Report of the State of Illinois Commission on Automation And

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, a DOCUMENT RESUME ED 021 984 VT 004 125 By-Karp, William DANGER! AUTOMATION AT WORK; REPORTOF THE STATE OF ILLINOIS COMMISSIONON AUTOMATION AND TECHNOLOGICAL PROGRESS. Illinois State Commission on Automation andTechnological Progress, Chicago. Pub Date 1 Apr 67 Note-110p. EDRS Price MF-$0.50 HC-$4.48 Descriptors- ADULT VOCATIONAL EDUCATION.*AUTOMATION, BANKING, *CHANGEAGENTS, ECONOMIC ROLE, FACTORS ECONOMIC PROGRESS, EMPLOYMENTOPPORTUNITIES, FIELD STUDIES *GOVERNMENT PLANNING, PUBLIC POLICY, INSURANCE COMPANIES INVESTIGATIONS,MEAT PACKING INDUSTRY, PROGRAM SOCIAL FACTORS STATE AGENCIES *TECHNOLOGICALADVANCEMENT, VOCATIONAL EDUCATION Identifiers- Illinois, Manpower Development andTraining ;.ct Programs, MDTA Programs The 74th Illinois General Assemblycreated the Illinois Commission onAutomation and Technological Progress tostudy and analyze the economicand social effects of automation and othertechnological changes on industry, commerce,agriculture, education, manpower, and society inIllinois. Commission members visitedindustrial plants and business and governmentoffices having automated andcomputerized systems. One-day hearings wereheld on the .meat packing,banking, and insurance industries, and a 2-day hearing was, held onthe vocational educationand manpower training programs. TheCommission's investigations revealedthat (1) Technological change has brought about such events asobsolescence of meatpackingplants, a decline in railroad jobs, and a reduction inital mining operations, (2) The Manpower Development and Training Act is failing to meetthe needs of changingindustries, (3) The vocational education system is notkeeping up with current needs,(4) Industry is not contributing enough to retrainingworkers displaced by automation,(5) Government agencies are not doing enough toconduct research into new occupationalfields, and (6) The financing of job programs must bechanged so that local authorities canbe brought into closer contact with the programs.Based on its findings, theCommission formulated 22 recommendations in the natureof proposals and suggestedchanges in public policy and programs. (HC) C f

IP * I If o o et .i a 1110 WELFARE U.S. DEPARTMENT OFHEALTH, EDUCATION & OFFICE OF EDUCATION

REPRODUCED EXACTLY ASRECEIVED FROM THE THIS DOCUMENT HAS BEEN POINTS OF VIEW OROPINION PERSON OR ORGANIZATIONORIGINATING IT. REPRESENT OFFICIAL OFFICEOF EDUCATION STATED DO NOT NECESSARILY

POSITION OR POLICY. MEMBERS CHAIRMAN STATE SENATORS STATE REPRESENTATIVE CHESTER P. MAJEWSKI MORGAN U. FINLEY 73197 W. ADDISON ST. JOHN A. GRAHAM CHICAGO. ILLINOIS 10934 BERTH. T. ROSANDER TELEPHONE 111.0371 PAUL A. ZIEGLER

VICE CHAIRMAN STATE REPRESENTATIVES STATE SENATOR STATE OF ILLINOJS I. DAVID JONES TOM MERRITT WILLIAM. J. SCHOENINGER 2021. MARKET ST. COMMISSION ON AUTOMATION JAMES VON BOECKMAN HOOPESTON. 11.LINOIS110542 JOHN CLINTON YOULE TELEPHONE SO AND TECHNOLOGICAL PROGRESS PUBLIC MEMBERS SECRETARY MILTON BRAM MR. WILLIAM KARP RUDDY W. DAVIS 900 N. MICHIGAN AVE. EUGENE GLOVER CHICAGO. ILLINOIS MIMI LARRY S. PROVO TELEPHONE MI 2.3412

The Honorable Otto Kerner Governor of the State of Illinois and Members of the Illinois General. Assembly

Gentlemen:

In behalf of the members of the Illinois Commission on'Aufomation and Technological Progress, I have the honor to transmit to you a Report ofactivities as required by HB 1310.

This Report summarizes information and data received in proceedings before the Commission duringthe period 1965-67. Based on our findings, we present a series of twenty-two (22) recommendations which we believeworthy of your consideration.

Members of the Commission wish to express their appreciation for an opportunity to serve the State ofIlli- nois in this field.

Respectfully submitted,

7) Chester P. Majcwski Chairman There is danger in automation, but only if do nothing about it. 1967 Report of the State of Illinois Commissionon Automation and Technological Progress

.Invention and innovation lie at the heart of the process by which America has grown and renewed itself.

TECHNOLOGICAL INNOVATION : ITS ENVIRONMENT AND MANAGEM EN"! U. S. Department of Commerce, January, 1967

Library of Congress Catalog Card Number: A67-7275

2 RE PORT _

ID of the State of Illinois Commissionon

Automation and Technological Progress,

Prepared under the Direction of WILLIAM KARP, Public Member and Secretary

State of Illinois, April 1,1967 State of Illinois Commission on .., Automation and Technological Progress

OFFICERS OF THE COMMISSION

CHAIRMAN VICE CHAIRMAN SECRETARY State Re_p_r_esentatiTie' State Senator Public Member CHESTER P. MAJEWSKI Tom MERRITT WILLIAM KARP

MEMBERS OF THE COMMISSION

STATE SENATORS STATE REPRESENTATIVES MORGAN M. FINLEY J. DAVID JONES

JOHN A. GRAHAM CHESTER P. MAJEWSKI

TOM MERRITT WILLIAM J. SCHOENINGER

BERTIL T. ROSANDER JAMES VON BOECKMAN

PAUL A. ZIEGLER JOHN CLINTON YOULE

PUBLIC MEMBERS MILTON BRAM* WILLIAM KARP Milton Bram & Associates, Inc. President, William Karp Consulting BUDDY DAVIS Company, Inc. Staff Representative, United States Steelworkers, LARRY S. PROVO District No. 34 Executive Vice President, Chicago & North Western Railway EUGENE GLOVER General Vice President, ReplacedFrank H. Cassell International Association who resigned to become Direc- of Machinists tor of U.S. Employment Service

For More Information on the Appointment and Composition of the Commission See Page 12. Table of Contents

Letter of Transmittal 1

Commission Officers; CommissionMembers 4

Foreword and Acknowledgements 6

Illinois Takes a Hard Look atAutomation 11 A Summary

Illinois and Automation Mirror The Nation and Automation 17 An Introduction

The Commission Investigates 33 Digest of the Hearings

Meat Packing Industry 34 6 Banking Industry 49

Insurance Industry 61

Vocational Education and Manpower Training 70

1965-67/The Cost of Acting onAutomation 95

1967-69/The Commission Program 96

Proposed 1967-69 Budget 98

Recommendations of the Commission 99

Appendix A ppendiX I The Creating Legislation 104 House Bill 1310

Appendix 2 List of HearingWitnesses 105

5 FOREWORD ANDACKNOWLEDGEMENTS

cientific and technologicalprogress has been moving forward with greatmo- mentum. In 1961 alone, 49,980 inventionswere patented from among 85,776 applications. The number of inventions patented inthat one year was equal to the number patented in the first hundredyears of United States history. American standards of life have undergone markedchanges in every direction. In recent years, through television, radio,magazines and newspapers, the public at large has come to recognize the vast effects of scienceand technology upon their daily lives. Everywhere there is speculationabout the future and the meaning of these developments for hiiman life. Most people have lookedupon technological progress and these changes as beneficial. Both nuclear fission and fusion promise entirelynew ways of thinking about what energy is, where itcomes from, and how it can be put to work. Tiavel to distant points has been shortened from weeksor even months to hours. Com- Munication time has been abbreviated from daysto microseconds. Many dirty, menial and repetitive jobs have been eliminated.Working hours have been shortened. Increased wages in the United Stateshave raised living standards fora larger number of people beyondthose in any country in history. More leisure time prevails. The quality of life itselfhas been raised alonga broad front. New interests and experiences have addedzest to the lives of many Americans. On the other hand, rapidly advancingtechnology has heightenedconcerns and fears that have led some to question its benefits.One of the greatest concerns today is the possibility of annihilation by"the bomb." Anotherconcern is the harmful impact of modern technologyupon the health and welfare of the community. Urban congestion, slums, and depletionof natural resources are also persistent problems. Still anotherconcern is the impact of industrial, technical and urban aggregations upon human personalityresulting in such symptomsas inse- curity, monotony, alienation, and mental illness.Yet another concern is the belief that technological change, including automation,will soon eliminatemany unskilled, semi-skilled, skilled, andeven office jobs. On balance, scientific and technologicalprogress has been a boon to the people

