of analytical work on programs with legislative mandates and priorities. In anticipation of the needs and interests of the new National Commission on Employment and Unemployment Statistics, which is to examine the validity of current labor force concepts and measures over the next 2 years, the Bureau prepared some 20 papers on various conceptual and definitional issues. The Bureau continued to sharpen and improve its data development program by conducting research on the conceptual and methodological aspects of current labor market measures.
To improve the labor force estimates for State and local areas, improvements in the quality of the data have been made, and further changes in the system have been
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proposed for introduction at the beginning of calendar year 1978.
Plans were developed for expanding the collection, tabulation, publication, and analyses of data on Americans of Hispanic origin, black Americans, and Vietnam-era veterans of Hispanic origin.
The price and living condition studies provide measures of price change at the consumer and wholesale levels. Improved procedures for seasonal adjustment of the Consumer Price Index (CPI) were introduced, and the first stage of a comprehensive revision of the Producer Price Program was completed with data collection for four pilot industries.
The large-scale effort continued to prepare for revising the Consumer Price Index in early 1978 when the Bureau planned two indexes—the revised traditional index for urban wage earners and clerical workers and the new index to cover all urban consumers. The revision of the CPI was designed to update the weights assigned to the various spending categories, the sample of items priced each month and the sample of retail stores. The conceptual basis and statistical methods employed in the CPI also were being modernized.
The series of productivity in the Federal government was refined and expanded. Collection of data on employer expenditures for fringe benefits was initiated, expanding the Employment Cost Index from a measure of change in wages and salaries to one covering total employee compensation.
The regular program of area wage surveys was improved by refining occupational descriptions and expanding data collected on life insurance provisions. The newly-designed data processing system for union and industry wage surveys, coupled with advances in photo-composition techniques, resulted in more timely publication of these reports.
Employer recordkeeping required by the Occupational Safety and Health Administration was simplified. The number of establishments required to report in 1978 was half the number required in 1973, without losing validity for data on high-risk industries.
Major studies and reports published by the Bureau reflected its effort to publish data on minorities and women, and its policy of insuring that statistical data reflect the conditions of the times and that analyses of such data be relevant to contemporary issues.
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In the labor force area, the Bureau produced special studies on working women, youth in the labor force, unemployment among black workers, and—for the first time— employment distribution of women and blacks by detailed industry sector.
In the prices and living conditions area, the Bureau published estimates of autumn 1976 budgets for four-person families and retired couples, selected data from the Diary and Interview components of the 1972-73 Consumer Expenditure Survey, and the public use tapes of these latter data.
In the wages and industrial relations area, publications included General Wage Administration Provisions, Directory of National Unions and Employee Associations, and summary collective bargaining reports in the basic steel, telephone, coal, and longshoring industries. The Monthly Labor Review continued to publish authoritative articles on the Bureau’s programs and in the general field of labor economics.
Current Employment Analysis
Public interest remained focused on unemployment problems in fiscal 1977 because joblessness persisted at historically high levels. Attention was also focused on the validity of the current concepts underlying these data, in part because of the formation of the National Commission on Employment and Unemployment Statistics. Over a 2-year period, the commission is to examine the collection and concepts underlying these data. In anticipation of the needs and interests of the Commission, the Bureau prepared and transmitted to the Commission some 20 papers on various conceptual and definitional issues. The Bureau also published an article describing the current concepts underlying labor force statistics and providing an historical reveiew of previous investigations as well as some insight into the duties and responsibilities charged to the Commission.
The Bureau continued to sharpen and improve its data development program by conducting research on the conceptual and methodological aspects of current labor market measures. It began publishing on a regular monthly basis a range of unemployment measures based on varying definitions of unemployment and of the labor force. In addition, publication of measures of employment as a percentage of the working age population for various labor force groups began on a regular monthly basis. A study was prepared
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and published on measuring the flow and duration of unemployment as components of the unemployment rate, and further research was done on unemployment and employment rates as measures for economic performance.
The Bureau strengthened its policy of insuring that statistical data are timely and relevant. For this reason, the Bureau attempted to present data permitting the elimination of the household head concept, especially in the case of husband-wife families and non-relative households. In 1977, the Bureau also began regular publication of data on the characteristics of the Nation’s workers in terms of their relationship to the other members of the families with which they live. These data reveal, for example, the extent to which the unemployment of a given family member is cushioned by the full- or part-time employment of other family members.
During fiscal year 1977, the Nation’s employment situation reflected strong expansion in the economy. Thus, the Bureau prepared timely analyses of the effects of economic developments on the employment patterns of the Nation’s workers, including articles on the employment situation during 1976 and during the first half of 1977. Another study was prepared and published on workers on layoff.
Two studies focused on youth in the labor force: A report examining the 1977 summer job situation of youth and one on the effect of residence on their labor force characteristics. Several articles dealt with trends in labor force participation and developments among full- and part-time workers.
The Bureau continued to analyze and publish data on the employment status of minorities and women. For the first time, data on the employment distribution of women and blacks by detailed industry sector were published. A special report was prepared at the request of the President on the problem of continued high unemployment among black workers. Plans were developed for a major expansion in the collection, tabulation, publication, and analyses of data on Hispanic Americans, black Americans, and Viet-nam-era veterans of Hispanic origin.
Several new data series were published, and revisions in the format and content of data presentations in Bureau publications were made to provide users with more relevant and accessible information.
A new set of labor force projections to 1990 and new estimates of the expected length of work life of men and
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women were issued during the year. Research was undertaken to improve and refine the methodology used to compute both sets of estimates.
In the field of work schedules, a new set of data was developed and a report was prepared for publication on the number of hours lost because of sickness and other personal reasons. The characteristics of part-time workers were also studied. Working women were the subject of several studies, and information was gathered for a comprehensive statistical data book on women.
Other studies focused on the earnings data for the various demographic groups currently collected through the Current Population Survey. A special test designed to measure the reliability of these data by checking them against the reports of the appropriate employers was also carried out during the year. Other important studies included an analysis of special data collected in May 1976 on the job search activity of unemployed persons. Data were also collected and published on the extent to which employed persons may be looking for other jobs.
Employment Structure and Trends
The statistics on State and local area employment and unemployment were the principal element in the allocation formulas used to distribute over 15 billion dollars of Federal funds to State and other jurisdictions this year. The Bureau has made substantial efforts to improve the quality and public understanding of the local area data. As the year ended, further major improvements in the system were being proposed for the 1978 calendar year.
The responsibilities of the National Occupational Information Coordinating Committee (NOICC), established by the Education Amendments of 1976, were extended in the Youth Employment Act of 1977. The NOICC was required to give special attention to the problems of unemployed youth through activities such as assisting and encouraging the development of State occupational information systems, encouraging counseling and employment services for youth in correctional institutions, and assisting and encouraging local areas to adapt methods of translating national aggregate occupational outlook data into local terms. The Bureau participated on the Technical Steering Group of the NOICC and worked to improve the coordination and communication of those using and developing occupational data on employment, demand and supply.
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Responding to Congress, BLS investigated the feasibility of obtaining data on job vacancies to analyse the extent of unemployment resulting from frictional or structural causes or the lack of aggregate demand. Plans were developed to study the potential uses of job vacancy data at national, regional, and local levels, the relationship of job vacancy statistics to other data, and possible approaches to collecting and analysing data.
Consumer Price Index Revision
The Bureau planned to issue two consumer price indexes starting in spring of 1978—the traditional index and a new index to cover all urban consumers. The revision of the CPI was the first since the early 1960’s and was designed to update the weights assigned to the various spending categories, such as food, clothing and medical care, the sample of items priced each month in the ongoing CPI, and the sample of retail stores. The conceptual basis and statistical methods employed in the CPI were to be modernized.
BLS and the Census Bureau were involved in the Consumer Expenditure Survey, a series of quarterly interviews conducted during 1972-74 and 2-week “diary” surveys of separate samples, involving 40,000 families. The Consumer Expenditure Survey provides a sound basis for the selection and weighting of items in the market basket.
Another major innovation, the “Point-of-Purchase” survey, was conducted to provide data on the retail stores and other places where goods and services are actually bought. In 1974, approximately 20,000 families were asked where they purchased various types of goods and services. A full probability sample of retail stores and other outlets to be used in collecting data for the monthly index was developed for the first time from the survey results. The Bureau of the Census served as collection agent under contract with BLS for this survey.
Improved statistical methods included increased monthly pricing and the move to bi-monthly instead of quarterly pricing, the development of four regional market baskets, and improved procedures for the measurement of sampling errors and overall quality of the data.
Retail outlets and item samples, which were covered in the Point-of-Purchase Survey, were selected. Initiation of the sample, involving the probability selection of detailed items to price in each outlet, was completed, and regular repricing of those outlets started. Sample selection was also
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completed for those items not included in the Point-of-Purchase Survey.
Prices and Living Conditions
The prices and living conditions program provided measures of price change at the consumer and wholesale levels and as indicators for the economy giving measures of living costs in various areas of the U.S. The program also allowed analysis of price behavior and consumer spending patterns, the interpretation of price developments in relation to other major economic changes, and measures of price change for U.S. products traded in world markets. The most widely-used statistics in this program were monthly measures of price change for the consumer and industrial sectors.
The Consumer Price Index (CPI), the principal source of information concerning trends in consumer prices in the United States, was used in the formulation and evaluation of economic policy; in wage negotiations; and for escalation of wages, pensions, Social Security benefits, and food stamp allocations. A major improvement in the procedures for seasonal adjustment of the CPI was introduced during the past fiscal year. The large-scale effort leading to the introduction of a revised Consumer Price Index in the spring of 1978 continued. When completed, this program will provide a revised Consumer Price Index for Urban Wage Earners and Clerical Workers and also a new index covering All Urban Households.
The Producer Price Program supplied the basic economic intelligence on price changes in primary markets. The data were used extensively in forming both public and business policy and in the escalation of contracts and economic research. The first stage of a comprehensive revision of the program was completed with data collection for four pilot industries: newspapers, miscellaneous concrete products, home laundry equipment, and soybean oil mills. Natural gas prices were collected on a 1-month rather than 2-month lag. In addition, new or improved indexes were introduced for liquid propane gas, unleaded gasoline, titanium forgings, zinc die castings, teleprinter terminals, electric power, packaging machinery, construction machinery, metal-working machinery, iron and steel scrap, and power tools.
In the international price area, export price indexes were increased from 35 to 53 percent of the value of U.S. commodity exports. Price indexes existed for 15 percent of
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the value of commodities imported at the fiscal year’s end. Data provided by this program, which provide the only direct measure of price trends for U.S. foreign trade, were used by U.S. Government officials in trade negotiations and analysis of balance of payments. Private sector uses included market analysis, contract escalation, and replacement cost accounting.
Estimates of Autumn 1976 costs of the four-person family budgets were prepared and published in April 1977. The Autumn 1976 costs of the retired couple’s budgets were prepared and published in August 1977.
Selected data from the Diary and Interview components of the 1972-73 Consumer Expenditure Survey were published. This survey, the first in 10 years, provided information on consumer spending patterns in relation to such characteristics as family income, family size, age of family head, region, and other family characteristics. Public use tapes of the data were released for use by government and private research workers and marketing analysis.
Productivity and Technology
A productivity measure for eating and drinking establishments covering 3.6 million workers was added to the list of industries for which measures are published. About 65 separate productivity measures were published covering 25 percent of the employment within the private nonfarm eco-omy—up from 20 percent a year ago.
The series on productivity in the Federal government was refined and expanded. Indexes for the fiscal years 1967-76 were completed for 28 functional groupings of Federal agencies representing 66 percent of the Federal civilian work force.
Trends in manufacturing productivity and labor cost for 11 countries were updated early in the year, and estimates of the comparative levels of compensation of wage earners in these countries were compiled. These measures provided insights into the changing competitive position of the United States in terms of labor costs.
The employment implications of automation and other technological changes were studied and reports appraising the impact of major technological changes on productivity, employment, and occupational requirements over the next 10 years on major American industries were published.
Surveys on labor and material requirements were extended to include new studies on commercial buildings, pub
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lie housing, federal office buildings, and hospitals. These studies measured the total labor and material requirements as well as the occupational distribution of the types of construction to serve as a basis for estimating the labor generating effects of construction programs.
Wages and Industrial Relations
Major innovations in the wages and industrial relations program included the Employment Cost Index, new technical systems for reducing the lag in publication of certain wage surveys by as much as 12 months, and new training programs to improve personnel capabilities. Research resources for BLS program evaluation and development were released, and special analyses were conducted to identify the major causes of occupational wage variation among labor markets, providing knowledge with which to assess the occupational wage program.
Collection of data on employer expenditures for fringe benefits began, expanding the Employment Cost Index from a measure of change in wages and salaries to one covering total employee compensation. Preliminary survey work also began on expanding the industrial coverage of the Index to include the governmental sector.
BLS conducted approximately 100 area wage surveys and 150 special industry studies for the Employment Standards Administration (ESA) to use in administering the Service Contract Act. For the first time, aircraft maintenance occupations were studied for ESA.
The Bureau’s regular program of Area Wage Surveys was improved through refining occupational descriptions and expanding data collected on life insurance provisions. The New Orleans study was expanded to provide the Civil Service Commission with data on paid leave provisions.
The annual survey of professional, administrative, technical, and clerical pay (PATC) was expanded to broaden its coverage of the private sector. The expansion was requested by the President’s pay agent as part of a series of changes in the Federal pay setting process. A test of collection of paid leave data in the PATC survey was completed.
A full survey of occupational pay data in contract construction industries is in progress using, for the first time on this large a scale, a combination of mail and telephone data collection. Significant cost and time savings are resulting from this new approach to industry wage surveys.
The newly-designed data processing system for union
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and industry wage surveys, coupled with advances in photocomposition techniques, resulted in more timely publication of reports on these surveys—about a year after their reference dates. The first BLS occupational wage survey in the electrical machinery sector (semi-conductor) since 1960 began in September 1977. An occupational pay matrix was introduced as a technique for analyzing changes in the wage structure for industry wage surveys.
The results of the fifth biennial survey of employer expenditures for employee compensation, including national data on employer hourly expenditures for wages and benefits such as life and health insurance, retirement programs, and paid leave, were published.
As part of a program begun in 1975 at the request of the Employment Standards Administration, a second group of studies of industries and occupations exempt from the minimum wages and overtime provisions of the Fair Labor Standards Act was completed. A third group of studies, in transportation industries, began and will be completed in fiscal 1978. These were to be the last studies in the exemption program. Planning began for a May 1978 survey, to be conducted for ESA, to determine the frequency distribution of nonsupervisory employees in private nonfarm industries by average hourly earnings and weekly hours of work. Employees were to be classified by age group and sex, as well as by the coverage of their establishment by the Fair Labor Standards Act.
The first half of the study to ascertain the initial effect of the Employee Retirement Income Security Act (ERISA) on private pension plans was completed. The study was to include a detailed analysis of changes in pension plan provisions and finances between September 1974 and 1976. The study was funded by the Labor-Management Services Administration.
In the industrial relations area, work continued on a series of studies analyzing major collective bargaining agreements. A study on “General Wage Administration Provisions” was completed, and a study on “Incentives and Production Standards” was in progress. Also published were reports summarizing more than 100 contract characteristics in the private and public sector.
Work continued on industrial relations aspects in the public sector with completion of reports on (1) “Government Employee Collective Bargaining Laws and Strikes,” and (2) “Police and Firefighters Strikes, 1966-1975.” A compre
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hensive file of State and local labor agreements was being kept current.
Collective bargaining summary reports were issued prior to contract expirations in the basic steel, telephone, coal, and longshoring industries.
Work was in progress on the 1977 edition of the Directory of National Unions and Employee Associations, as was a membership survey of local unaffiliated unions. Data from the Directory yielded information for a Monthly Labor Review article, “Labor Organizations’ Fees and Dues,” the first time the subject has been treated in detail.
Occupational Safety and Health Statistics
Substantial cuts in recordkeeping and reporting requirements by the Office of Occupational Safety and Health Statistics (OSHS) were an important step toward eliminating unnecessary government paperwork. The Secretary’s responsibility to maintain a system of occupational injury and illness statistics, imposed by the Occupational Safety and Health Act (OSH Act) of 1970, has been delegated to the Bureau. These records and reports constituted the Bureau’s only mandatory program and in early 1977 represented over half of the employer paperwork burden of BLS surveys.
Employers were required to maintain prescribed records under OSHA regulations and to make reports if randomly selected for the BLS statistical sample. Three reductions in this area were announced in July 1977. Recordkeeping was simplified. A separate summary form was eliminated, as were all but 19 of 80 items previously summarized, and the log and reporting form were simplified. The number of establishments required to report in 1978 was to be reduced to half the number required in 1973, without loss of validity for data on high-risk industries. Employers of 10 or fewer employees, except for those in the statistical sample or in States with other requirements, were to be excused from maintaining the injury and illness records. These reductions were to eliminate nearly a third of the employer burden involved.
National and State statistics compiled from this system, and the records themselves, provided guidance to the Occupational Safety and Health Administration in carrying out provisions of the Act, policy formulation and oversight information, and specific information for employers, workers, and others involved in injury and illness prevention.
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Statistical programs to meet Federal and State needs are required by the OSH Act, which encourages the participation of State agencies and authorizes grants to provide half the funding of State costs. Although there was some movement of States in and out of the program in 1977, the number of States and other jurisdictions participating remained high, as it has been from the inception of the program.
The cooperative program eliminated duplicate reporting by employers and provided for maximum comparability of statistics. A few classes of workers were omitted from the statistical system: State and local government employees were covered only in States that assume responsibility for enforcement of the Act, Federal employees were covered in a parallel system, and mining and railroad employees were covered on a comparable basis by other Federal agencies.
