I thought I might quickly give you the highlights. On July 13, in a joint press conference in Washington, the Secretary and I released this document to the press in Washington. I do not know whether any newspaper in New Jersey even carried it. I do not think it is a secret document. If anyone here is interested in it, I will certainly see that you get a copy. I would proudly try to claim a part of the authorship. You must admit, in spite of our kidding and bragging of yellow journal, that this poor man from New Jersey was carried along for a very important ride on a very important national problem. I am more humble as a result, rather than the reverse. But the reason I speak of this is: I think it is an area that concerns the labor commissioners and deputies, something that we have not dug into.

The first call I made when I got stuck with my half of this assignment was to Mr. Peterson in Vancouver. I noted when we were there 2 years ago that some attempt had indeed been made there to decasualize the construction industry. In fact, with the help of our colleagues in Washington, we found that the United States of America is the only major country in the world that has not made a substantial effort toward the decasualization of this costly intermittent nature of construction. We took a look at the collective bargaining practices in the construction industry as a whole, looking at it, of course, through the focus of this important local of operating engineers. I will read a few paragraphs from the report, because I think we can cover the ground faster that way. "The independent local settlements common in the construction industry are heavily affected by the long-established and pessimistic habit of viewing the industry as highly seasonal and characterized by great uncertainties which hover over contracts, business fortunes, and job assignments. This has led to the view that gains must be taken wherever and whenever they can be obtained to balance periods in which gains are not feasible, and to the development of an historic process of justifying relatively high hourly rates as being necessary to provide reasonable annual earnings.

"Yet seasonality and intermittent work mean high costs and wasted resources. If these root problems can be met, the result will be substantial savings in costs and at the same time the elimination of some of the human uncertainties that cast a cloud over bargaining. From the viewpoint of stabilization, the right answers in the construction industry depend on meeting these problems."

I might say, it was this vigorous president of the local who put the seed in our minds, I think, that the business of addressing ourselves to the excessively high rate advance could be met in the eyes

of the union, its leadership, and its membership by lower rates over the long pull, if there were some guarantee that there would be opportunity to work.

"The costs associated with intermittent and seasonal work are not only reflected in negotiated wages; they develop in other ways."

I think they are saying: Overtime premiums, for example, are about a billion dollars a year for the construction industry in the Nation as a whole. In the unemployment insurance system, only half the cost of unemployment benefits for construction workers are supported by taxes paid by construction employers and construction employees, despite merit-rating provisions.

"In the Nation, unemployment insurance benefits in this industry run close to two-thirds of a billion dollars a year, of which only half is covered by taxes on construction payrolls and wages. The cost of seasonable unemployment in general is one of the important national problems."

I am hearing something that I did not know before, even though the numbers were scattered all over my desk.

"One-fifth of the total unemployment in the United States is seasonal, and unemployment in the construction industry alone is half of this. A significant proportion of all of these costs are costs to the general taxpayer. The Federal Government alone provides $180 million a year for construction work in New Jersey-financing which covers at least a quarter of the work of the operating engineers and their employers. Operating engineers usually work outdoors, and their employment is therefore affected by weather. But it is also affected by habit and by operating practices which can be changed.

"The organization and scheduling of work, particularly the letting of contracts, is also an important factor leading to seasonal bunching of work."

Here I guess I took some risks because at various points during this, I had to tell my colleagues in the cabinet in New Jersey, as well as my Governor, that New Jersey did not look so hot when it came to the dispatch which untangled the bureaucracy of letting contracts. For example, this is not unique to my State. The great majority of highway-building contracts are put out for bids in this country in July and August, the key months when the work should be underway. And it was an interesting study just to check through the paperwork on what should be the fitting months of the winter. In 1965, in our own State highway department, the largest volume of highway contract awards did occur in July and August.

"Some operating engineers are employed year-round by the same employers. Others receive the equivalent of a full year's employ

ment or more from several employers during the months of peak activity. Forty percent of the membership of the local at work in 1964 had at least 1,800 hours of work; almost 30 percent had 2,000 hours or more. Significant proportions of these hours were paid at overtime rates. At the other extreme were engineers who worked no hours at all, or less than a few hundred hours during the year. Most of this group received substantial earnings from other activities. The major impact of seasonality and intermittent employment is felt by about one-third to two-fifths of the members of the local who are attached to the industry and rely on it as their major or sole source of work."

This is an important matter. Concern over seasonality and irregularity of work has invariably resulted in general increases in wage rates that have gone to all workers, whether employed year-round or not. There is little justification for continuing a bargaining habit which provides double benefits for those who receive both the higher rates and full annual employment.