6 of Illinois and the country. There is no reason tocurtail innovation or slowdown the rate of progress. The great task before 1.2iS to exerciseintelligent control over science andtechnology towards the end of fulfillmentof human purposes and social goals. In this direction lies theenrichment of human life forall of our citizens. Technological innovation carries great promisefor Illinois. But whatwill be the effects of these developments uponindustry, agriculture, government, community life and culture? Will increases inproductive output of goodsand services mean large scale jobdisplacement? How will productivitygains be shared? Will unemployment increase and persist?Will economic stability beimpaired? The 3e and many other questions can beasked, but they cannot beanswered easily. In fact, at the present time, we do notknow the precise impacttechnological progress has had or will have in the future uponindustry, labor and government.We know even less how science andtechnology affect social,economic and political institutions. To search for an answer tothese and other questions, Isponsored H.B. 1310 legislature. House Bill and was joined in this sponsorshipby other members of the 1310 was passed in the 1965session of the Illinois GeneralAssembly and signed into law by Governor OttoKerner. This bill created theIllinois Commission on broad powers Automation and Technological Progress.The Commission was given for the period 1965-67 tostudy and analyze the effectof automation and other technological changes on thebusiness, industry, andagriculture of Illinois; on educational and training programs; onemployment; on Illinoisgovernmentin short, on the entire State andits citizens. The Commission was given anappropriation with which to carry outits responsibilities. The amountprovided proved to beinadequate for the tremendous task given to theCommission. Fortunately, however,the personal and financial assistance provided by membersof the Commission andpersonnel of Illinois function. Without departments and private organizationsenlarged our capacity to this help, the work of theCommission would have beenseverely handicapped. Progress represents The Illinois Commission onAutomation and Technological Illinois and analyze its total the first attempt to lookcarefully at automation in has effects. In the months thathave ensued since itsinception the Commission conference carried its study tO the mills,the factories, thepublic agencies, and tables, meeting with specialistsknowledgeable in the effectsof automation on Commission members business, labor, agriculture,education, and government. the have learned about theplans of industry, theaspirations of workingmen, government leaders. They problems of communities, andthe solutions proposed by have heard many hundredsof pages of testimony aboutautomation. sub- As a result of this study,the Commission hasprepared and herewith is plans, and new pro- mitting 22 recommendationsproposing new procedures, new grams fordealing with automationand technological change. under- This Report on the workof the Comniissionembodies the Commission's in Illinois today, thepromises standing of automationand technological progress

7 these great advances hold, and the problems these technological changes lead to if they are not employed for the benefit of all citizens. This Report is submitted to the Executive and Legislative branches as the basis for further action on automation in Illinois. It should be understood, however, that this Report necessarily represents an "interim" statement on automation and related subjects. The whole field of technological change is so dynamic, so complex, so much in flux that no document based on such a brief period of investigation could be a finalstatenient on the subject. Given the time and funds available to it, the Commission went as far as it could go in its study. Yet much more remains to be done inIllinois to understand thc nature of automation, to avoid its problems, and thereby to capitalize on itsim- mense potential benefits. We owe a debt of gratitude to the members of the Commission who conscien- tiously gave of their time and effort. Those worthy of mention in this connection are: State Senators Morgan Finley, John A. Graham, Tom Merritt, Bertil T. Ro- sander, and Paul A. Ziegler. State Representatives J. David Jones, William Schoeninger, James von Boeck- man, and John Clinton Youle. Public Members Milton Bram, Buddy Davis, Eugene Glover, William Karp, and Larry S. Provo. We acknowledge a special debt to our Secretary, William Karp, for hisprofes- sional competence in developing and coordinating. Commission activitieg.He gave unstintingly of his knowledge and of himself. Much of the sacess and accomplish- ments of the Commission can beattrthuted to his efforts. We wish to thank John E. Cullerton, Director, Illinois Department ofLabor, for his counsel, advice, and assistance. His recommendation of Miss Esther E. Espenshade, Supervisor, Division of Statistics and Research, to work with the Commission proved to be an invaluable asset to us. Samuel C. Bernstein, Admin- istrator, Illinois Bureau of Employment Security and Gene H. Graves, Director, Illinois Department of Business and Economic Development were most generous with their counsel and support. Although it is impossible to acknowledge all those who assisted us, I should like to mention in particular the following: Frank H. Cassell,Director, U.S. Employ- ment Service, aiv original Public Memberappointee; Irving Beller, Economist, AFL-CIO; DeVer Sholes, Research Director, and John M. Coulter, Research Associate Director, Chicago Association of Commerce andIndustry>Robert M. Perry, Manager, Labor Relations Department, Illinois State Chamber of Com- merce; and Mrs. Miriam K. Ringo, assistant to theGovernor. We also wish to thank all those who appeared as witnesses atCommission Hear- ings and otherwise gave of their knowledge. To Miss Charline S. Kaehny we express appreciation for her diligentsecretarial assistance.

1 Special thanks are due Arthur Sallander Studios, Chicago, for thecontribution of the cover design. Lastly, we owe a deep debt of gratitude to Kenneth M. Wylie, Jr. for hiseditorial skill and writing ability in connection with this Report.

Chester P. Majewski Chairman, State of Illinois Commission on Automation and Technological Progress

9 ..o Am... 111111111L:

Shown testifying October 20, 1966 before the hearing conducted by the Illinois Commission on Autotpation and Technological Progress is William M. Fishback (seated far right at microphone), Assistant Chief of Downstate Operations, Illinois Department of Public Aid. Commission members facing him are (l. to r.) William Karp, president, William Karp Consulting Company, Inc., Chicago, secretary and public member of the Commission; State Rep. Chester P. Majewski (D. Chicago), chairman of the Commission; State Rep. William Schoeninger (D. Chicago), chairman of the committee conducting the hearing; and Milton Bram, Bram & Associates, Chicago, public member of the Commission.

10 1 Illinois Takes aHard Look At Automation a summary

What Has Automation Done toIllinois, What Can Automation Do forIllinois?

irhe changes of automation arrivelarge, fast, and sometimes painfully. Illinois is not the same today as it wasbefore automation came in thelatter 1950's, and Illinois wants to know why. And notonly why, but also, What went wrong? and, What went right? Century-old meat-packing plants that madeChicago, "Hog butcher to the world," suddenly moved out of the state, and15,000 Illinois citizens were out of work. Insurance firms stopped hiring the samekinds of employees. Often the newest types of industries never came toIllinois in the first place. And theState's educational system seemingly kept teaching students todo jobs that industry didn't want done anymore. To find the reasons for these changes,Illinois in 1965 created the Stateof Illinois Commission on Automation andTechnological Progress. The job assigned to the Commission was togive automation in Illinois ahard lookbut not a long look because of thebrief time available to theCommission for its study. Then, having reviewedand analyzed automation andother technological changes in the State, the Commission was tomake recommendations to the Illinois General Assembly for new ways tomake automation a more useful tool

11 for Illinois business, industry, agriculture, and public agencies and a less troublesome change for Illinois citizens. These recommendations the Commission has Made, 22 of them, ranging from a provision that industry give employees advance notice of plant shutdowns to a suggestion that the State develop systems, including computer applications, for disseminating research information throughout Illinois to industry, universities, and State agencies.

Producing the Remedy Although California has had an automation commission, West Virginia has legislated on automation, and other states have taken executive action in this area, the Illinois Commission on Automation and Technological Progress is the only functioning interim state commission in the United States focusing its attention directly on the impact of science and technology. . The bill creating the Commission, HB 1310,1 was passed on August 18, 1965. Chief sponsor of 1310 was Chester P. Majewski (D. Chicago). According to the provisions of this Act the Commission was to: c`. ..study the economic and social effects of automation and technological changes in industry, commerce, farms, labor market, and in society." The Bill further stated: "The Commission shall study, investigate, analyze, and assess existing knowledge, problems, growth, effect and future tendency of automation and all other technological changes on industry, commerce, farms, labor market and society of the state of Illinois, and on the employment, training, retraining, economic change, economic hardship, social implications and benefit to industry, labor and the public, and on the programs, policies, operations, finances and fiscal burdens of the government of our state and its subdivisions, that have resulted and will result from such changes."