First reports covering calendar 1975 and a detailed report for 1974 were published during the year. These were supplemented by a chartbook and a series of pamphlets to help employers evaluate their own experience against industry norms. The statistics include incidence rates and estimates of occupational fatalities, nonfatal injuries and illnesses both with and without lost workdays, the number of lost workdays (days away from work and days of limited work activity separately), and other significant data by industry and size of establishment. Of the 332,000 units in the reporting sample, about 200,000 were required to provide national statistics; the rest completed the samples needed for parallel State statistics. The data appeared in the publications mentioned above, State publications, and in the President’s Report on Occupational Safety and Health.
About 1.5 million employers maintained the required records, while nearly twice as many—those with 10 or fewer employers—usually were excused. The new records included a log of recordable cases, which had provision for a running summary, and a supplementary record. Copies of forms prepared for other purposes, such as workers’ compensation reports, could be substituted for the supplementary record, and about 90 percent of the records were copies of such forms. A recordable case was defined as any work-related death or illness and any work-related injury which involved loss of consciousness, restriction of work or motion, transfer to another job, or medical treatment (other than first aid).
Arrangements were completed during fiscal 1977 for the Supplementary Data System (SDS) which gathered infor
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mation from workers’ compensation records to identify specific hazards and dangerous work situations. The system was designed to produce simple tables and to provide a capacity to explore relationships of characteristics. First data were to be available late in calendar 1977. Two-thirds of the States participated in this program.
Illnesses not known, or not recognized, as occupational were not reflected in the required records, the annual survey, or the workers’ compensation data. An interagency Health Projects Committee was established to plan, develop, and initiate projects or studies to improve current occupational illness measures. The focus of the Committee’s work was on the development of methodologies for more effective identification of occupational illnesses.
Office of Economic Growth
Projections of the economy are prepared to determine both overall economic growth as well as future job requirements and output by industry under alternative assumptions. A system of models has been developed to make medium- to long-range projections of demand, output, and employment under different assumptions about Federal Government policies and other factors. A projected input-output model estimates the effects of economic conditions and policies on job requirements by industry. These projections provide a basis for occupational projections and provide insight into the effects of alternative Federal government policies on the magnitude and industrial composition of demand and employment requirements. They assist industry and State and local governments in anticipating changing market structures and in formulating their own medium- and long-range programs.
Comprehensive projection studies were made for 1980 and 1985. The initial 1980 and 1985 projections were revised to take account of the economic decline of 1974-75 and the more restricted energy availability. Three separate projections were included, showing different rates of economic recovery through 1980. In addition, a new projection study for 1990 was nearing completion at the end of the fiscal year. This involved updating and expanding the Economic Growth System models and data base to make industry employment projections in greater detail. Work was also done on computer programs and systems to more fully integrate the models and provide quicker and more analytical projection results. In addition to the basic projection work, two
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special projects were underway. One, a study for the Federal Energy Administration, provided detailed historical and projected data in the energy sector. The second was a study for the Environmental Protection Agency (EPA) evaluating the possible use of BLS projections in an EPA environmental energy model.
Research had been underway for several years on the development of data and methods to analyze the employment requirements of major Federal government programs and policies. A Manpower Factbook was published, providing procedures to help Federal agencies estimate the employment requirements of their programs in both the public and private sectors.
Work was completed on estimating the job requirements associated with three different Federal government programs. Federal mass transit grants were examined in a case study of the job requirements associated with the construction and operation of transit facilities in the Boston area. A second study was completed in cooperation with the Department of Defense and the Arms Control and Disarmament Agency to determine the domestic job requirements created by U.S. foreign defense sales and grants. And, a feasibility study was completed at the request of the Department of Housing and Urban Development on the job requirements generated by HUD’s Community Development Block Grant-Program.
Statistical Operations and Processing
To keep pace with growing volumes of data and to ensure its accuracy, a massive effort to move most of its data processing to modern, “third generation” computers neared completion. The Bureau continued to develop its new computer language to generate computer-produced tables, transmitted electronically to photo-composition equipment, giving published tables a typeset appearance.
Statistical operations were improved by continuing research on estimation techniques for sampling and nonsampling error, as well as efficient probability sample designs to satisfy specified cost and precision constraints. Quality measurement, quality control, and operations research activities were planned for major Bureau surveys.
The Bureau continued to improve its data collection, data entry, and data transmission through electronic means to find more timely but still cost-effective means of processing massive volumes of data within a fixed time frame.
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Management Initiatives
BLS continued its efforts to improve internal managerial and administrative processes by expanding career opportunities for women and members of minority groups, improving the utilization of Bureau employees, and carefully monitoring the Government-wide career-ladder promotion system.
During the year, the number of women professionals in the Bureau increased from 360 to 395 and their representation from 27.5 to 28.5 percent of the professional workforce. The number of minority professionals increased from 172 to 194 nationwide. The percentage of employees who are minority increased from 13.1 to 14.0 percent.
In December 1975, the Bureau awarded a contract to review the findings and recommendations of an earlier ad hoc committee on underutilization in the Bureau and to develop a plan to improve the Bureau’s performance. The program was later expanded in scope, and approximately 40 percent of the employees in Washington, D.C., were covered by the process. At the end of the fiscal year, plans included a pilot application in two of the Bureau’s Regional Offices beginning in the first quarter of fiscal year 1978. This effort was expected to continue increasing supervisory and management awareness and to bring about long-range management improvements leading to better planning, better supervision and control, and better utilization of human resources.
The guidelines developed by the Bureau for careerladder promotions assured a more realistic assessment of employee performance and potential. The career ladder promotions of professional employees were carefully monitored to insure that promotions were based on merit and not simply on length of service. As a result, those who received promotions within 3 months of their eligibility date dropped from 90 percent in 1974 to 45 percent for calendar year 1976 at an estimated $200,000 a year cost savings. These savings were used to expand other Bureau programs without additional resources.
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Occupational Safety and Health Administration
^^SHA began the 1977 fiscal year with a major reorganization designed to increase emphasis on occupational health problems. Midway through the year, new leadership came to OSHA, bringing a commitment to change agency direction and to focus on serious hazards. With “The Shift to Common Sense Priorities,” announced in May, OSHA resolved to focus on serious health and safety hazards to workers; simplify regulations and eliminate unnecessary rules; and to help small businesses save money and lives.
Interagency Affairs
OSHA joined with the Environmental Protection Agency, the Food and Drug Administration and the Consumer Product Safety Commission in August to announce seven cooperative initiatives to reform the regulatory process and to improve the protection of worker and public health. In September, the four agencies entered into a formal agreement to work together to streamline regulatory processes and to maximize resources.
Field staffs of the four agencies developed cooperative workplans which considered sharing facilities, laboratories, vehicles, and libraries; examined the possibilities of increased cooperation in compliance and enforcement; and sought alternative ways to reduce the burden on regulated industries.
The areas covered by the joint initiatives included the development of compatible testing standards; risks and safety and health assessments; information sharing; research planning; regulation development; compliance and enforcement; and interagency communication, publications and public education on the regulation of toxic substances.
Simplified Recordkeeping and Reduced Paperwork
In July, the agency announced a revised and simplified recordkeeping system. The new system eliminated one form of four, consolidated two others into one, reduced and sim
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plified entries and eliminated from recordkeeping altogether employers with 10 or fewer employees. Reductions were also made in the number of employers surveyed by the Bureau of Labor Statistics, further easing the burden of paperwork. One final aspect of the new system announced but not in place by the end of the fiscal year was a proposal to permit employees access to the employer’s running log of deaths, injuries and illnesses occurring as a result of work exposures. Under the previous system, workers were permitted only to view an annual numerical summary.
Workers’ Rights
Revising a previous policy, OSHA announced that it would consider as discriminatory the failure of employers to pay employees for time spent helping with OSHA inspection activity. The agency began taking to court employers so charged with discrimination in addition to handling an increasing workload of worker discrimination cases of all other types resulting from emerging employee awareness of their rights.
Health Standards Development
The pace of health standards development continued to increase with the issuance of two permanent standards and several proposed and emergency temporary standards. In addition, informal public hearings were held on a number of proposed standards.
OSHA also was investigating “generic” approaches to standards setting, and at year end, a proposed cancer policy and procedure for regulation of toxic chemicals was announced. This cancer policy, one of the most important initiatives undertaken by OSHA, is expected to provide a consistent and expedient method for setting standards.
Proceedings begun in 1974 on the development of an occupational standard for coke oven emissions were concluded with a new permanent standard in October 1976. The standard affords thousands of employees in the steel industry protection from the potential carcinogenic hazards of exposure to these air contaminants.
The search for new energy sources, as well as increasing activity in underwater construction, subjected larger numbers of employees to higher risks in the commercial diving industry. A proposed new standard for this exceptionally hazardous occupation, not previously regulated by OSHA, was published in November 1976. Informal hearings were
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then held in New Orleans, Louisiana and a final rule was issued in July, 1977.
The continuing high incidence of byssinosis, or “brown lung,” and other respiratory diseases in the textile and other cotton processing industries prompted OSHA to consider revisions to its existing cotton dust exposure standard. The proposed revision set a lower maximum level of cotton dust to which employee exposure could be permitted, and added requirements for medical examinations of exposed employees and for training employees on the hazards of cotton dust. Hearings were held in several areas of the country to permit testimony and questioning by potentially affected persons and firms.
Public hearings were also held on standards for beryllium, sulfur dioxide, and lead, based on proposals which were published during the previous year. These hearings provided the public the opportunity to submit testimony both on the proposed standards and on the inflationary impact statements released since the standards were originally proposed.
The awareness of the cancer-causing potential of benzene and acrylonitrile resulted in OSHA initiating rulemakings on both these substances. An emergency temporary standard for benzene was issued providing immediate protection to workers after conclusive evidence was received on the link between benzene and leukemia. The emergency temporary standard was blocked by a temporary restraining order related to procedural questions which prevented enforcement of the standard. However, development of a permanent standard continued.
Public comment was invited on the options for rulemaking for a new standard on acrylonitrile after evidence showed this substance to be a potential carcinogen. Acrylonitrile is a chemical used in the production of rubber and some plastics and fibers.
OSHA reacted rapidly to evidence that a relatively common pesticide, dibromochloropropane (DBCP), carcinogenic in animals and a suspected human carcinogen, caused sterility to employees involved in its manufacture and formulation. Within a few weeks of receipt of evidence, OSHA had issued restrictive emergency temporary standards and was proceeding with the development of a permanent standard.
Work continued on developing proposals for hazardous materials labelling, chromates, silicates and abrasive blasting and several chlorinated hydrocarbon solvents, among others.
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Preparation of the final criteria continued on standards regulating occupational exposure to arsenic, lead, sulfur dioxide, cotton dust, and noise, and on the Standards Completion Project which will expand exposure limits into complete standards for some 400 toxic substances.
Safety Standards Development
The agency speeded up its efforts to revise and update job safety standards. Public meetings having been held the previous fiscal year, the safety standards staff worked throughout 1977 to incorporate those views into proposed revisions of rules covering “Walking and Working Surfaces,” “Fire Protection,” and “Storage and Handling of Anhydrous Ammonia.” Final versions of these proposals were expected early in the next fiscal year.
A final rule to protect construction employees from low voltage electric shock injuries was issued and became effective. The rule covered hand electrical tools and was designed to protect against faults in the ground circuit of such tools.
Following the lead taken by OSHA in its public meetings on walking and working surfaces and other topics, a Presidential Task Force recommended proposed revisions to the rules on “Machinery and Machine Guarding.” As with OSHA’s earlier initiative, extensive public meetings were held at the preproposal stage to obtain public views. Unlike the earlier proposals, however, the Task Force presented for comment the concept of preparing general “performance” standards rather than detailed “specification” standards. Draft proposals were being prepared using both concepts. Publication of the proposed revisions was expected early in the coming fiscal year.
Efforts began to revoke from the general industry safety and health standards those rules that no longer applied directly to employee safety and health so that employers and compliance personnel might concentrate on abatement of more serious hazards.
Enforcement and Compliance
In fiscal year 1977, OSHA inspected 59,932 workplaces for compliance with the job safety and health standards. Of these, 42 percent were general schedule (programmed) inspections, 32 percent were in response to worker complaints, three percent were accident investigations, and 23 percent were follow-up inspections to see if previously cited violations had been corrected.
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In keeping with its emphasis on serious hazards, OSHA focused 95 percent of its programmed (controllable) inspections in such high hazard industries as construction, manufacturing, transportation and petro-chemicals.
As a result of these inspections, a total of 181,942 violations of job safety and health standards were alleged. Of these, 25,517 were for serious, willful or repeat violations with resulting proposed penalties totaling $9,587,501; there were a total of 156,425 alleged violations of all other types, with proposed penalties totaling $974,056.
Comparisons between fiscal years 1976 and 1977 revealed a definite increase (from three to 14 percent of the total) in serious, willful, and repeat violations cited, with an accompanying increase of $2,825,741 in monetary penalties assessed for serious, willful and repeat violations.
Field Coordination and Experimental Programs
A new office of Field Coordination and Experimental Programs was created in November of 1976 to give systematic and coordinated program guidance and policy interpretation to OSHA regional administrators. Creation of the office represented the commitment of OSHA to insure consistent enforcement of policy from region to region.
The director of the office was appointed from among the regional staff. Staffing of the office was expected to be completed by the end of the first quarter of fiscal year 1978. In the area of special programs the Office of Field Coordination was to analyze situations involving extraordinary safety and health problems and coordinate the immediate development and implementation of programs and plans to eliminate such problems.
Consultation
On-site consultation continued as a significant contribution to OSHA’s efforts to encourage employers to comply voluntarily with the requirements of the 1970 Act. Under the Act, Federal inspectors may not offer on-site consultation services. Last year, some states with OSHA-approved job safety and health programs, plus others under federal jurisdiction, had no on-site consultation program. Therefore, during fiscal year 1977, OSHA developed new methods for offering consultative help, particularly for smaller businesses. Also, the Congress directed OSHA to expand the offer of consultation services to all jurisdictions covered by the Act and to increase the level of Federal reimbursements
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to State governments to permit expanding these programs at the State level.
To improve its consultation efforts, OSHA finalized new regulations that accomplished several important objectives, including greater clarity and program jurisdiction; expanded eligibility requirements and increased funding (90% federal share); allowance for full industrial hygiene practice, including laboratory support; and requirements for self-monitoring and professional skill upgrading.
Two states, Illinois and New Jersey, which did not have OSHA-approved plans for conducting their own enforcement programs, entered into agreements with OSHA to offer on-site consultation. That brought the total non-plan states with such arrangements to 15.
After January 1978, all states expected to participate in the 90 percent funded program were to have signed their agreements. Any remaining states that did not offer on-site consultation either through an approved plan or through separate contract, were to be serviced through contracts with alternate delivery means such as universities, private consultation firms, and community colleges.
OSHA also contracted for private delivery of consultation services to foundries in non-participating states. The contract totaled $1.3 million for top quality consultants and continued into FY 1978.
Training, Education and Information
Top priority was given to upgrading the skills of OSHA compliance officers overall and to increasing the health hazard recognition abilities of compliance personnel.
A three-year program of training and professional development for health inspectors was implemented in 1977. This program was aimed at new personnel with the necessary academic qualifications recruited at the entry-level grades. A similar program for safety inspectors was developed and was to be implemented at the beginning of the new fiscal year. Also, a two-week health training program for safety compliance officers, included as part of the three-year safety compliance officer training program, was provided throughout the year.
To increase the training and upgrade the professionalism of compliance officers, plans were completed during the year for moving the OSHA Training Institute in Rosemont, Illinois, to larger facilities in Des Plaines, Illinois, in No
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vember 1977 to provide better facilities for training and to accommodate more students.
In 1977, OSHA began work on developing a more definitive policy for providing training and education programs for employers and employees in the recognition, avoidance and prevention of unsafe and unhealthy working conditions. Federally-sponsored or assisted education programs continued throughout the year, including contracts with the University of Wisconsin School for Workers; Building and Construction Trades Department, AFL-CIO; American Industrial Hygiene Association (through five university occupational health centers); American Association of Community and Junior Colleges (through 17 community and junior colleges); and the University of California at Berkeley.
Free occupational safety and health hazards consultation was provided to primarily small and medium-sized business establishments through the contract with the American Industrial Hygiene Association and an extension to the contract with the American Association of Community and Junior Colleges. All five of the university occupational health centers in the American Industrial Hygiene Association contract provided consultation, and two of the junior and community colleges in the American Association of Community and Junior Colleges contract provided this service.
These consultation programs augmented authorized onsite consultation conducted by State personnel in States where occupational safety and health programs were administered by OSHA.
A new contract with the International Brotherhood of Painters and Allied Trades, AFL-CIO, provided for the development of occupational safety and health training packages for the painting industry.
OSHA announced wide availability of a new handbook specially designed to help small businesses. The “Handbook for Small Business” presented in clear terms an organized approach to solving safety and health hazards problems. The booklet was first tested under the earlier program, modified, and then prepared for issue by the time the agency’s new priorities were announced. With the help of trade associations and other interested groups, OSHA printed and distributed several million copies of this booklet by the end of the fiscal year.
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Federal Agency Programs
OSHA placed a federal agency coordinator in each of its ten regional offices. They devoted full time to assisting Federal agencies with the operation of occupational safety and health programs, provided assistance in training, inspections, complaints and evaluations programs, and lent support to Field Federal Safety Councils.
OSHA regulations were recognized and the larger agencies were making significant efforts to study potential hazards and determine how working conditions could be improved, particularly in construction. Larger agencies were conducting thorough professional inspections in hazardous substances.