“It will take a new approach to deal with the problems of the intermediate hours group-those who rely upon operating engineer employment for their livelihood, and have total annual employment of 700 to 1,600 hours. The role of Government will be particularly important." This is why I wanted to talk to you. I won't try to speak for the Secretary on this. But I think there is a new commission of our jobs that is exploding in front of us here if we are going to wrestle with this constructively.

"The Federal and State Governments and the public authorities finance a volume of work sufficient in size to create or eliminate seasonal patterns."

May I state this? Major work being financed through the State, through municipalities and the U.S. Public Health Service in connection with sanitary sewer facilities can as easily be done in the winter months as during the highway building months of July, August, and September.

Secretary Wirtz, in the course of our studies, had the chance to pick the brains of a number of distinguished foreign leaders in this field. Mr. Olsen, Head of the Labor Board in Sweden, said that for 15 years, they have been attacking seasonality. They have reduced seasonal unemployment in the construction industry to the point where in the past few seasons, it is 4 average days' loss per year. In New Jersey, it is more than 4 months' loss per year.

"First, the bunching that exists in awarding contracts for different types of construction by the State of New Jersey."

I would make that perfectly clear-and in addition, by public authorities and local groups-it can be diminished by conscientious

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planning at all levels of government by the public agencies responsible for construction. Stabilizing employment has not, in the past, been an assigned mission of these agencies; such an assignment would yield results.

"Many large contractors use modern management systems, including computer-based methods, in their own administration. Such systems can be installed by the public agencies, with the additional specific objective of scheduling work for time that is now unused, in periods when construction is possible.

"Second, the present technical standards used in Government specifications can be updated to reflect modern advances in technology. "Third, there are a great many tasks in New Jersey which need to be done, which can be done in slack periods, and which call for the skill of operating engineers:

"Stream channel improvement and bank protection; windbreaks; sewage and flood control projects; work on parks, ponds, beaches, and other recreational facilities all over the State.

"Major new developments respecting the meadowlands in northern New Jersey, and work in the Delaware Water Gap area.

"Work on Federal facilities.

"Work for which Federal matching funds are available, other than roads, and for which the availability of operating engineers' time might be calculated in developing a local matching contribution.

"Many of these are tasks for which public financing is not now fully available, but which could be organized to provide off-season employment.

"There is a substantial need for the training and retraining of workers in the operation of new types of equipment and in the maintenance of equipment, during off seasons. Equipment has become increasingly complex in a trade in which there has been no formal training or apprenticeship, and where accident rates are high.

"MDTA training programs in several States have demonstrated the usefulness of 6-week training sessions involving large numbers of operating engineers.

"Training should be supplemented by new types of adult education. Operating engineers in the United States whose education is greater have higher annual earnings at their own trade. In New Jersey, education undoubtedly helps a great many operating engineers who are young in terms of age and experience to enjoy greater hours and earning opportunities than their seniors.

"The volume of construction activity in the United States has been growing."

Others can cry the blues but I think and the Secretary thinks that, in our lifetime at least, there is never going to be a shortage of work;

even those who feel recession or depression are the first to admit now that no country, especially ours, is going to sit idly by without accelerated public works and without massive public works projects which will need the skills of these men.

So what we have done in this recommendation is to set forth a number of steps that should be taken, we hope first in New Jersey, and if this is accepted and carried through, that these may be the beginning steps for a new look at this throughout the country.

First, we are going to take a look at our own house, particularly what the various States and Federal agencies do with respect to bidding practices, the paperwork, the planning and scheduling of work. Then, with the Secretary's leadership, active attempts are going to be made to reduce the seasonal-limit work factor in the construction industry as a whole. Though I would not speak for him, I foresee a massive national approach that will involve the States, the Federal Government, and many agencies. How much is law, how much is practice, and what should be done?

Now, the new contracts in New Jersey, if it follows the recommendation of this report, will include a form of guaranteed earnings opportunities up to 1,600 hours for those who have at least a 700hour attachment to it.

The report, which I will be happy to send you, will spell out the way by which this would be financed. It would be by way of a centsper-hour contribution for the work during what is now the building season in order to provide a fund which would be administered by a development authority. It would be developed in cooperation with the union, with the contractor, and all public agencies involved the work and training opportunities that would provide earning opportunities up to the 1,600-hour guarantee.

We think this would be a declining necessity, because we see in it the possibility of extending the workyear without specially created opportunities. But there would probably be also the need for some of this and I would hope, personally, that a lot of that investment would be in the direction of training and might even include some demonstration work per the suggestion to me by the president of the local by way of showing less developed countries how to use this massive building equipment to make better transportation facilities, better operations, etc.

I think, Mr. President, this is a basic outline of what we are trying to do. What we have suggested is to create a climate in which the two parties are now joined in effect by the third party, which has never really been a bargaining party; namely, the public interest. And it will be there for a time in the person of the Secretary of Labor