Money and Hands to do theWork The creating Act provided a sum of $25,000 to finance the work of the Com- mission during the 1965-67 period. And it provided that the body should consist of 15 members, including five members drawn from the House of Representatives, to be appointed by the Speaker of the House; five members from the Senate, appointed by the President pro tem of the Senate; and five members of the public, appointed by the Governor. The Commission officers, drawn from this membership, are State Rep. Chester P. Majewski, chairman; State Sen. Tom Merritt, vice chairman; and William Karp, secretary. For the purpose of expediting its work, the Commission was organized into four functional committees, covering, 1) Automation Developments _in Industry and

1For the full text of H.B. 1310 see Appendix, pg. 104.

12 Education and Re- Agriculture; 2) Manpower, Unions, andLabor Relations; 3) search Projects, and 4) GovernmentPrograms. subject areas The work of these committees wasstructured into 17 principal covering several broad topics including: labor, employ- The effects of automation onindustry, agriculture, government, ment, and communities. and Federal Studies now underway concerningautomation, including State studies and university research. Educational and training programsintended to cope withtechnological change. Government, industry, and union programs nowin operation and beingplanned that are related to automationand its effects. Recommendations for legislation todeal constructively withautomation.

The CommissionListens, Studies, Investigates understand what it can To find out what automatiorhas done to Illinois and to of industry, do for Illinois, theCommission has conferredwith representatives members have traveled to auto- labor, business, government,and education. Its leaders who have taken mated factories, mills, andoffices; met with government possible remedies with action on automation andtechnological change, discussed and educators: During1966 labor leaders, governmentand business executives, conferences, and field the Commission conducted afast-paced series of hearings, trips, inciuding the following: Hearings September, 1966; and Voca- Meat Packing, July, 1966;Banking and Insurance, tional Education andManpower Training,October, 1966. Conferences Washington, D. C., August,1966meetings with leadersof Federal Executive and labor organizations. and Congressional groupsand leaders of industry California, December, 1966a surveyof the work of theCalifornia Commission for the purpose ofbenefitting from on Manpower,Automation, and Technology, that Commission's findingsand experience. Field Trips Franklin Visits to the InlandSteel Company;Caterpillar Tractor Company; Bureau of Life Insurance Co.;the American BankersAssociation Convention; Labor Statistics, and U.S.Treasury.

Seeing a New World ):- before the eyes of theinvesti- The picture that thesestudies and inquiries created dramatic than anythingdisplayed gators was a picture moreconstantly changing and by network TV,COMSAT, or Cecil B. DeMille.

13 1. ..,,,

To gain first-hand familiarity with technological change, members of the State of Illinois Comnzission on Automation and Technological Progress made field trips to Illinois industrial installations including the East Peoria plant of the Caterpillar Tractor Co. where they are shown, above, viewing a tape-controlled production machine in operation. While Plant Manager Gordon Swardenski (right) explains the automated equipment and Orville Masterson, machine operator (second from right) stands by ready to assist him, Comnzission members observe, including (I. to r.) Rep. Jamesvon Boecknzan; Rep. William J. Schoeninger; Sen. Toni Merritt, Commission vice chairman; William Karp, public member, Commission secretary; and Rep. J. David Jones.

It was a picture of factories, farms, offices, schools, and whole communities changed forever. Meat packing closed its biggest slaughtering plants in Chicago and moved to outlying towns, often in other states. Why? Its old multi-storied plantswere ineffi- cient; new mechanized devices reduced manpower needs; the refrigerated truck and modern highway put almost any location near enough tO big population centers, and often "almost any location" meant a small community with lower taxes and accommodating public and private officials. Altogether the changes meant the loss of 15,000 jobs in Chicago. At the same time, the banking and insurance industries, carrying on vastly more work in our growing, increasingly complex economy, generally have not decreased employment. In some instances they have increased it. But they are now hiring a different, more skilled employee whose productivity is much greater.

14 Our vocational schools and manpower training agencies, responsible forpre- paring employees for the new jobs, often have been hampered by obsolete curricula, inadequate equipment, and lack of far-sighted coordination.

Making the Recommendations On the basis of its findings, the Commission has formulated 22 recommendations, shown here in brief form (for complete text see page 99): 1. Extend the Commission for two years, 1967-69,so that its vitally important work can be completed for Illinois. 2. Fund the Commission at $171,500 for the biennium, enabling itto employ, for the first time, a professional staff in addition to contributed help. 3. Conduct regular and COntinuing surveys of technologicalprogress of all industry in Illinois. 4. Prepare a Governor's annual report assessing the impact of technological progress in Illinois. 5. Expand Illinois' activities under the Federally enacted State Technical Services Act of 1965 which is aimed at encouraging economic growth in thestates through more efficient application of new science and technology to business and industry. 6. Conduct a series of conferences to help establish Illinois State goals and policies in the fields of science and technology. 7. Enlarge the scope and flexibility of data collection and analyses of labor- and employment-related data concerning all areas of Illinois; distribute widely to business, government, communities, and labor organizations. 8. Make the Illinois Science Advisory Councila permanent body. 9. Appoint a scientist to serve as Science and Technology Adviser to the Gov- ernor. 10. Study the impact of industrial and technological changeon the functions and services of the Illinois State Employment Service. 11. Develop a coordinating cbuncil of manpower training, vocational training, and education agencies, including those at university and junior college levels. 12. Create a comprehensive plan, for application in educational facilities below college level, for training youth in the new occupations emerging from technological change. 13. Review technological trends in industry and agriculture anduse this information in planning new curricula for secondary and post-secondary vocational education. 14. Develop and increase contact (by State agencies) with industry for the purpose of carrying on cooperative relationships in educating and training manpower for new occupations.

15 15. Request U.S. Atomic EnergyCommission to prepare a manpowertable for the Weston Proton Accelerator Project.Develop programs in Illinoisschools and training agencies to prepare students to meetthe needs indicated by thistable. 16. Establish an advance-warning systemto give prior notice ofplant shutdowns and relocations. 17. Make counseling andtraining available to employees whohave been and are about to bedisplaced by technological change. 18. When voluntary measuresfail, provide displaced workerswith training and monetary assistance to help easethe shock of job displacement. 19. Establish State programs toassist communities whose ecOnomieshave been depressed by technological change. 20. In each State agency, prepare a report onthe effects of technological change on that agency's ownoperations. 21. Establish an executivedevelopment program, for State ofIllinois agencies, and tech- that would familiarize supervisorypersonnel with the nature of scientific nological progress. 22. Develop effectivecommunication to rapidly disseminateresearch findings, in science and technology, toIllinois industry, universities, and stateagencies.

NOTE: For the complete text ofthe Commission's 22Recommendations, see page 99.

4 I Illinois and Automation Mirror The Nation and Automation

Continuation of History

or . Beginning a New History

.A.utomationis changing Illinois. The question is, How much will Illinois change automation? How successfully can this great industrial-agricultural state make automation into a precisely controlled tool working for all its citizens? Note that the term used in the question is changenot limit or stop or ration. For automation, which is the most highly developed application of science and technology to industrial and agricultural production and business services,. holds great promise. for Illinois, one of the most advanced production areas on earth. Although automation presents great problems, it also holds great promise. Al- though it may displace some blue-. and white-collar workers from. their jobs and end the function of some firms, it can create more jobs and new types of jobs elsewhere and many new kinds of manufacturing and service industries here in Illinois. Although in 20 years automation may have remodeled the business and industrial landscape, rescheduled the workday, and categorized many of us into new kinds of employment classifications it also holds the promise of giving us the leisure we have always wanted and solving the primary human physical and social problems that have troubled our lives, our towns and our nations through history.

Neither Licensing Nor Killing Automation may change us. It will not ruin us. These changes, as we can foresee them, are not sufficient reason, as some have suggested, for declaring a moratorium on automation or censoring it or making it subject to Federal government license or committing what might be termed automacide or cybercidekilling the new force outright. In 1967 and the years immediately before us the prime job facing Illinois in the area of industry and labor is going to be how to make automation work best,

17 how to make automation most socially useful and mostefficient for highly indus- trialized, agriculturally rich Illinois. And if Illinois can solvethe automation problem with its complex of farms, industries, cities, and'its webs of communications and transportation networks, then the nation can aswell.

The Warning, The Action There is danger in automation, but only if we do nothingabout it. The clear recognition of this danger prompted Illinois in1965 to establish the State of Illinois Commission on Automation and TechnologicalProgress. This Commission was not the first 2overnmental bodyin the land to study the subject. Beginning in the 1950's, the United StatesSenate and House of Repre- sentatives have held extensive hearings on the relatedsubjects of automation, technological change, unemployment, manpower policy,economic development, and training. In 1963 California established a statutoryCommission on Manpower, Automation, and Technology. In the following year WestVirginia enacted a law aimed at "rectifying its situations of unemploymentand underemployment due to economic conditions, lack of skills...and other manpower problems caused by advancing technology." With the establishment of its Commission in1965 Illinois became the third state to pass automation-relatedlegislation. And in recent years other states such as Massachusetts,New York, and New Jersey have dealt withtechnological and manpower problems throughthe offices of their governors, although not by means of legislation.