Safety awareness campaigns in 1976 centered on the “Safety 76” campaign, designed to stimulate agencies to institute timely and effective preventive programs. The topics highlighted in 1976 were “Federal Health Hazards Awareness” and “Federal Fire Prevention Awareness.”
A wide range of training and education programs were made available to Federal agency personnel through the OSHA Training Institute, National Safety Council and other sources. The Office of Federal Agency Safety Programs and OSHA’s Training and Education Office developed and offered several courses designed specifically for Federal agencies. These included: A six-to-eight hour illustrated office safety course and a 40-hour training program for collateral duty safety personnel.
The Office of Federal Agency Programs developed three new federal safety and health rules during the year: Training Guidelines; Field Federal Safety and Health Councils; and Evaluation Guidelines. All have been approved by the Federal Advisory Council on Safety and Health and were published in 1977. The advisory council held one national and four regional conferences and developed four new programs for Field Federal Safety Councils to be started in 1977.
State Programs
One of the avenues open to a State wishing to participate in achieving the goals of the 1970 Act is provided in Section 18 of the law. This section sets forth the criteria which a State must meet in seeking approval from the Department of Labor to administer and enforce its own safety and health program. Although the State plan may not fully meet all the criteria upon submission, the State must pro-
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vide assurances that it will meet them within a three year period following approval and beginning of the program’s operation. After this initial period has ended, and the plan has operated effectively for at least one year, the Assistant Secretary may confer Federal enforcement authority on the State in those areas covered by the plan and for which State performance is at least as effective as the Federal Program. State safety and health standards under approved plans must keep pace with OSHA standards, and State plans must guarantee employer and employee rights as does OSHA.
OSHA’s monitoring system works to assure that the state meets the plan commitments and that the program continues to be as effective as the Federal program. The monitoring system uses State quarterly statistical reports covering their enforcement activities, public input through investigation of CASPA’s (Complaints About State Program Administration), and other OSHA monitoring activities including case file reviews, spot check visits, and accompanied visits.
In August 1977, the Puerto Rico plan was approved, bringing the total number of currently approved plans to 25. States with OSHA approved plans were: Alaska, Arizona, California, Colorado, Connecticut, Hawaii, Indiana, Iowa, Kentucky, Maryland, Michigan, Minnesota, New Mexico, Nevada, North Carolina, Oregon, South Carolina, Tennessee, Utah, Vermont, Virginia, Washington, Wyoming, the Commonwealth of Puerto Rico, and the Virgin Islands.
Five states (Alaska, California, North Carolina, Utah and Vermont) were certified during the fiscal year as having completed their developmental steps.
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Employment Standards Administration
I he four offices of the Employment Standards Administration (ESA), the Office of Federal Contract Compliance Programs (OFCCP), the Office of Workers’ Compensation Programs (OWCP), the Wage and Hour Division (WHD) and the Women’s Bureau (WB), undertook major efforts to improve the administration and enforcement of employment standards laws protecting American workers during fiscal year 1977.
ESA revamped the OWCP to upgrade delivery of benefits under the three federal workers’ compensation programs; directed outreach programs toward Indian women, women offenders, women in rural areas, mature women and female youth, groups not easily reached through ordinary channels of communication, and stepped up enforcement of federal contractor equal employment opportunity and affirmative action requirements.
ESA also found back wages due under fair labor standards law to a record number of workers, developed new proposed regulations for hiring minorities and women in federal and federally assisted construction work, and promoted more opportunities for women in nontraditional jobs.
Workers’ Compensation
The Office of Workers’ Compensation Task Force, which began operation on June 1, 1976, issued its recommendations for improving operations under the three federal workers’ compensation programs, particularly regarding more timely delivery of services.
For the federal employees’ compensation program, the task force presented nearly 40 specific proposals in 12 broad areas, including vocation and medical rehabilitation, medical and claims adjudication, litigation and appeals processes, and management information.
Proposals under the longshore program included investigating the shipbuilding industry’s reporting practices for employee injuries; a study determining the mechanics of set
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ting insurance rates for employers, and legislative initiatives to eliminate certain inconsistencies and oversights in the act. Many of the unresolved questions of jurisdiction were settled by the Supreme Court ruling that the act covers shoreside workers.
Task force recommendations for the black lung program ranged from areas of organizational structure to medical research with special emphasis on reducing the time required to process a claim.
Many of the proposals under the three programs were implemented during fiscal year 1977.
Under the Federal Employees’ Compensation Act, ESA established two new district offices (Atlanta and Dallas) to bring direct service to those major regional centers. It provided greater and improved technical assistance to employing agencies, ensuring quick and accurate completion of forms and timely submission to OWCP.
ESA made changes in key supervisory positions around the country to stengthen management and direction and began to hire an additional 123 claims examiners and support staff nationwide. A comprehensive review of the periodic roles to confirm the eligibility of all claimants was conducted, and an investigative unit which, when at full strength, will consist of 20 professional investigators around the country to eliminate filing of fraudulent claims was established.
ESA trained claims examiners to be specialists in specific injuries and diseases and implemented a procedure to expedite the screening and payment of medical bills. It pilot tested a system to reduce the timelag on referral of cases to rehabilitation specialists. ESA also conducted a study on changes that may be needed in the FECA benefit structure to assure that benefits are equitable and that positive incentives are provided for claimants to undergo vocational rehabilitation and return to work. The conversion of the FECA claims processing system to an automated data processing system began.
Under the Longshoremen’s and Harbor Worker’s Compensation Act, ESA updated chapters of the procedure manual concerning informal and formal adjudicative procedures, medical supervision and mail handling. Subsequent to the Supreme Court case involving shoreside coverage, ESA issued guidelines to the district offices on coverage issues for the sake of consistency of administration. It hired nine new rehabilitation specialists for a system of early re
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ferral for rehabilitation services and developed procedures to help disabled employees return to their former jobs or be trained for work within their physical limitations.
An extensive study of insurance availability and rates under the act was begun to consider remedial actions or to suggest legislative changes, and training courses were developed for claims examiners to be implemented during fiscal year 1978. ESA successfully reduced the inventory of pending case actions on active Longshore Act cases in the district offices.
To reduce the claims inventory under the Black Lung Benefits Act and the time required to process claims, ESA reorganized the Division of Coal Mine Workers’ Compensation and streamlined claims development procedures to process claims in fewer than 120 days. ESA also installed an on-line data system to apply sophisticated automation techniques to claims tracking and control and provided speedier retrieval of information on individual claims. It also met with panels of doctors to discuss new technological developments for diagnosing pneumoconiosis.
A total of 207,615 injuries was reported under the Federal Employees’ Compensation Act during the year, up from the 191,172 reported in fiscal 1976. New claims for compensation were 30,301, down from 40,324 in fiscal 1976. At the year’s end, 45,216 cases of long term duration were being compensated on the OWCP periodic payment rolls, up from 42,401 in fiscal 1976.
Benefits paid under the Federal Employees’ Compensation Act amounted to $552,084,529 or 15.7 percent more than the previous fiscal year.
New injuries reported during the year under the Longshoremen’s and Harbor Workers’ Compensation Act and its various extensions increased to 235,388, up from 225,270 in fiscal 1976. Reports of lost-time injuries increased from 48,303 in fiscal 1976 to 51,981 in 1977. The changes continue to reflect changes brought about by the 1972 amendments to the act extending coverage to workers performing maritime work at land installations adjoining and used in connection with maritime activities. During fiscal 1977, 96,180 or 53 percent of maritime injuries reported were covered by this extension of the act.
On June 17, 1977, the U.S. Supreme Court upheld workers’ compensation awards under the Longshore Act to longshore workers injured while working in shoreside areas. This opinion clarified to a large degree the jurisdictional is
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sues which had existed in the program since the 1972 amendments, resulting in more prompt payment of benefits for those employed in waterfront areas.
Maximum benefits increased under the Longshore Act on October 1, 1977, from $342.54 per week to $367.22 per week, representing 200 percent of the national average weekly wage applicable for both periods.
A total of 19,606 black lung claims was reported under the Federal Coal Mine Health and Safety Act (black lung program) in fiscal year 1977. The OWCP denied 22,500 claims and approved 1,600. Benefits paid under this program amounted to $21,375,726, of which $2,524,778 was for medical benefits.
Increasing Job Opportunities
The Office of Federal Contract Compliance Programs (OFCCP) undertook a determined effort to strengthen enforcement of equal employment opportunities for minorities, women, handicapped persons and certain veterans.
Increased enforcement of Executive Order 11246 resulted in debarment of three contractors. At the close of the fiscal year, administrative action was pending against eight other companies, and four other enforcement cases were pending in the courts.
In the handicapped worker program, individual complaints totaled nearly 2,000. Back pay settlements totaled more than $286,300 to 82 handicapped workers. Under the veterans’ program 433 individual complaints were received. Back pay settlements totaled nearly $55,000 to eight veterans. These were the first back pay cases settled under the program. In addition, nearly 2,000 mandatory job listing violations were received.
To increase the enforcement capability of compliance staff, OFCCP implemented a compliance officer training course. By the end of fiscal 1977, more than 500 compliance officers from the federal compliance agencies had completed the initial two-week training course. OFCCP began to pilot an advanced course in November.
The Labor Department reduced the number of compliance agencies responsible for enforcing Executive Order 11246 from 16 to 11, facilitating more efficient and effective investigations. The compliance agencies conducted approximately 16,600 reviews of federal contractors—8,000 reviews of supply and service contractors and 8,500 of construction contractors.
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Regulatory reform within OFCCP moved ahead on two fronts. In line with the draft regulations under Executive Order 11246 published in the Federal Register in September 1976, existing regulations were modified in January, increasing coverage by cumulation of contracts over a 12-month period, and cumulation of bills of lading to $50,000 for a 12-month period for purposes of a written AAP requirement.
OFCCP also developed and published a new set of nondiscrimination and affirmative action regulations designed to increase equal employment opportunity for women and minorities in the construction industry. Implementation is planned after comments on the proposal h^ve been thoroughly analyzed.
The OFCCP also began to more closely coordinate its activities with other departmental agencies. For example, in the employee selection and testing area, the Department of Labor joined the Department of Justice and the Civil Service Commission in issuing the Federal Executive Agency Guidelines on Employer Selection Procedures. The Equal Opportunity Commission republished its own testing and selection guidelines. OFCCP renewed efforts to reconcile remaining differences among the agencies, and by the end of fiscal year 1977, a tentative agreement was reached and a new proposal was scheduled for publication in early fiscal year 1978.
A special task force was formed to analyze OFCCP operations and to make recommendations for improvements. Issued in September, the task force report contained 30 broad-based proposals for upgrading program operations and improving enforcement. After a suitable comment period, many of the proposals were scheduled for implementation during fiscal year 1978.
To promote the entry of more women into nontradi-tional jobs, the Women’s Bureau worked with the Bureau of Apprenticeship and Training (ETA) on the New Initiatives in Apprenticeship Program to increase the number of women in apprenticeship training. Working with the National Automobile Dealers’ Association, the Bureau explored ways to recruit women for the new apprenticeship program for automobile mechanics.
The problems of low-income women were highlighted in a series of consultations to carry out Phase I of the Women’s Bureau project on employment issues of low income women. In an effort to continue to encourage women’s
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organizations to get involved in Comprehensive Employment and Training Act (CETA) planning and policy-making, the pamphlet “A Guide To Seeking Funds From CETA” was updated and widely distributed. The bureau also conducted a survey of CETA programs that specifically serve women and drafted two models on effective CETA-funded training and employment programs for replication.
Through the Intradepartmental Coordinating Committee for Women, the Bureau worked closely with agencies in the department to see that their programs serve the needs of women workers. For example, the Occupational Safety and Health Administration was urged to investigate and take action to correct the special safety problems women face in the workplace.
Protecting Wages
Enforcement of federal wage and hour laws during the year resulted in the disclosure of back wages due to more workers than in any previous year in the 39 years of Fair Labor Standards Act (FLSA).
Almost 55,000 compliance actions by the Wage and Hour Division’s compliance officers disclosed $88.4 million in unpaid wages under the federal minimum wage and overtime law in fiscal year 1977. Of this amount, $37.2 million was found to be due 371,000 employees for minimum wage violations and $51.2 million was found to be due 265,744 employees for overtime violations. Approximately $20 million was paid by employers to 266,000 workers for minimum wage violations and about $33 million to 215,000 workers for overtime violations.
The difference between the amounts found and paid occurs largely because of cases in which employers refused to pay and which were considered unsuitable for litigation by the department. In these cases, complainants are advised of their right under the FLSA to bring a private suit to collect the back wages due, plus an equal amount in liquidated damages, as well as attorneys’ fees and court costs. Wages recovered in private employee suits are not reflected in the Wage and Hour Division’s statistics.
In a pilot program of targeted investigations, the regional and area offices were asked to conduct one thousand FLSA investigations of establishments believed to employ undocumented workers.
An effort to key labor standards investigations to areas thought to be impacted with undocumented alien workers
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would deny employers the economic incentive to hire such workers and provide a basis for gauging the impact of undocumented aliens on the nation’s workforce.
Amendments to the FLSA were passed by Congress, increasing the minimum wage to $2.65 an hour effective Jan. 1, 1978. Subsequent increases are scheduled until the minimum wage reaches $3.35 an hour beginning on Jan. 1, 1981.
Back wages found due for construction workers under government contract labor standards laws—the Davis-Bacon and Related Acts and the Contract Work Hours and Safety Standards Act—increased 125 percent in fiscal year 1977 to $4.1 million. Of this amount, $2.9 million was restored.
During the year ending Sept. 30, 1977, the Wage and Hour Division found over $4.0 million in underpayments due to approximately 25,000 workers under the Service Contract Act, the Walsh-Healey Public Contracts Act and the Contract Work Hours and Safety Standards Act as it applies to service workers on government contract jobs—a substantial increase over the previous fiscal year. Of this amount, $2.8 million was restored.
The increase in findings under both government contracts laws was due to a special emphasis ESA placed on these programs. Because the number of complaints about illegal payment of wages by federal contractors is smaller than complaints filed under other wage and hour programs, the Wage and Hour Division initiated investigations of many companies where violations were suspected.
In fiscal year 1977, 15,875 wage determination decisions were issued pursuant to the Davis-Bacon and Related Acts. Of this total, 13,693 were project determinations and 2,182 were general determinations. This compares with 11,398 project determinations and 1,743 general determinations issued in fiscal 1976. General determinations are published in the Federal Register and may be used by any contracting or assisting agency with an appropriate project. Project determinations are issued to the contracting agency, in response to a request, for projects in areas not covered by a published determination.
Davis-Bacon wage determinations procedures were being automated during the year. The Davis-Bacon Information System was planned to be operational in the summer of 1978 to be the core system for the department’s new construction information program. The automated system was designed to enable the Wage and Hour Division to conduct many more surveys resulting in more accurate
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and up-to-date determinations.
Under the Service Contract Act, prevailing wage and fringe benefit predeterminations were requested by federal agencies for 34,457 covered contracts, a 29 percent increase over the number requested in FY 1976. Adjustments to the changed fiscal year, a greater awareness of the act’s requirements by procurement offices and a continuing expansion in service contracting activities accounted, in large part, for the increase. Determinations setting wage and fringe benefit standards for a wide variety of job classifications were applied to 25,707 contracts or about 75 percent of all federal service contracts awarded during the fiscal year.
Compliance actions by the Wage and Hour Division under the Age Discrimination in Employment Act disclosed over 2,660 persons between 40 and 65 who were victims of illegal age discrimination in fiscal 1977. A total of $8.9 million was found due to 1,707 older workers and $2.7 million was restored to 744 persons. First-year future benefits (wages, pensions, health and life insurance payments, etc.) obtained as a result of enforcement efforts by the division and litigation by the Solicitor of Labor were projected to exceed $4.3 million to over 1,150 persons. Job opportunities made available to older workers as a result of agreements by employers, employment agencies and labor organizations to eliminate age discriminatory practices numbered 14,585.
The number of major cases in litigation was increasing steadily and involved many millions of dollars in wage losses affecting several thousand persons, primarily as a result of involuntary retirements, terminations and refusals to hire. Cases filed during the fiscal year include suits against American Motors, Chrysler Corporation, Hartford Fire Insurance Company, A & P and Howard Johnson.
Under the Equal Pay Act, $15.5 million was found due to 19,382 workers, nearly all of them women. This compares with $17.9 million found due in fiscal year 1976 to 24,610 employees. A total of $6.7 million was restored to employees in fiscal year 1977.
Several major equal pay cases were in litigation at the end of the year, including that involving the National Kinney Corporation, which could have resulted in the largest amount of money paid from a court action under the act to date. Another important case involved Memphis State University, the first of the department’s suits under the Equal Pay Act involving academic professional employees to go to trial.
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The approximately 1,000 Wage and Hour compliance officers operated out of 300 field and area offices to check for equal pay and age discrimination violations in the 60,000 establishments visited during the year. Thus, investigations originally focusing on a different type of complaint could be broadened to include possible equal pay and age discriminations violations.
During fiscal year 1977, ESA’s Wage and Hour Division found 16,021 minors employed contrary to the child labor provisions of the FLSA, an increase of 50 percent over the previous fiscal year. The number of minors found employed in nonagricultural occupations declared hazardous by the Secretary of Labor increased slightly from 2,994 in fiscal 1976 to 3,152 in fiscal 1977. There was a decrease, however, in the number of minors found employed in agricultural occupations declared hazardous from 94 in fiscal 1976 to 31 in fiscal 1977.
Under the child labor civil money penalty provision of the act, penalties amonting to nearly $1.3 million were assessed against 1,130 employers for illegally employing 7,952 minors.
The Work Experience and Career Exploration Program (WECEP) continued to aid 14 and 15-year-old minors in their transition from school to work in 22 states and the District of Columbia, and 19,564 certificates were issued permitting employers to employ full-time students at not less than 85 percent of the federal minimum wage. These certificates provided 348,302 employment opportunities.