The Only Commission of its Kind The Illinois Commission on Automation andTechnological Progress, however, is unique in being the only, functioninginterim state commission in the United States focusing its attention directly on the impactof science and technology. The job of the Commission is clearly statedin H.B. 1310 which directs the Commission to, "...study the economic and social effects ofautomation and technological changes in industry, commerce, farms,labor market and in society." This job, however, has not proved to be asimple one. The difficulties encountered are symptomatic Of theproblems experienced by the whole ofAmerican society in coping wtih automation and other phasesof technological progress. After initiating its work in December, 1965the Commission soon found that it was having difficultygetting information on Illinois' changing technology.It found a scarcity of suchdata in the State. Also, the Commissionfound that some leaders, in industry, labor, and governmentsimply are not aware of how technological change is shaping and redirectingnotalways pleasantlythe lives of the men, women, and children ofIllinois. Many of the Commission's efforts have been and mustbe concerned with assur- ing that these conditions are changed. And anyfuture Commission must work continuously on these problems.

18 ILLINOISTHE BUILDING AND GROWING STATE It is fitting that this unique body should be functioning in Illinois. As a giant of both industry and agriculture Illinois stands as a critical, supporting pier in the nation's economic structure. Illinois is the leading U. S. exporting state in shipments of both industrial and agricultural products. Depending on which tabulations are used, the state ranks either fourth in manufacturing, behind New York, Ohio, and California, Or abreast of Ohio andimme- diately after New York and Pennsylvania. The range of Illinois products is almost limitless. There is hardly anything that isn't made here in some quantity, butin a long list of items the state's output ranking, compared to other states, isparticularly impressive: Firstin machinery; fabricated metal products; electrical machinery. Secondin printing and publishing; instruments and related products. Thirdinfood products of all kinds. Fourthinchemicals and allied products; primary metal industries; glass, clay, and stone products; petroleum and coal products;furniture and fixtures; and miscellaneous manufactures including ordnance.

Under, Across, and In the Good Earth ( Illinois also is a major mineral producer, ranking fourth in cOal production and eighth in petroleum. And by now Illinois has become world renowned asthe place where the most trains and trucks and airliners, junction, stop,load, unload, re- charge, and speed off in new directions. Chicago's O'HareInternational Airport is the biggest and busiest commercial air terminal onearth, and in the Chicago rail switching district are more miles of tracks than in any of 38 states. Illinois'central location has been an important factor in the state's first rank as atransportation center; it also is responsible for making Chicago amajor junction point for telephone and telegraph communications. Chicago ranks secondin the U. S. as a financial center and insurance center. And although, at least for the present,Chicago no longer is a center of TV,radio, and theater entertainment its memorable contributions in this area range from Fibber McGee and Molly to DaveGarroway. Yet this same state that is a builder, a miner, a dispatcher of cargoesalso is a cattleman, orchardman, and good old fashioned dirt farmer.Illinois produces nearly every type of crop raised in the United States, except for someitems peculiar to the semi-tropical and arid areas of theSouthwest and Gulf regions. Eighty-five per cent of the state is in farms, andthe value of its farm buildings is exceeded only by Texas and California. Illinois is the second largest producer of crops, exceeded only by California which has nearly three times its land area. The State annually ranks first or second in corn production; first in soybeans; third in sweet corn; third in oats;third in total acreage of vegetables for processing; fourth in cheese production;and first in a variety of products such as Swiss cheese, horse-radish, and onion sets. Also,

19 the state is one of the nation's leading producers of wheat, apples, peaches, and tomatoes. There is more than plant life on the farms too. Illinois is the third biggest livestock producer, ranking after Iowa and California. In the production of hogs Illinois is second; in sales of all livestock, third; and in marketing grain-fed cattle, fourth.

Illinois Means Business, the Arts, Science Yet Illinois has not lived its centurY and a half as a state only for the mill, the marketplace, and the fruit and cattle of its prairies. This state isa center of learning and research, as evidenced by the University of Illinois, one of the oldest and foremost state universities in the nation; the University of Chicago, with its range of Nobel Prize winners and tradition of academic pioneering; and Northwestern University, noted for its leading schools of music, journalism, engineering, law, medicine, and dentistry. In short, Illinois, contrary to some popular views, is not justa place where the railroads cross nor the New York to L. A. flight lands to air the minks and moguls. Neither is it factory town nor that old neighborhood the mobran nor a folksy piece of the corn belt. Illinois means businessand learning and the arts and sciencesand most of all, as the creation and work of this Commission indicate, Illinois means the well- ordered good life. The state is known variously as "The Prairie State" and "Land of Lincoln," but with all of its natural and made wealth it could just as well assume New York's title, "The Empire State," or California's "The Golden State." No other state in the Union can claim to have produced the greatest volume of overseas experts, the biggest tonnage of steel, the first nuclear chain reaction, the most corn and soybeans, the world's busiest commercial airport, and TV's Kukla, Fran, and 011ie.

A MICROCOSM OF THE NATION Illinois represents the diversity of the entire nation, and like the nation as a whole this state has been going through a great period of technological change since the mid-1950's, and particularly since 1960. Illinois is a microcosm of the United States, and as such it is becoming increasingly populated with that dual personality known as a-,.tomation, immigrating to our time and place with its half handsome, half troublesome faces, its bags and basket of promises, problems, and wealth.

Fewer Hands, More Production The loss of a jobeven if it is only a temporary loss, which is referred to as job displacementis not easy for the individual to endure without questioning not only his own employment status or the industry that employed him but eventually the whole economic, sociA and political structure. And there has been

20 considerable job displacementand outrigfit job lossinIllinois and the nation during the past decade. From 1956 till 1962, 28,000 workers across the nationlost their jobs in the meat-packing industry while production rose three per cent.In Illinois alone 15,000 meat-packing workers lost their jobs duringthis period. Other industries with similarly heavy representation in Illinois also hadmajor job declines during this period. At one Chicago radio-manufacturing plantautomation and other technological advances now make it possible for two men toassemble 1,000 radios a day, a job that formerlyrequired 200 men. Nor are these changes limited to factories and cities. Modern agronomy and modern tools andchemicals, including the combine, chemical fertilizers and pesticides, tractors, and corn and cottonpickers have speeded farm work and often sent the farm worker into townpermanently. With present-day agricultural technology one man can growenough to feed 24 people. As recently as 1949 he could feed only 15.

Does Automation Cause Unemployment? Such specific instances as these combined with the generaland persistent unemployment that has been widespread in the U. S.since 1954 have caused many to believe that technological change, includingautomation, is a prime cause of men losing their jobs. Although unemployment hasdecreased in the past .two years, probably due in part to the economic stimulationof the Viet Nam War, there still are 700,000 fewerjobs in factory production and maintenance than atthe end of the Korean War 15 years ago. Yet not all industrialists, economists, andother investigators who have studied automation are agreed on how automation causesunemployment or whether it causes it at all.

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21 In 1961, stating his dissent from the major report on automation issued by the President's Advisory Committee on Labor-Management policy, Dr. Arthur F. Burns, president of the Bureau of Economic Research, said: "I know of no evidence to 'support the view...that technological advances are a ,Major, if not the major, cause of recent unemployment ...and I deplore anything that adds to the greatly exaggerated fears that many people have of what is loosety called automation." In another dissent from the same report, Henry Ford II, chairman of the board of directors, Ford Motor Company, stated that he disagreed with the majority view because: "Its major premise is the assumption that automation and technological advance are in and of themselves significant causes of unemploymentan assumption that neither history nor an analysis of current unemployment supports. ...The factual evidence strongly indicates that, while automation displaces some individuals from jobs they have held, its overall effect is to increase income and expand job opportunities. History teaches us that, by and large, workers displaced by technological advance have moved rapidly into other employment, ultimately to better paying jobs. If... wewould help persons displaced by technological advance, we must focus our attention not on relief or even trainingthough these properly conceived and administered, will helpbut on creating new jobs for people who seek them and can perform in them."