Employment of handicapped workers with impaired productive ability in sheltered workshops under special minimum wage certificates continued to expand. A total of 156,475 workers were employed in sheltered workshops at the close of fiscal year 1977 compared with 145,442 the previous fiscal year. Total employment of handicapped workers under certificates at the close of fiscal year 1977, including employment in sheltered workshops, in competitive industry and in hospitals and institutions, was 163,936.
The Wage and Hour Division developed new management techniques to maintain tighter control over the status of cases under investigation in the field. The division also instituted a periodic listing of cases in the department’s Office of the Solicitor for their review and possible action. Both systems helped to ensure that all cases were resolved without unnecessary delays.
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Farm Labor Contractor Registration
(Public Law 93-518, as amended, requires the Secretary of Labor to report on provisions of this Act in the Annual Report of the Secretary.)
To achieve a greater level of compliance with the Farm Labor Contractor Registration Act (FLCRA), wage-and-hour enforcement personnel were trained on newly developed procedures that delineate the division’s position regarding different sections of the statute, taking advantage of recent interpretations involving various provisions of the act. This allowed a more comprehensive application of the FLCRA and produced more efficient and responsive compliance actions.
Areas of the statute which received particular attention during the year included inspection of housing for farmworkers to ensure that it met standards for safety and health and checking farm labor contractors for utilization of undocumented workers. The FLCRA was the only federal law prohibiting an employer (the farm labor contractor) from using undocumented or unauthorized alien workers.
Special emphasis was given to identifying and investigating the contractors having repeated, serious violations in areas where they were most concentrated. A new computerized tracer list was developed to identify recurring violations and show where injunctions were in effect, as well as to record all completed investigations. The tracer system was designed to permit fuller statistical reporting of investigative findings and to assist in developing contempt cases.
The public central registry—containing the names and addresses of all registered farm labor contractors and farm labor contractor employees, who act as agents of contractors—was fully computerized and was published once each month by the Wage and Hour Division. The division maintained a mailing list of subscribers, and registry information was also available through the Federal-State Employment Service.
The Department entered into federal-state agreements with New Jersey and Florida to utilize the facilities and services of agencies in those states for the registration of persons under the Act. Florida-based farm labor contractors constituted approximately 40 percent of all registrants. The assumption of responsibility for their registration by the State of Florida made a significant impact on total registration activities performed by WHD personnel.
To facilitate the transition from federal to state level,
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detailed procedures for registering farm labor contractors and for training state personnel were prepared for presentation to those states entering into these agreements.
Farm labor contractor registrations continued to increase. In fiscal year 1977, 7,775 farm labor contractors were registered and 4,060 of their full-time or regular employees (who act as agents) were issued identification cards for a total of 11,835 registrants, compared to 10,942 in fiscal year 1976. About 45 percent of the registrations of farm labor contractors and their agent employees were in Department of Labor Region 4, which includes Alabama, Florida, Georgia, Kentucky, Mississippi, North and South Carolina, and Tennessee; 30 percent were in Region 6, which includes Arkansas, Louisiana, New Mexico, Oklahoma, and Texas, and 19 percent in Region 9, which includes Arizona, California, Guam, Hawaii and Nevada. The estimated total number of workers in registered crews in 1977 was over 300,000.
A total of 2,327 investigations was conducted in fiscal year 1977. Investigations were integrated to include growers, canners, processors, packing shed operators or other users of farm labor contractors’ services, as well as any farm labor contractor employees found operating as agents of their employer during investigations of the contractors. The Wage and Hour Division sought to achieve greater compliance with the provisions of the Act through more efficient utilization of the compliance officer’s time in the integrated investigation approach. Approximately 67 percent (1,564) of the investigations disclosed violations of one or more provisions of the law, and 1,096 violations involved farm labor contractors and their full-time or regular employees (805 and 291 violations, respectively); the remaining 468 involved the users of farm labor contractor services. Most of the user violations involved employing unregistered farm labor contractors or infractions of the recordkeeping requirements, while those of farm labor contractors and their employees were more diverse. They involved such activities as failure to register; failure to post the terms and conditions of employment; failure to disclose to workers at the time of their recruitment the area of employment, the crops and operations on which they would be employed, wage rates, period of employment, information on transportation, housing, and insurance (which the farm labor contractor is required to provide), and any charges to be made by the contractor; employing undocumented aliens, and failure to
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provide proper vehicle insurance or providing unauthorized transportation.
Over $500,000 in civil money penalties were assessed in 600 cases. Recommendations for administrative action were received from Wage-Hour regional offices in 176 additional cases. These resulted in 90 final orders of the Secretary for revoking certificates previously issued, refusing to issue new registration certificiates or ID cards, or refusing to renew some and suspending of other such registrations.
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Office of the Assistant Secretary for Administration and Management
Under the direction of the Office of the Assistant Sec-retary for Administration, the Department successfully imple-plemented the presidentially mandated Zero Base Budgeting (ZBB) process in formulating the Department’s 1979 fiscal year budget request. In order to establish a more direct link between performance and budget activities, the Program Operational Planning and Management by Objective systems were integrated into the ZBB process.
During the year, activity at the executive staffing level was quite extensive. With the change in Administration there followed within the Department an almost complete turnover of presidentially appointed executives and noncareer officials. At the executive level, 14 of 15 officials were replaced, and 15 non-career officials also vacated positions. Under the executive assignment system, 23 new appointments, 15 reassignments and 11 promotions were effected.
In education and career development, the Department continued to provide opportunities for individuals at all grade levels. For example, 67 executive development seminars were conducted in Washington, D.C., and the field; nine seminars were conducted for employees at grades GS-15 and above; and over 1,200 employees participated in some 67 professional and supervisory seminars. A significant number of program successes were achieved by the Administrative, Clerical and Technical (ACT) program, including measured improvement in present job skills and increased numbers of participants qualifying for better jobs. The results of the ACT program were particularly gratifying since over 47 percent of those eligible, some 2,300 of 5,000 employees, have enrolled. The Department’s new Upward Mobility Program was implemented in the regional offices. A total of 103 positions were targeted to be filled through that program.
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Significant strides were made in the Department’s Equal Employment Opportunity (EEO) program.The Federal Women’s and Hispanic programs were designated “high priority objectives” by the Secretary. Among the achievements were a reduction by 70 days in complaint processing time, EEO training seminars for 595 supervisors, appointment of 108 new EEO counselors, and 1,831 people counseled. Other noteworthy achievements were the promotion to grades 13-15 of women in the national office and blacks in the regions, and to grades 14-15 of blacks in the national office comparable to their representation in the workforce.
Employee occupational safety and health programs were substantially expanded and improved during the year. Safety and health program evaluations and facility surveys in nine regions, 30 area offices and 10 Job Corps centers were completed. An Occupational Safety and Health Guide for Supervisors was published. Health services coverage was extended to eight field locations to assist in implementing an effective safety and health program for Department employees and Job Corps enrollees and eight new positions were established in the regional offices.
Stronger Departmental guidelines on the acquisition and documentation of automatic data processing (ADP) systems were established to help keep down the rising cost of equipment and services. An additional IBM 360/65 computer was installed on an interim basis to support the Department’s data processing requirements until a new computer system is installed in September 1978.
The Department continued to grant procurement awards to small businesses and minority firms, enabling them to receive a fair share of awards. Placement of grant fund advances in minority owned banks was also emphasized.
During the year OASAM issued 579 audit reports covering $3.8 billion in expended Federal funds of which $70.6 million was questioned. In the interest of eliminating duplication or overlap by various levels of government, 30 agreements were negotiated with State and local audit agencies to perform audits of CETA prime sponsors, and the comprehensive audit guides for use in auditing CETA and Indian and Migrant programs were completely revised. The number of unresolved audit reports at the end of fiscal 1976 was reduced by 43 percent. A total of 332 indirect cost rates were negotiated and approved which resulted in cost savings of $6.0 million for the Department, and $7.9 million for the
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Federal Government. A regional cost determination capability was established providing assistance in the preparing cost allocation plans, reviewing proposed plans, and applying negotiated rates.
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Labor-Management
Services Administration
The Employee Retirement Income Security Act of 1974 continued to be a major focus of public attention, and an important part of Labor-Management Services Administration (LMSA) activities, during the 1977 fiscal year. LMSA’s Office of Pension and Welfare Benefit Programs continued to work closely with the Internal Revenue Service and the private sector to keep paperwork down and make it easier for the public to comply with the law. The Chicago Construction Coordinating Committee was transferred into LMSA to provide support services to the new Secretary’s Committee on the Construction Industry. Labor organizations reporting under the Labor-Management Reporting and Disclosure Act (LMRDA) numbered 53,675. Of the 5462 LMRDA investigations that were completed, 179 involved union elections. LMSA services for federal labor-management relations showed increases in 1977. Changes in military needs and in the economy resulted in reduced demand for LMSA services to secure the reemployment rights of veterans, reservists and National Guard members during the year. Fiscal 1977 was a heavy year for collective bargaining, and LMSA served the Secretary of Labor in this area and provided labor-management relations assistance to non-federal governments and organizations of their employees. Other activities included information services furnished construction industry and union negotiators and activities to secure the rights of workers affected by federally-assisted mass transit projects.
Pension and Welfare Benefit Programs
The plan descriptions of 628,000 employee benefit plans were on file with the department under the Employee Retirement Income Security Act of 1974 (ERISA) at the end of the 1977 fiscal year. Also on file were 524,000 annual reports for the 1975 plan year, 236,000 annual reports for the 1976 plan year, and 40,000 summary plan descriptions.
During the year a series of regulations, proposed regu
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lations, and exemptions were issued. A slide presentation on the annual reporting requirements was prepared and presented to 5,788 administrators of small plans. A total of 2,071 investigations under ERISA were completed as of September 30, 1977, and the department referred 79 cases for civil action under ERISA by the end of the fiscal year.
Compliance, Enforcement
There were 53,675 active labor organizations with reports on file under the Labor-Management Reporting and Disclosure Act (LMRDA) as of September 30, 1977. LMSA completed 5,462 LMRDA investigations during the year, including 179 involving union elections.
The department instituted 50 civil actions under the Act in Federal District Courts, including 42 involving union elections and 8 to compel the filing of reports by unions and others. Forty-two individuals were charged with criminal violations of the LMRDA in indictments or criminal informations filed in Federal District Courts, including 9 as a result of LMSA participation in Organized Crime Strike Forces in 12 major cities. Thirty-four persons, including some indicted in previous years, were convicted of LMRDA violations. Two were acquitted and LMRDA charges against 3 others were dismissed.
LMSA received annual financial reports required under the Standards of Conduct Section 18 of Executive Order 11491 from 2,948 active federal labor organizations. Of the 632 Standards of Conduct investigations LMSA completed during the year, 14 involved federal union elections and 584 delinquent and deficient reports.
Federal Labor-Management
During the year, 1,658 cases involving representation petitions, unfair labor practice complaints and grievancearbitration applications were initiated in LMSA’s 24 area offices; 1,673 cases were closed, and 342 representation elections were supervised by LMSA field personnel. The assistant secretary issued 190 decisions based upon records of formal hearings conducted before hearing officers or administrative law judges and made determinations on 207 requests for a review of actions taken by LMSA regional administrators.
Veterans’ Reemployment Rights
The department continued to meet its responsibilities to veterans, National Guard members, reservists and rejectees
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having statutory reemployment rights.
Complaint cases filed during fiscal 1977 declined to 2,613 from 2,886 the year before as a result of a decline in total separations from military service. The apparent proportion of separatees who left employment to perform military service remained constant at 36 percent. Cases in which reemployment itself was the primary issue, as distinguished from the more complex ones primarily involving rights after reemployment, amounted to 46 percent of the total as compared to 55 percent the year before. The proportion of cases filed that came from states and local government employees stabilized at about 10 percent. The most significant change, reflecting the country’s increased reliance on the reserve forces, was an increase in the proportion of cases filed by National Guard members and reservists who left their jobs to perform military training. This percentage increased to 31 percent from 19 percent the year before. During fiscal 1977, as a result of continuing improvement in field staff expertise and program specialization, cases that had to be referred to the Department of Justice for consideration of litigation declined to 193, or 8 percent of total cases closed, as compared to 256, or 9 percent, the year before.
The reemployment rights information procedure for new veterans, conducted in cooperation with the Department of Defense, continued, though at a somewhat lower level, again reflecting the decline in total separations from military service. In fiscal 1977, some 231,000 separatees participated in this procedure, compared to some 274,000 in fiscal 1976. These separatees were provided with basic reemployment rights information and assistance, as well as information about other services available to veterans through the department. Copies of the referral forms that the Office of Veterans’ Reemployment Rights (OVRR) received from the military separation centers were supplied by OVRR to the Veterans’ Employment Service of the Employment and Training Administration for its use in contacting the veterans to offer them assistance in finding employment if they did not have, or choose to exercise, reemployment rights with preservice employers. If the form indicated a preservice employer, as was the case with 36 percent, or some 84,000, OVRR also used a copy of the form to send general information on the reemployment rights law to that employer. Most new veterans seeking to exercise reemployment rights were reinstated in their jobs and accorded their other reemployment rights without having to file a complaint case.
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Labor-Mangement Relations
The Labor Department continued its policy of encouraging resolution of labor-management disputes with a minimum of direct participation. This policy was followed in negotiations in the petroleum, steel, aluminum, non-ferrous metals, communications, and East and Gulf Coast longshore industries.
A five-day strike against seven shipping companies was halted after the assistant secretary of labor personally entered the talks and assisted the parties in reaching an agreement.
“Early warning” reports covering negotiations which could affect the national interest were provided to the Secretary and other key government officials.
The department continued its program of assistance to state and local governments and public employee organizations to establish procedures for resolving labor-management relations problems. Upon request, the department provided technical assistance, information and data services, and training and conference activities to the participants in the non-federal public sector. It conducted special training seminars for newly appointed Public Employee Relations Board members, for labor and management representatives, and for third party neutrals. It also provided technical assistance to a number of state and local jurisdictions in drafting public employee rules and regulations and in conducting representation elections.
The Urban Mass Transportation Act of 1964 provides that the secretary of labor certify that arrangements are made to protect the interests of employees affected by urban mass transportation projects assisted by the Department of Transportation. In the 1977 fiscal year, the department certified 766 applications for assistance under the Act, involving projects totaling some $5 billion. Similar responsibility was carried out under a number of other federal statutes.
The Division of Construction Industry Services continued maintaining Construction Industry Stabilization Committee wage data bank and providing the national contractor associations and the national construction unions with comprehensive information concerning negotiated wage settlements in the industry.
Planning, Evaluation, Management Information and Systems
The activities of the Office of Planning, Evaluation and Systems centered on the introduction of “zero-based budget
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ing” to the agency and the preparation of the first budget based on this new process.
LMSA, in its efforts to evaluate the effectiveness and efficiency of program operations, continued its contract evaluation of the training and technical assistance activities provided to non-federal public sector employees and organizations. It also awarded contracts for an evaluation of the delivery of LMSA field services, a study of the impact of the Veterans’ Reemployment Rights Program and the design of a pilot data base for the Construction Coordinating Committees. In-house studies undertaken during fiscal 1977 included an issue identification study concerning the Veterans’ Reemployment Rights Program and an evaluation of the impact of the recent Supreme Court decision on the computation of veterans’ pension benefits.
Work continued on refining and extending LMSA management information systems to better respond to program and field managers’ needs. Support of the Pension and Welfare Benefit Program was primarily concerned with continued operation and modification of the benefit plans report processing subsystem to meet the needs of research, enforcement and public disclosure. Coordination of data needs with the Internal Revenue Service continued.
Policy Development and Research
The most significant policy development this year in policy development and research was the introduction of the Administration’s proposed amendments to the National Labor Relations Act. This legislative proposal was designed to eliminate delays in legal proceedings, provide more effective remedies for victims of unlawful activities and assure workers the right to make free and uncoerced decisions on issues of union representation.
Legislative developments in the labor-management relations area were monitored continuously throughout the year. Weekly reports on legislative and related developments of interest to LMSA were prepared for the assistant secretary and other officials of the agency, and special reports were prepared on important issues. Recommendations were formulated in response to over 100 requests, mostly from the Congress and OMB, for departmental positions on administrative and legislative proposals, including a number of important labor-management relations issues.
Legislation to replace the Executive Order governing employee relations in the federal service, the extension of
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federal labor relations law to farmworkers and the protection of workers adversely affected by various governmental and private actions were among other important policy issues studied.
Research activities were undertaken in support of the assistant secretary’s role in administering the laws and Executive Order within LMSA’s jurisdiction, and in promoting knowledge and understanding of labor relations and the collective bargaining process.
The research staff completed a number of studies related to the administration and enforcement of the LMRDA, including a summary of national union election procedures and election timetables which is updated and revised on a monthly basis. In connection with policy issues of current importance to the department, studies of agricultural labor relations and collective bargaining in the health care industry were also undertaken.
In addition to conducting in-house research studies, LMSA also contracts with other agencies and outside researchers for research in labor relations and the collective bargaining process. During fiscal year 1977, LMSA published a contract research study on “Public Management’s Internal Organizational Response to the Demands of Collective Bargaining in Twelve Midwestern States,” and the Bureau of the Census issued “Labor-Management Relations in State and Local Governments: 1975,” also funded by LMSA. The Industrial Relations Research Institute of the University of Wisconsin issued an LMSA-financed report, “The Impact of Collective Bargaining on Hospitals: A Three State Study”; the National Civil Service League distributed a study supported by LMSA funds on the public interest in public sector collective bargaining, and the Urban Institute issued a condensed version of its study on productivity oriented labor-management programs in state and local government. A number of other studies, previously contracted for, are now nearing completion.
LMSA arranged with the Bureau of Labor Statistics for studies of police and firefighter work stoppages and the demographic characteristics of union membership. Funds were again supplied to the Bureau of the Census to continue its annual collection of data on labor-management relations in state and local governments. Seven contracts were awarded to outside researchers for labor relations studies in the private and public sectors, including union administration, grievance resolution, impasse procedures and the impact of
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government regulation on collective bargaining.
Chicago Construction Coordinating Committee
The Chicago Construction Coordinating Committee was transferred into LMSA to provide support services to the new Secretary’s Committee on the Construction Industry.
The Chicago Construction Coordinating Committee was created as a tripartite program sponsored by the U.S. Department of Labor and composed of representatives of federal, state and local governmental agencies; organized labor, and construction industry management, including builders, architects and engineers. The Committee’s goals were to try to reduce seasonal and cyclical unemployment in the construction industry, encourage coordination among governmental agencies of construction planning and contract awards, and encourage modification of government policies and practices increasing the cost of public construction.
Similar committees are planned for Atlanta, Boston, Denver, Kansas City, New York, Philadelphia, Pittsburgh and San Francisco.
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Office of the Solicitor
The Office of the Solicitor, responsible for all legal aspects of the Department’s fuctions, reviewed more cases and filed more legal actions during the 1977 fiscal year than the previous year. Major areas of increased litigation included child labor, administrative hearings under the Farm Labor Contractor Registration Act, age discrimination in employment, equal pay, minimum wage and overtime under the Fair Labor Standards Act.
In fiscal 1977, the 16 field offices of the Solicitor received 12,925 cases for review and possible legal action, filed legal actions in 7,736 cases; presented the Department’s case in 740 trials and administrative hearings, and issued 1822 written opinions. This is a 6 percent increase in cases reviewed for legal action and an increase of 8 percent in legal actions filed. The number of court appearances increased to a total of 2,088.
Occupational Safety and Health
The Division of Occupational Safety and Health assisted OSHA’s Office of Standards Development in preparing comprehensive new standards for exposure to coke oven emissions, ground fault protection, and commercial diving operations. In addition, emergency temporary standards were promulgated, and permanent regulations proposed, for benzene and 1,2, Dibromo-3-chloropropane (DBCP). A proposed standard was also published for exposure to cotton dust. The division provided legal services during public hearings on previously proposed standards for sulfur dioxide, lead, beryllium, and in connection with OSHA’s proposed revision of existing regulations on machinery and machine guarding (Subpart 0).
The amount of appelate litigation has continued to increase, with over 50 pending cases the courts of appeals, some involving challenges to major rulemaking activities by the Secretary such as promulgation of standards concerning coke oven emissions, ground fault circuit interrupters, and
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commercial diving operations. In a major decision last year, the Supreme Court upheld the constitutionality of OSHA in the Court’s rejection of the challenge that the Act’s solely administrative enforcement procedures deny employers the right to a civil jury trial guaranteed by the Seventh Amendment “in suits at common law.” Atlas Roofing Co. v. OSHRC, 430 U.S. 442 (1977). In addition, a number of circuit courts of appeals uniformly rejected attempts to deprive the agency of jurisdiction based upon limited regulation of working conditions by other agencies.
Southern Railway Co. v. OSHRC and Secretary, 539F 2d 335 (C.A. 4, 1976), and Southern Pacific Transportation Co. v. Usery 539 F 2d 386 (C.A. 5, 1976). During the 1978 fiscal year, the Supreme Court was scheduled to consider whether in section 8(a) of the Act Congress intended OSHA inspections to be conducted without the necessity of a search warrant and, if so, whether the provision is violative of the Fourth Amendment.
In litigation other than appelate court actions the Division conducted the following litigation activities. The Division provided assistance and guidance to the various Regional offices of the Solicitor in the handling of adjudicatory proceedings involving issues such as employee exposure to anthrax. It represented the Secretary in approximately 40 contested cases arising in the District of Columbia. Attorneys prepared approximately 112 petitions for review and submitted approximately 128 briefs to the Occupational Safety and Health Review Commission. These petitions and briefs include the economic feasibility of engineering controls for noise abatement, section 4(b)(1) and OSHA’s jurisdiction over airlines regulated by the FAA, the definition of an employee covered by the Act, and what constitutes a willful or repeated violation of the Act. The division has also reviewed 158 11(c) discrimination claims and filed two 11(c) suits in the United States District Court for the District of Columbia. Attorneys with the division assisted in preparing draft revisions of OSHA’s Field Operations Manual on topics ranging from OSHA worksheets and narrative forms to penalty computation and violation classification. The attorneys also provided OSHA with assistance concerning Federal employee safety programs set up under section 19 of the Act.
Legal services for the OSHA State plans function continued to be primarily evaluation of the provisions, procedures, and operations of plans approved under section 18(c)
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of the Act. Five additional State plans (Vermont, North Carolina, Utah, California, and Alaska) were certified as having completed their developmental phase bringing the total of such plans along with South Carolina, Iowa, and Minnesota to eight. An operational agreement was finalized under which the Michigan plan assumed full enforcement responsibility in that State. Formal rejection proceedings against the Virginia plan were dismissed upon the enactment of required legislative changes by the State, and the plan received approval with a unique equity court enforcement scheme. The Puerto Rico plan was also finally reviewed and found approvable, thus bringing the total approved State plans to 25.
Regulations providing standards and procedures for approval of plans covering public employees only in a State were drafted and adopted by OSHA as 29 CFR 1956. In addition, the regulations 29 CFR 1908 providing on-site consultation to employers through agreements using State personnel were revised to increase the Federal funding under the agreements to 90 percent and permit State plan States to enter into the agreements (29 CFR 1908).
General Legal Services
Litigation activity in the area of veterans’ reemployment rights continued at an unprecedented rate for the Division of General Legal Services. Of particular significance was the Supreme Court’s affirmance of appellate and district courts’ decisions in Davis v. Alabama Power Co., 97 S.Ct. 2002 (1977), by requiring time spent in the military service to be counted in computing both length of service and amount of pension benefits to be afforded a returning veteran. By this decision, the court adopted the Department’s view that the “true nature of the pension payment is a reward for length of service” and “pension payments are predominantely rewards for continuous employment with the same employer,” settled the conflict between the courts in the Third, Fifth, Ninth, and Tenth Circuits.
In another decision reaffirming the Department’s position that completion of a probationary period was not required for entitlement to reemployment rights under the Act, Hanna v. American Motors Corp., 557 F.2d 118 (C.A. 7, 1977), the court further strengthened the protection afforded probationary employees called to military service.
In the first decision interpreting the 1974 amendment to the reemployment rights statutes extending the benefits
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of the Act to State and local employees, the court, in Peel v. Florida Department of Transportation, 81 LC || 13,159 (N.D. Fla., 1977), ruled that neither the Tenth nor the Eleventh Amendments to the Constitution prevented the Congress from requiring the State of Florida to comply with the law.
Substantial increases in the legal services provided under the Farm Labor Contractor Registration Act continued throughout fiscal 1977 with the processing or filing of 160 civil money penalty cases and the hearing of 14 certificate revocation and refusal to issue cases. Both the civil money penalty cases and the certificate revocation or refusal cases were filed pursuant to Regulations 29 CFR Part 40 as revised on September 2, 1976, and amended on August 30, 1977.
Briefs have been or will be filed with the Court of Appeals in the Ninth Circuit in a number of significant decisions supporting the Department’s interpretations of the Act’s provisions. Of particular importance are the following cases: El Comite’ De Campesinos De S P Growers, et al. n. S P Growers Association, et al., C.A. No. 75-895-DWW (C.D. Cal., July 15, 1976); Usery n. Coastal Growers Association, C.A. No. 75-2956-HP (C.D. Cal., July 14, 1976); Usery v. Matilija Growers Association, C.A. No. 75-2957-MML (C.D. Cal., July 23, 1976); Usery n. S & F Growers, C.A. No. 75-3159-MML (C.D. Cal., July 23, 1976); and Marshall n. Point Sal Growers and Packers Association (C.A. 9, No. 77-2242). In each of these cases, the court held that the defendants, nonprofit agricultural associations organized to provide agricultural labor to their member-citrus growers, perform farm labor contracting activities for a fee within the meaning of the Act.
Administrative activity in the area of child labor civil money penalties proceeded at an unexpectedly high rate during the second year of its operation by The Division of General Legal Services. Of the 20 cases in which Orders of Reference were filed in the previous year, 19 were finalized for civil money penalties totalling $47,195. The Division has filed with the Chief Administrative Law Judge Orders of Reference for administrative hearings, or otherwise closed, 146 cases, involving civil money penalties totalling $862,555. Of these 146 cases, the civil money penalty has been finally determined in 108 cases by a Decision and Order of an Administrative Law Judge, or otherwise closed.
Of particular significance was the Administrative Law
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Judge’s Decision and Order affirming assessment of civil money penalties in Marshall v. Ernes Provision Company, 77-CL-208, 23 WH 63, which held that the maximum penalty of $1,000 was properly assessed against an employer for violation of the child labor provisions with respect to an injured minor employed to operate and clean hazardous machines notwithstanding the small size of employer’s meat processing business. In the Decision and Order in Marshall v. Jay’s Carry Out, Inc., 77-CL-203, 23 WH 242, the Administrative Law Judge held that the civil money penalty was proper where employment of minors only 9 and 11 years of age should have raised questions with the employer who hired such minors at low rates of pay. The judge also held that lack of specific, detailed knowledge of the law did not relieve the employer of responsibility for widespread violations.
The most important case under Title III of the Consumer Credit Protection Act is Usery v. First National Bank of Arizona (C.A. 9, No. 75-3763), currently pending on appeal before the Ninth circuit. The issues are whether the garnishment restrictions of Section 303(a) of the Act apply to earnings deposited in a bank account, and whether the garnishee bank has a statutory duty to protect earnings in its depositors’ accounts from excessive garnishment.
Under the Social Security Act, as amended effective June 1, 1977 (Public Law 95-30), the United States was made a proper party to service of process in connection with collection of unpaid child support and alimony due from persons receiving wages or other employment benefits from the Federal Government. The Solicitor of Labor, through the Division of General Legal Services, represents the Secretary in court actions seeking the collection of funds under court orders against Department of Labor employees and recipients of employment benefits from the Department of Labor.
In the area of international affairs and foreign trade, legal assistance to the Office of Trade Adjustment Assistance (OTAA) was the largest single activity. The legal services included defending against appeals by worker groups to the U.S. Court of Appeals under Section 250 of the Trade Act of 1974; enforcement of subpenas under Section 249 of the Trade Act in the Federal district courts; review of each administrative case as to form and sufficiency; and drafting of proposed legislation and amendments to the regulations.
Attorneys from this Division participated at the June
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1977 ILO Conference and the drafting of an ILO Code of Conduct for Multinational Corporations.
In the area of construction labor standards the Supreme Court is considering a petition for certiorari in University of Chicago v. McDaniel, 548 F.2d 689 (C.A. 7, 1977), S.Ct. No. 76-1464, in which the Seventh Circuit held that the Davis-Bacon Act, 40 U.S.C. §276a, et seq., contains an implied private right of action for the benefit of laborers and mechanics who are not paid the prevailing wage rate.
Legislation and Legal Counsel
The Division of Legislation and Legal Counsel performs a wide range of legal services including house counsel functions for Department officials and the drafting of Department of Labor legislative proposals. In close cooperation with other agencies within the Department, this Division drafted the Department’s Legislative Program for calendar year 1977 for submission to OMB.
The Division provided legal services for the employment opportunities title of the Administration’s proposed Welfare Reform legislation, Labor Law Reform proposals, the Youth Employment and Demonstration Projects Act of 1977, extension of the Comprehensive Employment and Training Act, and amendments to the Fair Labor Standards Act, the Age Discrimination in Employment Act, amendments to the Civil Rights laws dealing with discrimination based on pregnancy and amendments to the unemployment compensation laws.
The Division assisted Department officials when they testified on proposed legislation or during oversight hearings affecting virtually all aspects of the Department’s programs and operations. Other legal services were rendered in connection with the Freedom of Information Act, the Privacy Act, the Federal Advisory Committee Act, requirements relating to economic impact statements, the Department of Labor Ethics and Conduct Regulations, and review of a wide variety of Departmental regulations or issuances covering the conduct of Department business.
Employment and Training
The primary activities of the Employement and Training Legal Services (ETLS) Division during the past year have t>een continuing assistance in developing comprehensive sets of regulations for the operation of the Employment
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and Training Administration’s (ETA) many programs, providing an ever increasing amount of legal advice to ETA on a day-to-day basis, and representing the Department’s interests in a rapidly growing volume of employment and training related litigation.
ETLS worked closely with ETA and the Department of Health, Education, and Welfare in preparing the President’s proposed Better Jobs and Income Program (Welfare Reform). ETLS provided technical assistance in drafting the Youth Employment and Demonstration Project Act of 1977 (P.L. 95-93) signed into law August 5, 1977, and have been directly involved in preparing regulations and negotiating formal inter-agency agreements with the Departments of Agriculture and Interior.
The division has been directly involved in helping prepare the national standards for registration of apprenticeship programs and assisted in preparing proposed regulations governing trainee programs.
The Division has continued to provide an increasing amount of day-to-day legal service to ETA on legal problems arising under numerous statutes and executive orders. ETLS has also continued representing the Secretary in the increasing volume of litigation involving the Department’s certification responsibilities under the Immigration and Nationality Act as well as employment and training programs. Significant victories in cases of first impression under CETA have been achieved. The division is prosecuting cases pertaining to the interstate clearance system’s procedures for securing and protecting domestic and seasonal farmworkers prior to the certification of temporary foreign workers.
Employee Benefits
The Division provides a full range of legal services to the Employment Standards Administration’s Office of Workers’ Compensation Programs in its administration of the Longshoremen’s and Harbor Workers’ Compensation Act, Title IV, Section 415 and Part C, of the Federal Coal Mine Health and Safety Act of 1969, and the Federal Employees’ Compensation Act.
During FY 77 the Division, after nearly five years of extensive litigation concerning the 1972 amendments to the Longshoremen’s Act extending its coverage to certain employees injured on land, reached at least partial culmination with the unanimous decision issued by the Supreme Court on June 17, 1977, in Northeast Marine Terminal Co. v.
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Caputo, 432 U.S. 249, 97 S. Ct. 2348. Affirming the award of benefits to a “checker” injured while checking cargo being removed from a container and to a terminal employee injured while loading cargo within the terminal onto the consignee’s truck, the Supreme Court accepted the Department’s position that the Act’s definition of employee should be broadly construed and that coverage could be satisfied either on the basis of the general occupation in which the employee was working when injured or on the basis of the nature of duties being performed at the time of injury. The Court also agreed that the “stuffing or stripping” of containers was a covered employment even though such activities may not be performed continuously in time with the transfer of cargo from the ship. It thus rejected the limitation on the Act’s coverage most forcefully urged by many employers—the “point of rest,” which generally separates stevedoring functions performed continuously with the transfer of cargo to or from the ship, from terminal functions. The Northeast Marine decision controls tens of thousands of claims involving shoreside employment injuries whose entitlement to benefits was previously in dispute.
Major appellate victories resulted in appeals filed in the U.S. Court of Appeals for the District of Columbia Circuit in Director, OWCP v. Boughman, 545 F.2d 210. First, the circuit court affirmed the Benefits Review Board’s decision that the District of Columbia Workmen’s Compensation Act (an extension of the Longshoremen’s Act) applied to a fatal injury sustained by the International Union of Operating Engineers’ employee in California. The Court of Appeals rejected the arguments that (1) extension of the D.C. Act to this claim violated the full faith and credit clause of the U.S. Constitution, and (2) that the full faith and credit clause was also violated by the Boards’s refusal to find that the California Workers’ Compensation Act is the exclusive remedy for the benefits claimed. Second, the D.C. Circuit, agreeing with the Third Circuit’s recent decision in Director, OWCP n. O’Keefe, 545 F.2d 337, upheld that section 6(d) of the Longshoremen’s Act does establish a maximum limitation upon death benefits payable under section 9 of the Act.
The most significant development in the Black Lung Benefits Program area was the passage by the House of Representatives on September 19, 1977, and by the Senate on September 20, 1977, of separate bills to amend the Federal Coal Mine Health and Safety Act. Appellate ligitation
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under the Black Lung Benefits Act resulted in several courts of appeal upholding the Department’s position that the 1972 amendments to the Longshoremen’s Act applied to the Black Lung program and that therefore both the Benefits Review Board and the U.S. Courts of Appeal have jurisdiction to review Black Lung decisions. Director n. Eastern Coal Corp. (C.A. 6 July 18, 1977); Krolick Contracting Co. v. Benefits Review Board (C.A. 3 June 14, 1977); Director v. Peabody Coal Co. (C.A. 7 April 18, 1977); Director v. National Mines Corp. (C.A. 4 April 4, 1977). The courts also upheld the standing of the Director, OWCP, to appeal adverse decisions rendered by the Board and the authority of the Secretary to appoint persons other than administrative law judges to hear and decide claims for benefits.
A favorable decision was issued May 25 in the first civil action brought to compel a coal mine operator to comply with a decision directing the operator to pay Black Lung benefits. Marshall v. Barnes and Tucker Company (W.D. Pa.). In granting the relief requested, the court held that the company could not challenge the finding that it was an “operator” within the meaning of the Black Lung Benefits Act, nor could it challenge the manner in which the regulations were applied or the timeliness of the claim. The judge concluded that the district court had no jurisdiction to review the merits of the administrative decision and order; the authority of the court under section 21(d) of the Longshoremen’s Act (incorporated into the Black Lung Benefits Act) is limited to screening compensation orders for procedural defects only and thereby to afford employers “a measure of procedural due process.”