This is Only the Beginning Others, however, take the contrary view, contending that automation does indeed cause unemployment and that it is too early yet to see whatautomation is going to do, or could do, to us. One of these is W. H. Ferry, vice president of The Center for the. Study of Democratic Institutions and a member of the ad hoc committee that prepared a memorandum to President Lyndon B. Johnson, entitled "The Triple Revolution." This report was held by many, depending on their social and political views, to be either too revolutionary itself or a sorely needed landmark study of where America is headed. The report scans the U. S. today, finding three revolutions going on simultaneously, revolutionsin cybernation (meaning the combination of automated equipment and computers), weaponry, and human rights. It suggests that our present socio-economic approach to changing American business, industry, and society no longer will work; that automation is going to change our world and our lives with it; and that we must get used to the idea of men receiving an income even-if they do not "work" for it as we now conceive work. In a sequel to this report Mr. Ferry discusses aprime*,or the prime, cause for these changesthe progress and problems of automation or cybernationending with a warning: c`. ..We are only at the beginning of the cybernating process, yet the ability of cybernation to supplant men is already breathtaking.. We haven't seenanything yet. Only ,about one per cent of the machine-tool operations open tocybernation

22 have yet been cybernated. A respectedexecutive of a research anddevelopment corporation recently said that he 'shuddered tothink' of the convulsions insociety that will result from the work in progresshe daily observed in laboratoriesand research centers...."

THE MEANING OFAUTOMATION From viewing these statements it is clearthat there are today conflictingopinions about what automation is, where itis, and how it is going tochange us. To many, in 1967, it is not clear whetherautomation is the wolf at the door or ourrich uncle arriving with a portentousattache case or some sort ofwhite-coated technocrat riding up on a gleamingwhite machine (perhaps partcredit-charger) ready to change our vail of tears totechnicolor, lived effortlessly threedays a week and climaxed by $30 everyThursday (or $100 at today'sprices). But just as clearly there must be among thesediffering interpretations and thepictures they engender some middle ground whereit is possible to get a clear,precise picture of what automation is, andwhere it came from. Onlythen in Illinois and in thc nation can we plan its future use andcontrol for the good of all.

TheEnd of Manufacturing The term "automation" is not acontraction. It is an originalword and probably General was first used byD. S. Harder in 1936 whenhe was employed by the Motors Corporation. Mr. Harder wasusing the term then inconnection with automobile production, and hedefined automation as, "Theautomatic handling of parts between progressiveproduction processes." As a term, "automation" wasseldom used before 1954,and in those earlier days it referred to theconnection of machine tools toautomatic materials-transfer manufacturing items be- and handling equipmentfor producing itemsno longer Material cause the humanhand no longer took partin the making operation. blanks were fed into theautomated equipment, formed,milled, cut, held, guided from station to station, andfinished. Good items wereaccepted, defective ones rejected, and the completedproducts were even sent onto be automatically packed, labeled, and routed tothe customer according tohis predetermined inventory needs. necessarily included In the earliest days ofautomation, the computer was not natural part of the system in the system. goon, however,it was recognized as a and became an integralmember of the genusautomation. engineer who has written H. L. Goodman, a Britishele-ctrical and mechanical automation as: cogently about industrial managementand automation defines working in which the handlingmethods, the "...The technology of automatic material are integrated toutilize as fully processes, andthe desigri of the processed effort, in order as it iseconomically justifiable, themechanization of thought and self-regulating chain of processes."2 to achieve theautomatic and, in some cases, a

23 Mr. Goodman was writing 10years ago when applications of automation, es.pe- cially involving computers,were not nearly so widespread as they are today. Yet changes were coming. The call for thecomputer seems loud and clear in Mr. Goodman's references to "automatic" and "self-regulating"processes. Then he goes on to suggest that the call is becoming nota request but a demand: "The object of automation is to make the best possibleuse of available resources: man, material, money, and machine. The definition clearly showsthe need for the integration of handling, design, andprocessing, together with the application of automatic control, for otherwisean automatic or self-regulating system cannot be attained."

Turn Out the Light, Make the Product Now, the nature of automation beginsto take shape before us. Note that it involves "man, material,money, and machine," but that is not all, for the definition also uses the terms, "integration" and "automaticcontrol" and "self-regulating system." It is no longer a question ofa man taking a tool and a piece of material, stepping to a workbench and machine, turningon a light, and starting to hammer and cut to make a product. For we don't need theman (to do this job); we don't need his workbench or machine; we don't need the light. Allwe need is the material, the hammering and cutting operationsand the final product. The only things that are essentialnow are the process and the iiroduct. Men are still neededo produce products, but not in thesame way. Since human hands are not needed at each stage of manufacture, goods can be designed and produced differently. If you want to build an automated radioor television set you do not make elaborate equipment that will duplicate human handsand tediously assemble soldered, wired circuits (excellent though they are). Insteadyou design something that can be made in one, simple piece, preferably bya continuous, that is, non-mechanical process. Whatyou get is the printed circuit, quickly put together like, a piece of printer's artwork and etchedas a single sheet in a chemical bath. Similarly, if you want to build automated furnitureor chinaware or plumbing fixtures, you don't try to put them together with mechanicalcarpenters, potters, and founders. Rather, you design chairs, bowls, and bathtubsthat can be built by machines.

Automation is a Philosophy, a Unity In other words, for automationwe design products that can be built by machines, not machines that can duplicate various manualsteps to produce imitation hand-made products. This does notmean, though, that these products necessarily will be less attractive than the oneswe have been accustomed to. On the contrary, they can still be attractive andeven more functional than those we have used in the past. They may look, feel, and perform differently, andfor our future world there is no reason why they should not.

24 .

I Automation, then, is not just an electro-mechanical way to continue production as we have known it in the past. Since it combines, as L. Landon Goodman points out, "men, material, money, and machine," it is something more. D. S. Harder, that probable originator of the automation term, calledita "philosophy of manufacturing." L. Landon Goodman reports that it has been termed, "an attitude of mind and a production objective as much as it is a technology." And John Diebold, a consultant who has contributed to the development of automation during the past decade, has stated that automation is a way of, ". .thinking-is-much as it is a way of doing...." And he elaborates: "It is no longer necessary to think in terms of individual machines, or even in terms of groups of machines; instead, for the first time, it is practical to look at an entire production or information-handling process as an integrated system and not as a series of individual steps."3

The First 999,900 Years Were Slow Today, therefore, the producer of goods and services no longer can limit his vision to the four walls of the factory, the laboratory, the bank, office, or design studio. He simultaneously must be able to read and understand past mistakes and successes, current production, and future needs, and he must do this notonly in his present market or geographical area or type of production but often in all parts of the world and in other fields of manufacture or service. The many mergers of dissimilar firms and agglomerations of differing operations are one kind of evidence of this trend. Why is industry becoming broader, more inclusive? Why must the maker of goods and the source of services be concerned with so many more aspects of the market, the community, and life? The answer is twofold, and both phases are inter- related. They can be called the growth of science-technology and the increase of affluence. With the passage of history we have learned more and more about the world we live in. Man is learning about the world faster and faster just as he ischanging it faster and faster. Man has been on earth about 1 million years, but in the past century we have learned more about ourenvironment and how to control it than in the first 999,900 years. In every century since 1650 man has doubled his knowledge of the world. The rate of learning quickens, the new facts flick by. We knowthat .t- we have gained more technologicalknowledge m the past 50 years than in all past history. And now as we look about us we can seethat the vast majority of items in our material world have been invented within the lifetime of menliving today. As man knows more about the world he wants to enjoy and use itstill more. And as his learning increases he is able to have more of itsproducts. This is not just pointless curiosity and acquisitiveness. The more man knowsabout his world and universe the more he wants and needs to know. At the samctime, the more he understands the earth, the atmosphere, the chemicals,plant life, tissue and

25 .4

2. blood of life, and the space of the universe, the more he wants to help, to improve, to use, and enjoy creationand the more he is able to improve and enjoy through increased productivity. Automation, including computers, is our era's technological step toward those goals. The social advance that is the counterpart of automation's technological advance is the greater responsiveness of today's production and service industr:es to human capabilities and human needs. The problems threatened by automation are, first, the gap between improved production and men who cannot even take part in the production much less buy the products and, second, the gap between the general needs of all men tomorrow and the possibilities of automation tomorrow. Both gaps must be closed if our society is not to develop serious strains and break. Look Up to Higher Needs In times past when the design of a kettle or chair or cart did not change in 50 years or a century or even several centuries, the builder of goods did not need to be concerned with the range of man's life but only with the size of his stewpot or the breadth of his milch cow stancheons. What has changed since then is the breadth and depth of man's learning. As the physical scientist, natural scientist, and social scientist have told us more about_ourselves, and our world, they have heiped to lift our eyes from th'e sick 6ed, the kitchen, and cow pasture. As the politician and lawyer and artist have taught us more about our lives and our communities and their betterment they have shifted our immediate attention from ourselves. And so today we come to a time in history when we can begin to give more attention to human needs and human wants. A related historical sequence in the development of the United States has been traced by Dr.J.Douglas Brown, dean of the faculty of Princeton University, and a renowned economist. According to his outline the U. S. has passed through four great overlapping swings in the predominance of factors which pushed economic progress during the nation's history: "1. Land, from the earliest times, was the key to economic success for the individual and society. "2. Capital, with the industry revolution wl-fth developed in the North in the 1850's and much later in the South. "3. Invention, then Technology, and later Scientific Discovery became the critical factors as industry was more highly developed. "4. A fourth swing is already gaining momentum and develop;ng a new focus of interest and concern. This is emphasis on Human Resources and their effective organization. These will become critical elements in American development in coming decades." Wheeled Carts, Floating Galleys, The Model T The origins of automation, as a process, are not entirely clear. There are differences of opinion about its cause and beginnings just as there are about its effects. But even granting that it is a unique and original and unprecedented development,