Labor Management Laws
On January 12, 1977, the Supreme Court decided in Local 3489, United Steelworkers of America v. Usery, that a requirement of all locals of the United Steelworkers, that members must have attended 50 percent of membership meetings for the three years preceding an election in order to be eligible to be a candidate for office, was invalid in the context of the Labor-Management Reporting and Disclosure Act (LMRDA). The decision resolved a conflict between two circuit courts of appeals on this question, and this has resulted in the settlement of at least seven lawsuits filed against individual Steelworker locals on this point. Further, it will affect all Steelworker local elections in the future.
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In Usery v. Local 720, Laborers’, 10th Circuit Court of Appeals, the District Court entered an order dismissing a complaint of the Department because the Department declined to comply with the court’s discovery which would have required the Department to disclose the identities of union members interviewed in the course of the investigation. The Department interposed the informer’s privilege, but the claim was rejected by the lower court. On appeal, the Tenth Circuit stated that the union failed to show a substantial need for the requested information at the discovery stage, and that the District Court failed to balance the Government’s qualified privilege against the need of the union at the discovery stage of the proceedings. The District Court was, therefore, reversed and the matter remanded for further proceedings. The Supreme Court denied certiorari in this case.
In Marshall v. United Steelworkers of America, District 15, a complaint was filed to have the election for Director of District 15 set aside. The case was pending at fiscal year’s end. In the complaint, it was alleged by the Department that the District, in the conduct of its election, failed to provide a reasonable opportunity for the nomination of candidates in that in a number of local unions no provision was made for members who were working to participate in the nominations; members were denied their right to present the name of an announced candidate for nomination, and members were permitted to withdraw nominations which had been submitted to and accepted by local unions.
In Marshall v. Local 639, Teamsters, U.S.D.C., D.C., the District Court heard a motion for intervenor-plaintiffs in this case to require installation of the winners in the June 24, 1977, election of officers. The losing incumbents had refused to vacate the office. The intervenor-plaintiffs’ motion was supported by the Secretary. The motion was granted and the newly elected officers were installed.
The case of Brennan v. Local 1374, Machinists, involved a motion to dismiss the Secretary’s complaint challenging an election of officers in Local 1374 on the ground that the complaint was filed more than 60 days after a complaint was filed with the Secretary. The court denied the motion, and the Court of Appeals for the Ninth Circuit affirmed, holding that the LMRDA 60-day time limit for the filing of suit was directory rather than mandatory. This is the first time the 60-day limitation question has been decided, absent a waiver of the limitation by a union, or in
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terference by a defendant union causing a late filing.
A complaint was received challenging the February 8, 1977, election of the United Steelworkers of America, charging that the election of the winning candidate should be set aside because of violations of the LMRDA. The complaint was filed in June 1977, following which the Department initiated an investigation encompassing 712 local unions. The investigation required the services of 250 Department investigators throughout the United States. The assessment of the investigation, and a decision whether to litigate were pending.
Labor Relations and Civil Rights
The Office of Federal Contract Compliance Programs (OFCCP) continued to make the greatest demands on the Division. During the past year, the OFCCP regulations were revised, including comprehensive revisions of the rules of practices governing administrative hearings. All compliance agencies now must follow OFCCP’s rules of practice. The Division also rendered legal services in connection with the debarment of three contractors and is representing OFCCP in 10 administrative enforcement actions and four enforcement cases pending in Federal district courts.
Another area involving substantial legal services involves requests made under the Freedom of Information Act for Affirmative Action Programs and related materials prepared under Executive Order 11246. Twenty-two so-called reverse FOIA cases were filed during the year in which Federal contractors who had submitted equal employment statistics to the Government sought to restrain the Secretary of Labor and other officials from making the information available to the public. These contractors assert that their employment statistics are confidential commercial and financial information which may not be released by Federal agencies. A significant development was the decision of the U.S. Court of Appeals for the Third Circuit in Chrysler Corporation v. Brown, that a court may not substitute its judgment for that of an agency in determining whether to disclose information. Instead, there should be a limited judicial review of such decisions under the Administrative Procedure Act to determine whether the agency acted within its discretion.
The first enforcement actions under section 503 of the Rehabilitation Act of 1973 were filed during the year. Presently, five administrative enforcement proceedings are pend
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ing against major Government contractors. The complainants in these cases have suffered such handicaps as hearing loss, heart attack, back injury, and congenital spinal defect. On April 12, 1977, the Divison published regulations adopting Executive Order 11246 hearing procedures for use in cases under the Rehabilitation Act and section 402 of the Vietnam Era Veterans Readjustment Assistance Act (VEVRA).
The Division has reviewed the mandatory job listing requirements for Government contractors under VEVRA, and has tightened the standards for determining when a subsidiary or parent corporation is an independently operated corporate affiliate. The new standard, which is consistent with the standard used for FLSA and E.O. 11246, effectively reduces the number of companies able to avoid mandatory listing.
Plan Benefits Security Division
Attorneys participated with the Special Consultant to the Secretary throughout the negotiations with the International Brotherhood of Teamsters’ Central States, Southeast and Southwest Areas Pension Fund, by which the Department obtained the resignations of the Fund’s former trustees, including IBT President Frank Fitzsimmons, and the Fund’s agreement to place all assets under the management of independent, professional investment managers. These arrangements were agreed to without litigation and achieved preliminary objectives of reforming the Fund’s asset management procedures. The Deputy Associate Solicitor was appointed by the Secretary to head a special governmental task force to expedite consideration of requests for exemptions and opinions, and otherwise render assistance to the investment managers in dealing with the government.
Between July 29, 1977, and August 31, 1977, 17 submissions requesting exemptions and opinions were received. An exemption from the prohibitions of section 406 of ERISA and section 4975 of the Internal Revenue Code, covering many aspects of the investment managers’ future activities with respect to the plan’s assets, was proposed in the Federal Register September 9, 1977. Another exemption, covering one existing situation, was proposed in the Federal Register on September 23, 1977. Several opinion letters also were issued in response to the submissions.
Division attorneys successfully concluded the district court litigation of the Secretary’s first original enforcement action under ERISA. In Usery v. Penn, filed on June 3,
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1976 in the Western District of Oklahoma (C.A. No. Civ-76-0450-T), defendants, the owners of an Oklahoma City restaurant business, and fiduciaries of its profit sharing plan, agreed with another defendant to sell control of the company by means of an agreement whereby they received approximately one million dollars from plan assets in exchange for 97% of the stock of the company. The plan thereby acquired, as its only asset, the employer’s stock, which had no ready market and was of questionable value. There was also evidence of self dealing with employer assets on the part of the new plan fiduciary, which reduced the value of the plan’s assets. The Department alleged that the transaction violated the requirement of ERISA section 404 (a)(1)(A) and (B) that fiduciaries act prudently and solely in the interest of plan participants.
After a trial in November 1976, the Court, on December 29, 1976, ordered rescission of all the transactions related to the sale of stock to the plan, and restoration of plan assets. An appeal was pending in the Tenth Circuit.
Another case concluded successfully was Marshall v. Wilson et al., (C.A. No. 3-76-373) filed on November 23, 1976 in the district court for the Eastern District of Tennessee. The Department alleged that the defendants, the trustees of the Southern Labor Union Pension and Welfare Funds, engaged in a wide variety of violations of the fiduciary responsibility provisions of ERISA sections 404 and 406, including leasing of aircraft unnecessary for the operation of the plans; expenditure of funds not authorized by plan instruments; party in interest loans, and failure to collect delinquent contributions from employers.
The court on June 6, 1977, entered a consent decree embodying a settlement reached by the Department and the defendants whereby the plans adopted new procedures; the defendants resigned as trustees and were barred from contact with the plans for five years; they agreed to restore plan assets involved in prohibited transactions and to hold the plans harmless from loss which might occur from their actions which the Department alleged to be unlawful.
A decision favorable to the Secretary’s position on an important question of federal and state jurisdiction under ERISA was rendered on July 22, 1977, by the U.S. Court of Appeals for the Second Circuit in Marshall v. Chase Manhattan Bank, (No. 77-6061). Chase had commenced an ex parte proceeding in a New York State court seeking that court’s approval of Chase’s account as trustee for a small
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pension plan, for the years 1970-1975, and final distribution of the plan’s assets. The Department alleged that the New York State court was without jurisdiction to render the requested judgment as a result of the preemption provisions of ERISA section 514 and the jurisdiction provisions of ERISA section 502. An injunction was sought requiring withdrawal of the state court action insofar as it related to Chase’s conduct as trustee during 1975. On January 25, 1977, the district court dismissed the action, and the Department filed a notice of appeal. In reversing the district court’s judgment of dismissal, the court of appeals held that the complaint stated a claim for which relief could be granted and further held that there was no ground for dismissal either in the anti-injunction statute or in the doctrine of Federal abstention.
On March 30, 1977, the Department filed Marshall et al. v. Schmoutey et al. in the District of Nevada (C.A. No. CV LV 77-47-RDF), against the trustees of the Southern Nevada Culinary and Bartenders Pension Trust and against Morris A. Shenker and four corporations owned or controlled by Shenker. The complaint alleged violations of the prudence and diversification of asset rules of section 404 of ERISA and of the prohibited transactions rules of section 406, arising from loans of over 50 percent of the plan’s assets to Shenker-controlled companies engaged in real estate development. Shenker was a party in interest because of his ownership and control of the Dunes Hotel which employed participants. A motion for preliminary injunction, filed with the complaint, sought an order stopping further advances pursuant to loan agreements and the appointment of an interim receiver. On August 30, 1977, the Court entered an order approving a stipulation between the Secretary and the trustees recognizing the trustees’ appointment of the Upper Avenue Bank of Chicago as investment manager for the real estate related assets of the plan and requiring the investment manager to develop a plan, subject to the court’s approval, for the management of the assets entrusted to his control.
A civil action was initiated in the Eastern District of New York, Marshall n. Snyder et al. (C.A. No. 77C-116), against the trustees of pension, welfare and annuity plans maintained jointly by General Teamsters Local 806 and employers having collective bargaining agreements with Local 806. The complaint also named as defendants the local, certain local union officials and a corporation wholly owned
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by the welfare plan. The suit alleged numerous violations of ERISA sections 404 and 406, including payments exceeding $1 million to defendant-trustee George Snyder, which were far in excess of reasonable compensation for any service he actually rendered; $380,000 to refurnish union and plan offices, and $290,000 transferred unlawfully from the welfare plan to Local 806 through Record Processors, Inc., a corporation wholly owned by the welfare plan.
To resolve issues presented by the motion for a preliminary injunction, the parties agreed upon a preliminary consent decree, prohibiting further payments from the plans to parties in interest. After serious breaches of the terms of this consent order, the court appointed a receiver to take over the management of the plans and their assets including the corporation owned by the welfare plan. The defendants have appealed from this order to the U.S. Court of Appeals for the Second Circuit. The Court of Appeals heard argument on September 12, 1977.
The Solicitor’s Office has also represented the Secretary in a number of other significant cases including M & R Investment Company, Inc. v. Fitzsimmons et al. (U.S.D. Nev., No. LV-76-114, RDF) (intervention to assert that a $40 million loan from the Central States, Southeast and Southwest Areas Pension Fund is illegal and unenforceable because it is a prohibited transaction); Daniel v. International Brotherhood of Teamsters (C.A. 7, No. 76-1855)(fil-ing of an amicus brief urging that the securities laws’ antifraud provisions do not apply to an alleged nondisclosure of a pre-ERISA break-in-service rule); Pension Benefit Guaranty Corporation v. Connolly et al. (C.A. 9 No. 76-2777) (filing of a joint amicus brief with the IRS asserting in support of PBGC that the plan termination insurance provisions of ERISA Title IV apply to multi-employer, collectively bargained defined benefit plans despite employers’ attempts to limit their liability to agreed-upon contributions); Tellez v. National Automatic Sprinkler Apprentice Fund of New York (U.S.D. Fla., No. 76-1548-Civ-JE) (filing of an amicus brief arguing for a broad interpretation of ERISA’s venue provision); and Fletcher Bell v. Employee Security Benefit Association (U.S.D. Kan., No. 77-4066) (filing of an amicus brief urging an interpretation of “employee benefit plans” which would assist state authorities in regulating some insurance type organizations which are not covered by ERISA which position was adopted by the court).
Between October 1, 1976, and September 30, 1977, six
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major class exemptions were granted by the Department. Two exemptions covered classes of transactions involving investment companies; two covered the transfer of individual life insurance and annuity contracts between plans and parties in interest; one involved the provision of office space, administrative services and the sale or leasing of goods between a multiple employer plan and a participating employer, participating employee organization, and a participating employer association or another multiple employer plan. A sixth class exemption permitted the receipt of compensation, including fees and commissions, by insurance agents and brokers, pension consultants, insurance companies, investment companies, and investment company principle underwriters for the sale of insurance or annuity contracts or securities issued by an investment company.
In addition, notice of pendency of a proposed class exemption was published for collectively bargained multiple employer apprenticeship and training plans which will exempt from the prohibited transactions provisions of the Act certain transactions between collectively bargained multiple employer apprenticeship plans and employers making contributions to these plans, if certain conditions are met.
In the area of individual exemptions, a special effort was made to assist PWBP clear up the backlog in the handling of individual cases. As a result of this effort, 322 of 735 applications were closed by June 30th. Of these 322 applications, 154 were closed with some relief granted to the applicants by either class exemptions, individual exemptions or rulings, and tentative dispositions were reached with respect to the remaining 124 cases.
Three major regulations concerning the conduct of fiduciaries were finalized by the Department during this fiscal year.
Final regulations were adopted under sections 408(b)(2), 408(b)(4), 408(b)(6), 408(c)(2) and 414(c)(4) of the Act concerning persons providing services and office space to employee benefit plans, the investment of plan assets in the deposits of banks and similar financial institutions, the provisions of ancillary services by banks and similar financial institutions to plans and the transitional rule for provision of services to plans under the Act. These regulations (a) clarify under what circumstances a party in interest, including a fiduciary, may receive reasonable compensation for providing necessary services and office space to pension and welfare plans, (b) describe when plan assets may be invested in de
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posits of banks or similar financial institutions which are plan fiduciaries or parties in interest, and (c) set forth conditions under which ancillary services may be provided to plans by banks or similar financial institutions acting as fiduciaries to a plan.
Final regulations were also published under sections 408(b)(3), 407(d)(5) and 407(d)(6) of the Act setting forth requirements relating to the exemption for loans to employee stock ownership plans (ESOP’s), the definition of the term employee stock ownership plan, and the definition of the term qualifying employer securities.
Further, final regulations were published under section 407(a) and 407(c) of the Act. These regulations, which are required by the Act, set forth rules relating to the acquisition and holding of employer securities and employer real property and the requirement that certain employer securities and employer real property be divested no later than December 31, 1979.
In addition, during the past fiscal year, much effort was devoted to the promulgation of regulations which govern the coverage standards, reporting and disclosure requirements, and other aspects of the operation of employee benefit plans under ERISA.
On December 28, 1976, final regulations under the minimum standards provisions of ERISA were published in a 36-page special part of the Federal Register. These regulations defined the term “hour of service” as the basic element of creditable service under the minimum participation, vesting and benefit accrual standards of the Act and established eight alternate methods for calculating hours of service designed in order to accommodate past administrative practices of plans. In addition, the package contained proposed and temporarily effective regulations concerning the elapsed time method of crediting service, permitting plans to use this currently popular method of credit service under specific conditions designed to protect participants’ interests. This large and complex body of regulations interacts with regulations of the Internal Revenue Service to establish basic ERISA standards for pension plans.
Regulations were developed to govern the form, content and distribution of the summary plan description, which informs participants in an employee benefit plan and their beneficiaries of their rights and benefits under the plan. Some of these regulations were issued in final form; others were issued as proposed regulations effective on an interim
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basis until finalized.
Under these regulations, the plan administrator of a new plan or of an existing plan which has not previously distributed the summary plan description to participants and filed it with the Department must make an initial distribution of the summary plan description to participants and (in the case of a pension plan) to beneficiaries receiving benefits under the plan, and must file the summary plan description with the Department within 120 days after the plan becomes subject to Part 1 of Title I of ERISA. After the initial distribution of the summary plan description, the plan administrator of the ongoing plan must generally distribute it to each new participant within 90 days after he or she becomes a participant and to each beneficiary under a pension plan within 120 days after he or she begins receiving benefits under the plan. An important additional element of the regulations is the clarification of the requirement that a statement of ERISA rights be set forth separately in the summary plan description.
On May 27, 1977, claims procedure regulations under section 503 of ERISA were published. Section 503 requires employee benefit plans to provide adequate notice of benefit claim denials and to provide a full and fair review of such denials by a fiduciary. The regulations set forth time limits within which plans must respond to claims and within which fiduciaries must conduct reviews of denied claims. The regulations describe what constitutes adequate notice of denial. Certain collectively bargained plans are allowed to substitute arbitration procedures for the claims procedure set forth in the regulation, and public comments were requested as to the effect such an arbitration decision may have on a subsequent court appeal of a claim denial.
Fair Labor Standards
The year saw a great deal of litigation in the wake of the Supreme Court’s decision in National League of Cities v. Usery, 426 U.S. 833 (1976). In that case, the Supreme Court held that extension of the minimum wage and overtime provisions of the Fair Labor Standards Act to state and local government employees engaged in traditional governmental functions was an impermissible exercise of Congress’ commerce clause power. Any suits in progress against state and local government employees clearly encompassed by National League of Cities were dismissed. However, the great majority of pending suits against such employers were
96
employment discrimination cases brought under the Equal Pay Act or the Age Discrimination in Employment Act. Confronted with motions to dismiss many of these cases, the Department’s position was that these laws were unaffected by National League of Cities, and that they were constitutional as applied to public employers.