I as some insist, it has to be seen as a partof the world that came before it and with it. Some trace automation to the earliest labor-saving devices,beginning with the wheeled carts of Babylonia, about 3,000 B. C., the swape orshadoof of Egypt that replaced the hand-held water bucket with abucket at the end of a long counterbalanced pole, and the Archimedes screw andChinese chain pumps, also for raising water. Such historical reasoning then tracesthe development to a later and differing aspect of doing work in which thegalleys of Venice were assembled by floating them down the canals of thatcity while Venetians in the bordering buildings handed out the equipment and gearfor outfitting the ships as they floated past. 'Picturing those Venetians preparing, organizing andpiling up that equipment and loading it aboard, itis interesting to see H. L. Goodman'slist of the four components of an automated system:mechanical handling, processing, sensina., and control. Walter Buckingham, member of the GeorgiaInstitute of Technology faculty and a student of automation, outlines four"fundamental principles" of automation and explains their historical development: 2*a 1. MechanizationThe use of machines todo work. This development resulted from the fusion of several concepts oftechnology. It was based on the principles of machinery, particularly standardizationof equipment and specialization of tasks. A prime example of this phase was thecontribution of a boy, Humphrey Potter, who had the job of standing beside arumbling steam engine, manually opening and closing the cylinder steam valve.After musing one day on what he wasdoing, young Potter fastenedthe cranking piston rod to the valvelever, making the opening-closing action automatic. He puthimself out of a job, but as some of today's automation experts say is the usual case,he got a better one. 2. Continuous Process---The secondtechnological revolution came in the early 20th century and was based on theprinciple of mass production which, in turn, was the implementationof a concept known as the continuousflow. This flow process was known in the18th century and was first used inAmerican flour mills for handling grain. Later this continuousflow theory was applied to automobile production by R. E. Olds, Henry Ford andEuropean manufacturers who at first sent teams of specializedworkers from car to car, doing the samework on each car. Then it wasdecided to bring the cars to the workersinstead, and the modern assembly line was born. To move the cars, Fordand the others adapted the conveyor belt, a device in useby the meat-packing industryin Chicago since as early as 1870. In 1923 the Morris Motor Companyof England introduced a furtheradvance in continuous flow called the automatictransfer machine. These machines, run from a central control panel, shunted partsfrom one piece of processing equipment to the next without theintervention of human hands. Althoughimpractical in the 20's because of its heavycapital expense relative to labor cost,the automatic transfer process was brought intoheavy use during World War II andis now a

27 familiar part of the factory scene. Its developmentcompleted the evolution of

I mass production technology. ! 3. Automatic Control or FeedbackIn this conceptof machine control, the machine's output regulates its input so that the outputmeets predetermined needs. A good example is the thermostaticallycontrolled furnace, but again, theprinciple is nothing new. Windmills in the 17th century wereequipped with feedback devices to keep the blades facing into thewind, and James Watt's steam engine, asearly as 1788, wasequipped with fiyball governors to control itsspeed. Today's feedback devices allow machines to perform such functions asstopping, starting, comparing, and measuring the dimensions and conditionsof their surroundings. 4. RationalismIt is the application of reason tothe solution of problems and the search for knowledge that ties theengineering aspects of automation toits economic, social, and managerial aspects. Rationalismbecame an important force in the world with the Renaissance as manchose to solve problems by reason instead of through authority, revelation, andsuperstition. The first impact of rationalism was on natural science where itchanged astrology to astronomyand alchemy to chemistry. The development and use of computerstoday is a kind of super-rationalism, aimed at transforming society into a more exactmechanism.

Logical or Profound Change The relationship of automated devicesand computers becomes more clear through this analysis. Man has been buildinghis technological machine toward the

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i goal of maximum efficiency and speed of production. The computer supplied the precise control to reach this end. In the purest sense, Automated Devices automatically perform sensing and motor tasks, replacing or improving on human capacities to perform these functions. Computers perform, at very high speed, routine logical and decision-making tasks, replacing or improving on human capacities to perform these functions. As indicated, many of the components of automation have existed for hundreds of years. Some automation specialists state that this automation is simply the logical consequence of preceding conditions, that it is novel only in the wayit has extracted its four components from all of man's stockpile ofdevices and theories for the purpose of using these components to produce goods and services automatically. Others do not completely agree with this analysis. One of these is DonaldN. Michael who states: "Both optimists and pessimists often claim that automation is simplythe latest stage in the evolution of technological means forremoving the burdens of work. The assertion is misleading. There is a very good possibility thatautomation is so different in degree as to be a profound difference in kind, and thatit will pose unique problems for society, challenging our basic values and the waysin which we express and enforce them."' MAKING IT WORK At times there is difficulty in seeing the problems caused by automationbecause these problems often stand so close to the advantages of automation.Yet this is an imperative distinction, and one thatIllinois leaders are going to have to make in the coming months and years. In Illinois and across the country, automation rockets production upwardwhile workers leave or shift to still un-automated jobs. ' At the Ford Motor Company's engine plant in Cleveland one man now operates a transfer machine performing500 functions. Before automation this operation took 35 to 70 men. At this same plant it now takes 48 men20 minutes to make - ..- ...: 1.1...... 1. 73 ...C.... 4 4. all engine mind.. J.,,Lure auI. _ ILIo aaon ittook 500 men mire nq long. In 1953, the peak year of steel industry employment,650,206 hourly and sal- aried workers produced 112 million tons of steel,compared to more than 130 million tons produced by 570,000 in 1966. The reason is nothard to find. Auto- mating phases of steel production has raised employeeproductivity an average of 4.9 per cent a year since 1961. What is the Stress at Floor 100? Nor are such increases in efficiency and decreasesin manpower limited to blue- collar jobs. Professional and managerial employees havefelt the competition of machines too. E. I. Du Pont de Nemours and Company, using a computer,solved a chemic\a\1 problem in 30 hours that would have taken one man 40hours a week for 20 years to solve. At the Institute for AdvancedStudies a computer works out weather

29 predictions that would take one man with an adding machine three centuries to compute. And using computers, architects and engineers designingthe tapering, glass-walled, 100-story John Hancock Center in Chicago solved complex mathematical problems of stress and loads that would have taken years to work out by previous methods. But the description of automation ingenuity can be endless: The Boeing Airplane Company and Sperry Phoenix Company have jointly developed a computerized automatic pilot that has landed a 98-passenger Pan American Airways jet with its controls untouched by human hands during the set-down. Banks now use a computer system which, in less than a tenth of a second, can add your paycheck to your balance, debit payments on your bills, credit your dealers, and post the results. What's more, some banks even have systems that will automatically talk to you when you phone the bank to ask what your balance is. Automated systems are dispensing cocktails in a London pub and pumping gas from coin-operated gas pumps. And computers are even being used to compose music and write TV dramas. In one notable area, medicine, automation has made relatively few contributions to date, but even there it is now possible to transmit apatient's electrocardiogram by telephone to a heart specialist in another city so that he can view it andsimul- taneously advise a physician at the patient's bedside what treatment to administer to the patient. Still, despite the advances in production and conveniencewhich areexpected and realized goals and the purposes of automationthe problemsremain, and

they cannot be tolerated. . It is not enough to say that while production has shot up 27 per centin the highly automated chemical industry, production jobs have slipped only asmall three per cent. This is still troublesome job displacement and perhaps unemployment. And the job drop in other industries often Ms been moreserious.

The Hardest Hit Auto industry employment fell from a peak of 746,000 in the 1955 boom year to 614,000 in 1962. Despite population growth and abigger national bread appe- tite bakery employment fell from 174,000 in 1954 to 163,000 in 1962. Coalmining employment declined 46 percent nationally from 1947 to 1954, and thehardships this has caused Illinois workers is by now a familiar story. In thesteel industry tod, another major source of jobs in Illinois, further job cuts areexpected. For the next decade they are estimated at 100,000 out of atotal national steel work force of 600,000. One of the most difficult aspects of the unemployment problemis the position of the Negro. According to Bennet Hymer, researchspecialist and economist for the Chicago Urban League who testified before the Commission,Negroes are at a special disadvantagewhen displaced from their jobs by automation because they lack the skills to get new and better jobs. Only 15 per centof the Negro

30 labor force is skilled, Hymer reported, while 40 per cent is semi-skilled and 45 per cent, unskilled.

The Need for Better Job Programs In its investigation the Commission noted, in particular, the need for job training, new types of training, and the coordination of educational and training programs. The chairman of the Commission, State Rep. Chester P. Majewski, criticized the lack of coordination between governmental agencies concerned with job programs, stating that although the programs may be worthy, there appeared to be too much overlapping. In addition, Commission Secretary Wiiliam Karp made several observations about the job problem in Illinois: 1. The Manpower Development and Training Act, which deals primarily with displaced workers, is failing to meet the needs of changing industries. 2. The vocational educational system is not keeping up with current needs. 3. Industry is not contributing enough to the retraining of workers displaced by automation. , 4. Government agencies are not doing enough to conduct research into new occupational fields. 5. The financing of job programs must be changed so that local authorities can be brought into closer contact with the programs. Better education and training are two of the major needs identified by the Com- mission so far as prerequisites to the future economic progress of Illinois. In addition, the Commission says, if Illinois is to continue moving ahead it must: Improve the awareness by industry, labor, and government concerning the impact of technological change. Improve the state's pace of absorbing scientific and technological innovation. The Commission, however, has observed some obstacles in stimulating Illinois' awareness of change and speeding its use of innovation.

Many Losses and a Victory The Commission believes that a basic problem in speeding the understanding of technological progress, in modernizing education and training, and in metabolizing changes is that: In Illinois information on changing technological events is inadequate. Not enough data are now available. Yet this information mustbe available or Illinois will not know where it is today orwhere it is going. Such introspection and self-knowledge are essential for this state in 1967. For although Illinois is a great industrial state, too little of the new industry in recent years has been coming to Illinois. Instead,this new industry, based on fundamental and applied research, incorporating electronics and other cybernetics applications, and often financed in part by Federal Government contracts, has polarized in Greater Boston, New York City, Colorado, Arizona, and California. After much concerted action and excellent planning Illinois was fortunate in having the village of Weston chosen in 1966 as the site for the Atomic Energy Commission 200-billion-electron-volt proton accelerator. Attaining this giant proj-

31 ect is a long step ahead in Illinois'efforts to keep abreast of technological change. Yet, it is only one step, and myriad technologicalchanges, including automation, are occupying and changing every areaof our lives every day.

Act Now, Live Better Later The time to act on automation is now, and theaction to take is to make of automation a precise and useful tool. Automation will not go away evenif we ignore it. Nor should we want to. We have prepared forit through history even though we did not realize where our ages of exploration,conquest, toil, wars, slavery, revolution, scholarship, and dreaming wereleading. We have longed for it even when we did not realize the ultimate form ourdesires for toilless work would take. We have produced the computers andautomatic machines. Now they are, in a real sense, waitingfor us to use them as they really can beused. If man were to leave this planet tomorrowit would not alter the automation problem (and it might be added, only a little wryly, thatthe computerized devices might even decide to get alongwithout us). Wherever our future takes us, whatever wechoose to do to enjoy the richest and fullest lives in Illinois and beyond, wehave developed automation and its computers, and we will learn how tolive with them. We will never, can never, be the same again. Automation presents uswith a great opportunity for creating a better and more human civilization for all thecitizens of Illinois. There is danger in automation, but only thedanger of doing nothing about it.

REFERENCES

1.Harvard Business Review, October,1964 2.Goodman, L. Landon, "Man and Automation,"Penguin Books, 1957 2.a Buckingham, Walter, "Automation: ItsImpact on Business and People," Yarper & Row, New York, N.Y.,1961 3.Diebold, John, Automation: Its Impact on Businessand Labor, National Planning Association, Planning Pamphlet No.106,Washington, D.C., May,1959 4.Michael, Donald N., CYBERNATION: The SilentConquest, Center for the Study of Democratic Institutions, SantaBarbara, Calif.,1962

A The Commission Investigates

Hearings on Meat Packing, Banking, Insurance, Vocational Education, and Manpower Training

House Bill 1310 gave the State of Illinois Commission onAutomation and Technological Progress broad power to "Study, investigate, analyze,and assess knowledge, problems, growth, effect, and future tendency ofautomation and other technological changes ..." In pursuance of these goals the Commission conducted avariety of studies, including hearings on the subjects of meat packing, banking,insurance, vocational education, and manpower training. The substance andsignificance of these hearings is discussed in the following three chapters. The text of these chapters incorporates abstractions of thewitnesses' statements correlated with the question-and-answer dialogue andother pertinent discussions at the hearings that constituted the totalproceedings of these meetings.

-I 1956-1966: Meat Packing Moves Out

FROM HOG BUTCHER TO HOST FOR A NIGHT

A Century of Meat Packing in Illinois frozen meat, were established in Chicago and other Midwestern areas. These large plants also Meat packing as a Chicago industry was at produced lard, soap, margarine, glue, and gela- its peak during the 1920s, but despite Carl tin. By the 1920's, Chicago packers were at Sandburg'sreferencetoChicagoas"hog their peak, slaughtering 21 per cent of the na- butcher for the world," it was never Chicago's tion's Federally inspected cattle and 19 per only industrial strength, nor was it Chicago's cent of the Federally inspected hogs. In con- or Illinois' inain industry. Although a great deal trast, by 1959 no national packer had a Chica- of publicity was given during the late 1950's go slaughter plant; Chicago's share of the na- to the closing of meat-packing_ plants and the tional market had declined to about four per movement of operations out of Chicago by cent in each category. major meat-packingfirms,thehog-butcher image of Chicago is not likely to completely Creeping Obsolescence disappear in our lifetime. The decline of meat packing in large U.S. citiesbegan when theirrailtransportation The Making and Fading of a Reputation advantages were neutralized by the refrigerated What really happened .to meat packing in motor truck and when advancing technology this country, particularly in Chicago and Illi- made their big, aging plants obsolete. Another .nois? Answers to this question were provided factor inrelocating was the combination of to the Commission by John E. Cullerton, Di- high wage rates in the cities and the ready rector of Labor for the State of Illinois. He availability of less costly labor in the small explained that the term "meat packing" came centers because of shrinking employment on from the early days of the industry, when farms. barreled meat and cured pork products were In some cities such'advantages urging relo- traded_by_New_England_colonists to the West -cation were offset at first by the sizeable capital Indies for molasses. As farmers moved west- investmentalreadymadeinmeat-packing ward and livestock production increased, pack- plants, but in Chicago the situation was dif- ing houses were established in several cities, ferent. A large number of Chicago's big pack- including Chicago, which became the biggest ing houses became obsolete in a relatively short packing center because it had the best railroad period of time during the 1950's. It was time connections. The railroads were vital not only to vacate them. because they moved the livestock and meat but It should be noted here too, that although because they brought labor and raw materials. packing declined in Chicago and other big From theCivil War throughtheearly centers, the decentralization has not drastically 1920's, large-volume integrated plants, process- altered regional patterns. The North Central ing all species of livestock, cured, canned, and states region, including Illinois, has retained