The Department’s position was accepted by the overwhelming majority of courts which considered the issue. Two Courts of Appeals held the Equal Pay Act applicable to political subdivisions of a state. Usery v. Allegheny County Institution District, 544 F.2d 148 (C.A. 3, 1976), cert, denied_____U.S_____, 97 S.Ct. 1582 (1977); Usery v. Charleston
County School District, 558 F.2d 1169 (C.A. 4, July 25, 1977). Thirty-two district courts reached the same conclusion, as compared with two reaching a contrary result. The issue was briefed and was awaiting argument in four other circuits. Usery v. Owensboro- Daviess County Hospital, No. 77-3069 (C.A. 6); Usery v. City of Sheboygan, No. 77-1272 (C.A. 7); Usery v. Citrus Community College, No. 76-2920 (C.A. 9); Marshall v. Dallas Independent School District, No. 77-2174 (C.A. 5). All four district courts to have ruled on the Age Discrimination in Employment Act upheld it. One private ADEA case in which the Department participated as amicus curiae was pending in the Fourth Circuit: Arritt v. Grissell, No. 76-2358.
The Department argued in all these cases that the unconstitutional portions of the FLSA were entirely severable from the Equal Pay Act and the Age Discrimination in Employment Act. Both may be sustained by Congress’ authority under either the commerce clause, which requires a balancing of federal and state interests, or the Fourteenth Amendment, which the Court recited in upholding extension of Title VII of the 1964 Civil Rights Act to state and local government employers. Fitzpatrick v. Bitzer, 427 U.S. 445 (1976). Some courts adopted the Fourteenth Amendment rationale, some the commerce clause, and some both.
The Supreme Court granted certiorari in three important age discrimination cases. In United Airlines, Inc., v. McMann, 76-906, the Court was to review the Fourth Circuit’s favorable decision, in which the Department participated as amicus curiae, holding that forced retirement of employees between the ages of 40 and 65 violated the ADEA, notwithstanding that such retirements were authorized by a pension plan which predated the Act and paid substantial benefits. In Shell Oil Co. v. Dartt, No 76-678, the Court
was to review the Tenth Circuit’s favorable decision, in which the Department participated, holding that the requirement that a private ADEA claimant file a notice of intent to sue with the Department within 180 days of the alleged violation was not jurisdictional, and may be tolled for equitable reasons. The third case, Lorillard v. Pons, No. 76-1346, presented for review the Fourth Circuit’s decision preserving a jury trial in a private ADEA action.
Another important age discrimination case, Houghton v. McDonnell Douglas Corp., 553 F.2d 561, in which the Department was an intervening party, was decided by the Eighth Circuit. Reversing the decision of the District Court, the Court of Appeals held that McDonnell Douglas violated the ADEA when it terminated its chief production test pilot because he reached age 52. The company claimed that age was a bona fide occupational qualification. The court held that the company failed in its burden of proving this defense, citing the “mountain of evidence,” principally medical, against the company’s position. The Court held that the company produced no evidence to show that a test pilot’s ability to perform his duties safely and effectively was impaired so as to justify the arbitrary age limit. McDonnell Douglas petitioned for a writ of certiorari from the Supreme Court.
The Department continued to defend its duty to protect the identity of employees who inform the Department of possible violations of the law. In one case, it was forced to petition the Tenth Circuit for a writ of mandamus where the district court had ordered the Secretary to reveal the names of such persons. The court of appeals ordered the district judge to dismiss the contempt proceedings against the Secretary, and upheld the protective privilege, Usery n. Ritter, No. 76-1809 (C.A. 10, Jan. 3, 1977).
Other significant victories in the courts of appeals included the following. In Brennan. Western Union Telegraph Co., Nos. 76-2014 and 76-2015, the Third Circuit rejected the company’s claim that managerial personnel who performed rank and file work during a prolonged strike retain their exempt status as executive, administrative, or professional employees under the FLSA. The court also rejected the claim that to require the payment of overtime compensation in such a situation would interfere with the national labor policy, as the company and the Chamber of Commerce had asserted. In Dunlop Carriage Carpet Co., No. 75-2309, the Sixth Circuit held that the term “employee” in
98
eludes former employees for purposes of the FLSA. The case involved section 15(a)(3), which prohibits retaliation against an “employee” for participation in FLSA proceedings.
In a case involving widespread equal pay and Title VII violations, EEOC, Hodgson and U.S.A, v. AT&T, et al., 556 F.2d 167, the Third Circuit upheld the validity of the largest consent decree ever obtained by the Government to remedy employment discrimination. The suit involved challenges by the unions to the nationwide consent decree agreed to by the Government (Departments of Labor and Justice and the Equal Employment Opportunity Commission) and AT&T on behalf of its 24 operating companies. Specifically, the unions objected to the “affirmative action override” provisions of the decree, which required any company unable to meet the intermediate targets to select from among basically qualified candidates in the group for which targets had not been met. The Third Circuit rejected the argument that the limited departure from normal selective criteria contravenes Title VII of the Civil Rights Act of 1964 or the Constitution and affirmed the district court’s entry of the decree.
The decree, which was entered in 1973 and was to expire in 1979, had already resulted in back wages and increased salary adjustments, primarily for women and minority employees, of approximately $130 million dollars. The unions petitioned for certiorari in the Supreme Court. Both the Government plaintiffs and AT&T opposed the petition.
The Department continued to litigate equal pay cases involving university professionals. Several new cases were filed during the year, bringing the number of such suits to 15. The first court trial on this issue began in a case against Memphis State University (USDC W.D. Tenn.). A major trial against the J. C. Penney Company (USDC N.D. Ohio), involving equal pay violations among retail employees was completed. The Department filed two new suits against sub-sidaries of the National Kinney Company (USDC N.J.), involving comparisons of male janitors with female maids in the cleaning of office buildings. Cases were filed previously against subsidaries of this company in Connecticut, New Jersey, and Illinois. The Connecticut case was tried and decision was pending. This was one of the largest series of equal pay cases ever brought.
The Department also filed several large pattern and practice suits under the Age Discrimination in Employment Act. Among those filed in fiscal year 1977 were cases against
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the Hartford Insurance Company (USDC Conn.), and American Motors (USDC E.D. Mich.). The Department filed its first cases concerning the issue of whether or not the bona fide occupational qualification exemption applies generally to policemen. The Delaware Bridge and Bay Authority suit (USDC Del.), involved the mandatory retirement of bridge policemen at age 55. The case The University of Texas at San Antonio (USDC W.D. Tex.), involved a refusal to hire a campus policeman over the age of 45. Neither case had come to trial. At the investigative stage, the Department prevailed in a court action to enforce an administrative subpoena requiring a major company to make available its original computer personnel records. Such information was necessary to assess the age impact of a major layoff of employees. The Dallas Regional Solicitor’s Office tried the Sandia (D.N. Mex.) case, the first major pattern and practice age discrimination case to reach trial.
During the year, a serious attack on the enforcement of federal labor laws in sectarian schools was mounted by churches who claimed that the application of such laws to their affairs was a violation of the First Amendment to the Constitution. In March 1977, a U.S. District Court in California denied a motion for summary judgment made by the Seventh-Day Adventists, who argued that the First Amendment precluded enforcement of the Equal Pay Act in their parochial schools. Marshall v. Pacific Union Conference of Seventh-Day Adventists, (USDC S.D. Calif. 1977). The Seventh-Day Adventists sought review of the District Court’s orders to comply with the Department’s discovery requests. Both the Ninth Circuit and Justice Rehnquist of the Supreme Court upheld the Department’s right to engage in discovery procedures. The Seventh-Day Adventists settled the litigation with a promise of future compliance and the payment of $650,000 for back wages withheld.
In August, the U.S. District Court in New Hampshire asked for briefs and argument on the question of whether the First Amendment precludes application of the Age Discrimination in Employment Act to the Catholic schools of Manchester, New Hampshire. That case, Marshall v. Manchester East Catholic Regional School Board, was pending.
Beginning in early July 1977, Congress began to actively consider major amendments to the Fair Labor Standards Act and the Age Discrimination in Employment Act. The Division of Fair Labor Standards was heavily involved in providing technical assistance on the proposed amendments.
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Bureau of International Labor Affairs
The international policies and activities of the De-partment underwent major change in fiscal 1977. These were reflected in the work of the Bureau of International Labor Affairs (ILAB), which carries out the international responsibilities of the Department.
Foreign Economic Policy
In relation to the Department’s role in helping to formulate and implement United States foreign economic policy, there was new recognition and attention to the practical effects upon people and communities that trade policies cause. New efforts were made to avoid or reduce the economic dislocations and hardships which trade policies, when formed in a vacuum and based upon theoretical doctrines, can create for American workers. There was new awareness that sensitive industries must be handled with sensitivity; that impacted areas must be given special consideration. It was recognized that open trading policies rest on an uneasy foundation, and failure to take into account the areas of vulnerability could collapse that foundation.
The Department holds membership on interagency committees having responsibility for developing all aspects of international trade policy. During the year, the most intensive work was related to the multilateral trade negotiations (MTN), aimed at liberalizing tariff and non-tariff barriers to world trade. During the summer, the U.S. and the European Community reached agreement on a timetable for completing the negotiations. As a result, work on the MTN accelerated. Activity centered on procedures for reducing tariffs, proposals for codes on non-tariff measures (e.g., subsidies and countervailing duties), the multilateral safeguards code, and preliminary work on U.S. requests for reductions of foreign trade barriers.
The Department also continued its involvement in formulating U.S. trade policy toward developing countries,
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taking part in consultations with developing countries on bilateral trade issues and tropical products negotiations. The Generalized System of Preferences (GSP), granting duty free treatment to certain imported products from developing countries, received periodic interagency review to determine product and country eligibility and overall program objectives.
The Department participated in a series of negotiations concerning the extension of the Arrangement Regarding International Trade in Textiles (MFA) of the General Agreement on Tariffs and Trade. This Arrangement, which is due to expire in December 1977 unless extended, provides the international cover for bilateral textile agreements. During the year the Department also participated in negotiations with 18 nations regarding the extension, revision, or renegotiation of their bilateral agreements to bring these agreements into full conformity with the provisions of the MFA and to make adjustments in terms of a newly developed U.S. control system. These agreements promote the orderly development of world textile trade and avoid disruption of the U.S. industry and its workers.
To assure that the Government’s foreign economic policy makers have accurate and timely knowledge of how their decisions are affecting workers, the Department has, since January 1977, initiated intensive and continuous consultations with representatives of America’s workers at all levels. This included revitalized use of the Labor Policy and Labor Sector Advisory Committees and also less formal, day to day give and take between the governmental and non-governmental labor experts and representatives. No longer were trade policies being made without significant attention to the views of workers. More than before, American labor became aware of what the governmental considerations must be.
Foreign Economic Research
Concerns about the practical employment impacts of foreign economic decisions brought changes in emphasis in the Department’s research activities.
ILAB extended its research work in the analysis of the effect of changes in trade policies on employment, the impact of transfers abroad of U.S. technology on U.S. competitiveness, and the evaluation of the labor market experience of workers displaced because of imports. Completed reports included an analysis of U.S. trade in chemicals, and
102
an evaluation of domestic import analysis by the Ex-Im Bank of cases involving transfers of U.S. technology to foreign countries. ILAB staff completed an analysis of the impact of various multilateral tariff-cutting formulas on employment in sensitive domestic industries. New projects were initiated including a survey of the characteristics and experience of recipients of trade adjustment assistance.
Trade Adjustment Assistance
The Department provided leadership and new initiatives in the efforts to improve the trade adjustment assistance program for those workers adversely affected by increased imports. The shortcomings of the provisions in the Trade Act of 1974 were recognized and initiative was taken to develop reforms for Congressional consideration in fiscal year 1978. Major new efforts were made to reach out to unemployed workers for whom the benefits were intended, to make the program more easily accessible to them, and to provide delivery of the benefits as quickly as possible.
The adjustment assistance program showed increased activity as ILAB made decisions on 938 worker petitions, 403 of which resulted in certification of 94,000 workers as eligible to apply for assistance. Workers in the steel, automotive, footwear, and electronic industries figured prominently among those certified as eligible to apply for trade readjustment allowances—a supplement to regular unemployment insurance—and employability services plus job search and relocation benefits.
The Department also carried out under the Trade Act of 1974 studies of 11 industries to determine, in industries petitioning the International Trade Commission for import relief, the number of workers who have been or might become eligible to apply for trade adjustment assistance. Television receivers, non-rubber footwear and sugar were among the industries which were studied and reported on to the President.
The Department participated with other agencies in developing for the President a proposed reform of adjustment assistance under the Trade Act of 1974. It further helped stimulate greater federal agency coordination in the field to improve the delivery of assistance to workers, firms, and communities which are import-impacted.
Foreign Labor Analysis
Since sensible foreign and domestic policy cannot be made without reliable knowledge of labor in the foreign
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countries, ILAB strengthened its team of regional labor advisors. During the prior years this element was weakened and all but eliminated. As a consequence, there was inadequate focus and direction of governmental labor programs upon the real and current problems in the countries abroad. ILAB now has senior labor specialists who were recruited to cover each of the following geographic areas: Africa, East Asia and the Pacific, Europe, Latin America and the Caribbean, and the Near East and South Asia.
American Labor Attaches
Strengthening and improving the American Labor Attache program was recognized as an imperative step to assure that the United States has accurate and current information on foreign labor and that U.S. labor institutions and practices would be understood by labor abroad.
The Department participated in the management of the Foreign Service, with the Deputy Under Secretary for International Affairs serving on the Board of the Foreign Service. The Department developed proposals for strengthening the U.S. Labor Attache Corps by creating new posts, recruiting qualified candidates from outside the Foreign Service, and increasing the authority of labor officers.
The Department co-sponsored with the Department of State several conferences for labor officers: in Tunis for Labor Attaches from posts in Africa and Latin America, in Munich for attaches in Europe, and in New Delhi for attaches in Asia and the Near East.
International Organizations
In this year the Department’s activities in respect to the International Labor Organization (ILO) were most significant. The President’s decision on November 3, 1977, to withdraw the United States from its membership in the ILO culminated two years of extensive overseas representations combined with consultations at home between the Departments of State, Labor, Commerce and the National Security Advisor and the leadership of the AFL-CIO and the Chamber of Commerce.
During the year the United States’ notice of intent to withdraw from ILO remained in effect, and the Department’s efforts were aimed at creating conditions under which the U.S. could remain in the organization. Under the ILO Constitution, the decision to stay or withdraw had to be made by November 1977. During the year, the Special
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Assistant to the Secretary for ILO Affairs consulted with member states in Asia, Africa, Latin America, and Europe in attempts to line up support for the U.S. effort to depoliticize the ILO. Results of the June 1977 International Labor Conference were not, however, sufficient to strengthen the possibility of remaining in the ILO. The President’s ultimate decision to withdraw was accompanied by plans to maintain informed future relationships.
The decline of U.S. involvement in the ILO increased the significance of U.S. participation in other international organizations including, particularly, the Organization for Economic Cooperation and Development (OECD). The Department continued to carry out its responsibilities for U.S. participation in the Manpower and Social Affairs Committee of the OECD. This included coordination of the Committee’s working parties dealing with employment, industrial relations, social indicators, quality of working life, income transfers, and statistics. Toward the end of the year, largely at U.S. initiative, it was agreed that the OECD would sponsor a high-level Conference on Youth Unemployment in December 1977.
International Technical Assistance
During the year, ILAB determined to support and expand technical assistance in foreign countries. These efforts assisted the U.S. foreign affairs agencies in promoting U.S. foreign policy objectives. They also contributed towards improving conditions for American workers. Most of ILAB’s overseas technical assistance activities aimed at strengthening democratic worker organizations in foreign countries and improving the effectiveness of foreign labor agencies in raising the standards of their workers. Improved labor standards in foreign countries narrow the gap between high American standards and lower ones abroad, thus improving the competitiveness of America in world trade.
One aspect of ILAB’s technical assistance work was financed by foreign countries. The multi-year training and development agreement signed by the Department and the Saudi Arabian Government in June 1976 provided for a comprehensive package of training advisory services and cooperation in planning and monitoring the construction and equipping of vocational training centers. Under the agreement, ILAB stationed 18 advisers in Saudi Arabia and was recruiting 21 others. In addition, the plans called for the expansion of 15 vocational training centers and the construc
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tion of 10 others. The development of instructional course materials in eight priority fields was being accelerated. Progress was also made on the construction side with the selection of the construction management and architectural and engineering firms. The project was being financed entirely by the Saudi Arabian government.
Training and hospitality extended to foreign labor technicians visiting the United States is an important aspect of United States international technical assistance and foreign policy. ILAB played an increasingly important role during the year. Technical and cultural exchange programs in the labor and employment and training fields were arranged for 1,166 visitors to the United States. These programs, in which many foreign trade union leaders and high-level government labor officials participated, were sponsored by the Agency for International Development, the Bureau of Educational and Cultural Exchange of the State Department, the United Nations, the ILO, and other organizations. Among the visitors was a team of labor leaders from 40 nations that came to the U.S. to view the 1976 national elections.
Technical and cultural labor cooperation was carried on by ILAB overseas as well as in the United States. In cooperation with the U.S. Information Agency, ILAB conducted a series of traveling seminars and exhibits in Brazil, the Republic of China (Taiwan), Poland, Yugoslavia, the Philippines, Guatemala, and Nicaragua. During the year, the decision and plans were made to revitalize the Department of Labor’s Technical Assistance Corps (DOLITAC), which in prior years had been an important role in overseas labor programs.
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Policy, Evaluation and Research
^Xiring the 1977 fiscal year, the Office of Policy, Evaluation and Research carried out a broad program of planning and developing policy for the Department, playing a major role in the design of the Better Jobs and Income Program (Welfare Reform), providing analytical support for many of the Department’s 1977 legislative programs, assisting in the development of a planning and budgetary process for the Department, and stimulating and coordinating evaluation and research.
The office helped establish an economic goal tracking and assessment system for the Secretary and key economic policy advisors. It represented the Secretary’s interest in a number of areas including the preparation of an annual report of the Trustees of the Social Security Trust Fund, the development of an Administration tax reform program, and preparation of the President’s anti-inflation program.
In addition, this office played key roles in areas of occupational safety and health programs, monitoring and build-up of PSE jobs, Inflation Impact Statement process, National Health Insurance, quality of work issues, trade adjustment assistance, and construction industry statistics.
The office sponsored two major conferences—one discussing the methodology for evaluating the Administration’s economic stimulus package and the other discussing women in the labor market and public service employment.
107
Benefits Review Board
louring the 1977 fiscal year, 721 new appeals were docketed by the Benefits Review Board. Of these, 419 arose under the Longshoremen’s Act and 302 under the Federal Coal Mine Health and Safety Act. In addition, 188 Longshoremen’s Act appeals and 72 Federal Coal Mine Health and Safety Act appeals were carried over from the prior fiscal year. Board decisions were issued in 228 Longshoremen’s Act appeals and in 112 Federal Coal Mine Health and Safety Act appeals. At the end of the fiscal year, 379 Longshoremen’s Act appeals and 262 Federal Coal Mine Health and Safety Act appeals were pending.
Board decisions in 173 Longshoremen’s Act cases, and in 55 Federal Coal Mine Health and Safety Act cases, have been appealed to the U.S. Circuit Courts. Decisions have been handed down in 125 Longshoremen’s Act cases and 26 Federal Coal Mine Health Safety Act cases. There are 48 Longshoremen’s Act appeals and 29 Federal Coal Mine Health and Safety Act appeals pending before the U.S. Circuit Courts.
The board’s decisions are published and are available to the public.
108
Employees* Compensation Appeals Board
The Employees’ Compensation Appeals Board (ECAB) carried out its decision-making activities by closing 563 cases during the 1977 fiscal year. The board has authority to make final decisions on appeals from decisions of the Office of Workers’ Compensation Programs in cases arising under the Federal Employees’ Compensation Act involving work-connected injuries and diseases.
The board began the year with 118 cases pending. During the year 646 new appeals were docketed and 563 were closed, leaving 201 pending cases at the end of the year. A continuing increase in workload is evident compared with fiscal year 1976, when 452 appeals were filed and 386 closed; fiscal 1975, when 305 appeals were filed and 296 closed, and fiscal year 1974, when 179 appeals were filed and 177 cases were closed.
Of the 201 pending cases, 20 were ready for board decision; 11 had been decided and were awaiting draft opinions; and 9 cases had been decided, with written opinions cleared by the board. These were being processed for printing. The balance were awaiting preliminary proceedings or pleadings, such as the filing of a memorandum by the Office of Worker’s Compensation Programs to justify its determination or for a reply by appellant pursuant to the board’s rules of procedure.
The average elapsed time between the docketing of appeal and its disposition by the board was 3.0 months in fiscal year 1977, the same as in fiscal year 1976.
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Information Activities
the new Administration took office and moved forward with new programs to promote economic recovery and to improve conditions for American workers, the Labor Department’s public information activities increased considerably during fiscal 1977.
As the Cabinet agency charged with launching the largest public service employment build-up since the Great Depression, the Department responded to heavy demand for information about the types of temporary jobs being created and the progress being made in hiring unemployed men and women to fill them.
Special job and training initiatives to reduce particularly severe unemployment among Vietnam-era veterans and youths were announced, and efforts were made to inform these groups about the assistance available to them.
The Administration’s program for putting millions of the jobless to work and stimulating economic recovery generated greater interest in the Department’s data on employment, unemployment, wages, prices and other key economic indicators.
Attention also was focused on the Department for its leading role in legislative proposals to raise the minimum wage for low-income workers, to stem the flow of undocumented aliens, and to reform federal labor law and the nation’s welfare system.
To assist the media in supplying the American public with accurate, timely information and to promote broader understanding of these important but often complex issues, Secretary of Labor Ray Marshall held frequent news briefings for media representatives regularly covering the Department.
The Secretary also held special news conferences to announce and explain particularly important developments affecting workers, including a major redirection and setting of “common-sense priorities” in job safety and health enforcement and steps being taken to improve administration of the Employee Retirement Income Security Act.
Throughout the year, the Department used news re
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leases, articles, fact sheets, publications, exhibits and other audio-visual materials as major channels for reaching the public with information about its activities and services.
When the federal minimum wage automatically increased for many American workers on January 1, 1977, news releases, publications and radio and television publicservice announcements were issued to help inform workers and employers of the new $2.30-an-hour rate and to promote voluntary compliance.
Other public service spot announcements, produced by the Department and given free air time by many radio and TV stations across the country, helped advise wage-earners of their rights under equal pay, age discrimination, equal employment opportunity and other federal labor laws.
Development of a modular exhibit system for the Department was completed, and a set of exhibit components was provided to each of the Department’s field information offices for use at conventions and other meetings. The exhibit includes portable, interchangeable panels describing in words and graphics Department programs and services bene-fitting American workers.
Specially tailored packets of news and features, mailed weekly to media serving blacks, Hispanic Americans, women, labor and small-town residents, continued to be valuable tools for communicating with the Department’s target constituencies.
In-depth coverage of program issues and developments was provided to other special-interest audiences through such agency periodicals as Job Safety and Health, Monthly Labor Review, Occupational Outlook Quarterly and Worklife.
In the Department’s continuing effort to improve communications and establish closer relationships with the groups it serves, top officials maintained a heavy schedule of speaking engagements around the country before organ-zations representing labor, business, state and local government, the academic community and others.
Information offices in Washington, D.C., and the field responded to numerous inquiries and publication requests and performed other appropriate communications tasks.
A common objective in all of the Department’s information acitivities during fiscal 1977 was to increase public awareness of the many laws and programs this Cabinet agency administers, giving citizens the knowledge and information they need to benefit from its many services.
Ill

Appendix Tables
Appropriations and Other Authorizations	114
Number of Employees on Labor Department Rolls
As of September 30, 1977	115
Comprehensive Employment and Training Act
Activity FY ’77	116
Characteristics of Participants in Comprehensive Employment and Training Act, Title I, Title II,
Title VI Projects, FY ’77	117
Selected Employment Service Activities, U.S. Totals
for 1966-77 and By State for FY ’77	118
Benefit Data Under State Unemployment Insurance
Programs, U.S. Totals for 1968-77 and By State for
FY ’77	120
Unemployment Compensation for Federal Employees,
U.S. Totals for 1968-77 and By State for FY ’77	122
Unemployment Compensation for Ex-Servicemen,
U.S. Totals for 1968-77 and By State for FY ’77	124
113
Appropriations and Other Authorizations
Fiscal Year 1977 Amounts
Employment and Training Administration, Program Administration................ 108,456,000
Employment and Training Assistance.......................................... 5,885,930,000
Temporary Employment Assistance ............................................ 6,847,000,000
Community Service Employment for Older Americans.............................. 150,000,000
Federal Unemployment Benefits and Allowances.................................. 860,000,000
Advances to the Unemployment Trust Fund and Other Funds..................... 5,000,000,000
Grants to States for Unemployment Insurance and Employment Services.......	1,501,800,000
Total, Employment and Training Administration......................... 20,353,186,000
Labor-Management Services Administration....................................... 50,754,000
Employment Standards Administration............................................ 99,252,000
Special Benefits.............................................................. 336,949,000
Occupational Safety and Health Administration................................. 130,333,000
Bureau of Labor Statistics .................................................... 79,517,000
Departmental Management........................................................ 53,940,000
Special Foreign Currency..........................................................  70,000
Total Department of Labor Appropriation............................... 21,104,001,000
Funds appropriated to other agencies’ programs administered by Department of Labor: Department of Health, Education, and Welfare (Work Incentive
Program).................................................................... 238,000,000
Agency for International Development............................................ 1,838,000
Federal Employees’ Compensation Act Claims.................................... 278,419,000
Grand Total........................................................... 21,622,258,000
114
Number of Employees on Labor Department Rolls As of September 30, 1977
All Agencies	Full-Time Employees District of		Other			
			Field	Total	District of Columbia	Field
	Total	Columbia				
All Agencies	 Employment and Training	. 15,402	6,461	8,941	1,167	417	750
Administration	 Labor-Management Services	.	3,634'	1,323	2,311	136	74	62
Administration	 Employment Standards	1,401	665	736	42	24	18
Administration	 Occupational Safety and Health	..	3,1142	872	2,242	234	110	124
Administration		2,591	468	2,123	92	62	30
Bureau of Labor Statistics		2,115	1,514	601	504	27	477
Office of the Secretary		31V	294	83	39	37	2
Office of the Solicitor	 Bureau of International Labor	641	347	294	25	12	13
Affairs	 Office of the Assistant Secretary for	251	233	18	38	38	—
Administration and Management ..	1,278	745	533	57	33	24
'Includes 7 employees in National Commission for Manpower Policy.
includes 40 employees in District of Columbia Workmen’s Compensation. ^Includes Working Capital Fund Employment.
115
Comprehensive Employment and Training Act Activity, Fiscal Year 1977
(Figures for 9 months through June 30, 1977)
Activity	Title I	Title II	Title VI
Total enrollment		1,111,700	321,600	374,600
New enrollment, fiscal 1977 ....	807,870	123,500	204,400
Cumulative enrollment by selected			
program activity:1			
Classroom training		438,800	1,500	1,300
On-the-job training		125,300	700	5,000
Public service employment ...	27,000	307,600	348,600
Work experience		427,400	10,000	14,700
Current enrollment, as of			
June 30, 1977		461,800	71,100	291,900
Current enrollment by selected			
program activity:			
Classroom training		183,200	600	800
On-the-job training		53,600	200	4,300
Public service employment ...	12,700	67,900	271,800
Work experience		163,700	1,500	11,400
Total terminations 		649,900	250,500	82,700
Direct placements		46,600	800	500
Indirect placements		170,200	25,800	19,500
Self-placements		55,500	11,200	10,600
Other positive terminations		174,100	179,300	14,700
Nonpositive terminations		203,500	33,400	37,400
'Totals include individuals who may be enrolled in more than one activity.
116
Characteristics of Participants in Comprehensive Employment and Training Act, Title I, Title II, and Title VI Projects, Fiscal Year 1977 (Figures for 9 months through June 30, 1977; percent distribution)
Characteristic
U.S. total: Number (est. cumulative enrollment) ...............
Percent ............................................
Male...........................................................
Female ........................................................
Age: Under 22..................................................
22-44 ....................................................
45-54 ....................................................
55 and over ..............................................
Education: 8 grades or less....................................
9-11................................................
12 and over ........................................
On public assistance: AFDC ....................................
Other.....................................
Economically disadvantaged.....................................
Ethnic group: White ...........................................
Black............................................
American Indian..................................
Other1 ..........................................
Spanish American...............................................
Limited English-speaking ability ..............................
Migrant or seasonal farmworker.................................
Veteran: Total.................................................
Recently separated2...................................
Special3 .............................................
Disabled..............................................
Handicapped....................................................
Full-time student..............................................
Offender.......................................................
Labor force status: Underemployed .............................
Unemployed...................................
Other........................................
Receiving unemployment insurance...............................
Title I	Title II	Title VI
1,111,700	321,600	3/4,600
100.0	100.0	100.0
51.7	60.8	63.2
48.3	39.2	36.8
50.5	20.0	19.2
41.8	64.4	64.8
4.5	9.6	9.9
3.2	6.0	6.1
9.9	8.7	8.7
39.5	15.6	17.7
50.6	75.7	73.6
16.0	5.5	8.1
10.8	8.6	7.3
78.1	49.8	56.5
56.9	67.1	65.0
34.3	21.3	22.9
1.4	1.2	3.2
7.4	10.4	8.9
13.3	13.7	11.7
5.2	5.7	5.0
1.5	1.9	1.3
10.5	22.1	22.5
3.6	4.9	5.7
3.1	7.4	7.0
0.6	0.7	0.8
4.7	3.2	3.2
23.4	1.9	1.8
6.8	2.7	2.8
5.3	5.3	4.2
74.1	73.1	69.3
20.6	21.6	26.5
7.4	13.6	14.6
'A large portion in this group reflect the nonclassification in Puerto Rico by ethnic categories. ’Enrolled within 4 years of discharge.
’Served in Indochina or Korean theater of operations from August 1964 to May 1975.
117
Selected Employment Service Activities, U.S. Totals,
1966-77, and by State, Fiscal Year 1977
(Figures for 9 months through June 30, 1977)
Placements
Fiscal year and State	New applications1	Total counseling interviews	Test administered	In nonagricultural industries	In agricultural industries
1966		10,625,700	2,285,316	2,594,175	6,586,827	4,305,207
1967		10,773,823	2,399,120	2,277,114	6,142,153	4,112,938
1968		10,693,230	2,599,022	2,099,955	5,759,923	4,572,501
1969		9,962,834	2,503,928	1,783,298	5,524,269	4,864,495
1970		9,957,060	2,522,963	1,489,561	4,603,597	4,550,348
1971		9,740,415	2,388,563	1,198,423	3,596,832	3,263,541
1972		9,370,000	2,471,000	1,558,000	3,610,000	2,715,000
19732		11,485,026	2,564,935	1,611,500	4,516,703	2,104,931
1974		11,905,444	2,021,731	1,345,169	4,913,391	1,758,096
1975		12,348,586	1,643,521	1,676,826	4,273,911	1,497,591
1976		12,226,482	1,562,155	1,034,239	4,640,500	593,931
1977		9,008,673	1,233,555	834,199	3,607,414	200,168
Alabama		189,478	20,915	31,841	70,021	805
Alaska		31,363	2,421	1,573	17,627	114
Arizona.. 			158,475	12,101	5,587	53,514	3,188
Arkansas 		139,970	12,333	9,810	91,622	1,697
California		834,848	67,738	16,678	334,047	30,339
Colorado		175,359	15,608	7,700	57,104	3,771
Connecticut		110,063	14,569	5,484	32,584	790
Delaware		21,824	3,123	919	4,671	77
District of Columbia	78,693	11,244	5,471	21,216	49
Florida		285,403	38,488	22,043	114,873	8,656
Georgia		195,343	39,833	14,149	80,933	1,078
Hawaii		49,062	3,481	1,043	18,624	580
Idaho 		62,010	8,066	9,269	29,049	3,306
Illinois		345,782	55,598	16,841	105,356	1,599
Indiana		231,006	18,592	21,781	70,096	831
Iowa		128,682	7,591	20,493	72,658	2,200
Kansas 		95,077	11,300	4,006	46,424	1,932
Kentucky		143,020	34,643	28,774	47,778	750
Louisiana		148,951	16,535	20,158	60,244	839
Maine		39,194	11,971	1,793	19,002	398
Maryland		101,424	14,611	5,906	23,203	474
Massachusetts		193,822	34,808	6,501	72,684	5,069
Michigan		453,455	31,517	20,506	82,747	3,015
Minnesota		131,668	20,379	19,663	58,319	3,365
Mississippi		139,503	57,978	35,036	70,196	833
Missouri		212,850	26,554	40,618	98,390	1,688
Montana		60,746	34,062	11,485	29,528	3,185
Nebraska		58,422	8,940	6,269	35,680	1,235
Nevada 		58,268	5,773	5,817	28,028	1,028
New Hampshire ....	37,846	3,909	1,392	12,308	181
New Jersey		214,832	24,474	7,350	72,813	1,455
New Mexico 		88,188	15,790	4,709	36,280	1,667
New York		448,885	106,343	54,740	291,249	6,386
North Carolina ....	242,097	51,897	41,249	78,179	16,815
North Dakota		39,665	8,647	9,361	27,327	1,707
Ohio		406,798	19,527	41,923	93,446	4,311
Oklahoma		179,394	32,394	20,927	112,698	8,133
Oregon		162,399	28,341	10,301	60,417	15,786
Pennsylvania		367,012	47,300	31,719	134,835	1,219
Puerto Rico		153,070	14,956	3,082	50,830	5,930
Rhode Island		35,798	9,925	1,190	19,123	148
118
Selected Employment Service Activities, U.S. Totals,
1966-77, and by State, Fiscal Year 1977—(Continued)
(Figures for 9 months through June 30, 1977)
Placements
Fiscal year and State	New applications'	Total counseling interviews	Test administered	In nonagricultural industries	In agricultural industries
South Carolina ....	125,027	22,284	20,027	48,830	2,225
South Dakota		37,449	11,832	9,080	35,710	1,123
Tennessee		173,394	22,502	19,457	75,033	1,708
Texas 		601,760	58,441	78,711	309,625	16,686
Utah		76,332	19,453	19,541	48,724	1,521
Vermont		28,924	5,885	1,301	9,190	429
Virginia		214,882	21,871	31,347	53,784	3,729
Washington		195,794	12,756	8,323	70,759	20,728
West Virginia		82,160	8,685	6,836	37,274	2,131
Wisconsin		193,091	38,729	11,011	61,852	2,095
Wyoming		30,115	6,842	3,408	20,910	1,164
NOTE: Data reflect transactions.
'Reflect individuals.
2Excludes Washington State.
119
Benefit Data Under State Unemployment Insurance Programs, U.S. Totals, 1968-77, and by State for 12 Months Ending June 30, 1977
120
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