The accompanying chapter consists of abstractions of the testimony presented by the witnesses appearing before the Meat Packing Industry Hearings conducted July 14,1966, by the State of Illinois Commission on Automation and Technological Progress. The testimony was presented in the Hearing Room, General Offices of the Metropolitan Sanitary District of Greater Chicago, 100 E. Erie St., Chicago, Ill. 60611. NOTE: See Appendix for the list of witnesses. former its predominant position. Plants in this 12-state 1964, it was found that about 1,100 area processed 59 per cent of thenation's packing-house employees wereregistered with commercial meat output in the three-year pe- the Chicago Area EmploymentService Offices. dis- riod1960-62, compared to 60 per centin Since approximately 15,000 workers were 1947-49. Federal slaughter data show no major placed when major packingfirms closed their change in the area's share of national output Chicago plants, we can estimatethat consid- since the early 1920's. erably more than these 1,100 werestill without jobs. employment The Decline is in Workers We know that a number found inother industries;a significant percentage What has changed drastically is manpower draw Social Security benefits;and some are This employmentinmeat-packing,plants. on public assistancerolls.Likely, others of change results mainly from the introduction of the 14,000 left unemployed by theplant clos- technological improvements in newly-construct- ings are no longer in the workforce at all, ed, highly-mechanized facilities. Nationally, to, because of retirement age. tal employment in meat packing declined by approximately one-fifth in the 10-year period Meat Packing Today from 1956 to 1965. from 238,000 employees Today the new meat-packingplantsare to 189,000 employees. smaller and more specializedthan the old In Illinois alone, the drop was 45 per cent, plants. They may be locatedanywhere in the from 41,900 to 23,000. In the Chicago area, country, but most frequentlyarenear the during this 10-year period, it fell from 35300 source of livestock supply,mainly in the West- employees to15,200, a decrease of 57 per ern corn belt.These new plants, such as those cent. recently constructed in Momence,Illinois, Ro- Yet despite labor clits, the industry's annual chelle, Illinois, and Sterling,Illinois are highly meat output rose from 28 billionpounds in mechanized. In these plants a small groupof 1956 to 31.8 billion pounds in 1965. workers can do the same work itused to take Clearly output per manper hour in meat hundreds of workers to doandthey do it packing rose significantly in this period. in less time. Most of the plants specialize inthe slaugh- Helping the Laid-Off Workers tering of one or two species oflivestock. Very What happened to workers displacedby often, they sell their products directlyto super- shutdown of local plants? Only a small per- markets and multipleoutletfoodretailers centage of former meat-packingemployees rather than dealing throughindependent whole- were able to locate otherjobs at wages near salers. the the levels previously earned. Why? Meat-packing workers are also among Reemployment of these workers was diffi- highest paid in manufacturingestablishments. cult because of their relativelyadvanced age Collective bargaining agreementsbetween the include fol- and lack of education and skill.Some attempts unions and local firms of Illinois automation funds to were made at retraining,but a high percentage lowing provisions for: assist displaced workers for purposessuch as did not qualify. And even thosewho were re- of a trained often had difficulty findingjobs related retraining;ninety-day advance notice transfer rights to their training. plant shut-down; severance pay; In the Chicago area, there were noextensive to other plants; earlyretirement; moving al- employer-operated training projects, butwhen lowances; and technologicaladjustment pay. Employment the Manpower Developmentand Training Act Counseling and testing by the determine whether- em- of 1962 (MDTA) was passed bythe Congress, Service are available to possible, and funds were made available toretrain unemployment in other industries is ployed persons. Yet how couldMDTA, in if MDTA is undertaken,allowances are pro- Trends in 1964, help workers who had been laidoff in vided during t;ie training period. technological developments and theirimpact 1959? examined by the Illinois De- In a survey of applicantfiles,in March, are continuously

35 partment of Labor, to assure workers are being ways in meat packing, the new,streamlined trained today for jobs that will be available to operationof theChicago stockyardsarea them for several years. makes Chicago the foremost livestock distri- While all these measures cannot insure com- bution center in the world. The old Union pletely satisfactory transitions for all employees Stockyards section of this city has been con- affected by a shutdown, the odds in favor of densed into about half of what it was at its such satisfactory adjustment are much better peak of slaughtering activities. Chicago is no than 10 years ago. longer "hog butcher for the world," but it is . the staging area from which millions of animals Still Very Big in Meat Packing march to their places on the country's dinner At the same time Chicago has changed its tables.

MEAT PACKING UP, MIDWEST DOWN Illinois No Longer No. 1 Meanwhile, Expansion in Sausage and Poultry At the same time the two other much smaller "What is happening in the meat-products industries in the meat-products group, sausage and meat-packing industry is simply an ex- and other prepared meat products and poultry ample of what is happening technologically in and small-game dressing, have both increased many manufacturing industriesthroughout the in employment. The sausage and other-pre- country," according to Adolph 0. Berger, re- pared-meat-products industry rose from 44,000 gional director of the North Central Regional employees in 1958 to 50,000 in 1965. During Office of the Bureau of Labor Statistics, U.S. 1965-66, employment declinedslightly;the Department of Labor. overall increase since 1960 has amounted to Nationally, employment in components of more than 1,000 workers. the meat-productsindustry,including meat In the poultry and small-game dressing in- packing, reached a high point of approximately dustry, employment for 1958 to1965 has 331,000 in 1956, and declined persistently after climbed from about 60,000 to about 69,000, 1956 to approximately 308,000 in 1965. And most of this occurring during andprior to from April, 1965 to April, 1966 there also was 1962. a slight decline. All of thisdecline in the meat- All Midwestern states included in our reports product industry has occurred in the most im- except Ohio had net declines inmeat-products portant component of the group, namelythe industry employment during 1947-1965. The meat-packing industry. The Bureau of Labor decreases were six per cent in Iowa; 14 per Statistics national payroll employment data on cent in Nebraska; 52 per cent inKansas; and the meat-packing and other meat-products in- 53 per cent in Illinois. Only in Ohio did meat- dustry for the period 1958 forward show that products employment climb;, the increase was employment fell from 215,000 in1958 to four per cent. 189,000 in 1965, a decline of approximately Despite falling employment in these major 12 per cent. states, however, there was a national riseof In 1958, the meat-packing industry had in- about 12 per cent in meat-products employ- cluded 67 per cent of all workers engaged in ment. Other states had experiencedrelatively the meat-products industry group, but by 1965, large increases in meat-packing-industry em- it had declined to 61 per cent. During April, ployment, specifically during 1956 to 1963. 1965 to April, 1966, there was a furtherdecline With the exception of South Dakota and of more than three per cent. Utah, all states in the Northeast, North Cen-

36 ;'-'

i tral, and Western sections of the country had Midwestmeat-packingemploymentduring falling employment in the meat-packing indus- 1956-63, the proportion of the industry con- try during January, 1956 to January,1963. In centrated in the North Central states has de- the South, however, seven of the 13 included clined only from 59.8 per cent to 57.5 per cent. states had employment increases, rangingfrom At the same time, in some individual states the three per cent in Alabama to 45 per cent in relative decline was much larger. In Illinois, Mississippi. which in 1963 lost its rank as the first state in meat packing, the decline was from 12 per cent What Happened in Illinois? of the national total to approximately 7.2 per In spite of the relatively large decline in cent.

FINDING THE BENEFITS IN PROGRESS Can Workers Share in the Advances they HelpProduce? railroad installations. The trucks also madeit possible to locate plants in the countryside with In the 1920's Chicago accounted for about immediate access to livestock supply, and to 20 per cent of the nation's employment in meat save money on animal transportby shipping packing. By 1939, Chicago's share was down the lighter, more compact carcass meatrather to 15 per cent, and currently it is less thanfive than live animals. per cent. In -addition to the trucks, other causes for Such statistics as these must be the starting the shift of meat packing out of the large point for any review of the changing Chicago cities have been various state policies such as: and Illinois meat-packing industry, in the opin- concessions on financing plants and writing ion of James Wishart and Glenn Snyder of tax free bonds; liberation from community tax the Amalgamated Meat Cutters andButcher responsibilities; and the providing of services Workmen of North America, AFL-CIO. Mr. and accommodations to attract plants. Allof Wishart is research director of the Union, and these have added a certain additional synthetic Mr. Snyder, a 30-year veteran of the industry, economic energy to the basic economic pres- is in the Union's Meat Packing Department. sures that have pushed andpulled meat packers The employment decline was from roughly to .the outlying areas. -30,000__workers_in_1929,_ta_2_8_,0_00 in 1939, But the meat-packing declineinthe big and to roughly 11,000 in 1963. Thesefigures cities indicates something else too. It reflects represent basic meat packing,thatis,the also the tendency of the industry to do its slaughtering plants, the processing plants, and buying more and more on the basis of direct also the poultry industry. Today in theChicago negotiation with farmers or through county area there are roughlythree workers employed auctions. In 1963 only about 36 per cent of in processing for every one employed in basic the cattle were siphoned through terminal mar- slaughtering. Processing includes the produc- kets to major producers, compared to 70 per tion of such items as sausage, corned beef, and cent only a few years before. prepared meats. No Cause for Relocation Trucks, Taxes, and Faceto-Face Buying Yet the corn belt, including Illinois, con- As previous witnesses have indicated, the tinues to be, and I think is increasing tobe, basic reason for the change in the meat-packing the primary sector for the slaughtering oflive- industry has been the refrigerated motor truck. stock in the United States. The construction These big highway refrigerators freed the in- of new plants across Illinois by Swift,Oscar dustry from dependence on rail yards, termi- Mayer, Armour, and Agar shows this. nals, and other costly, large-scale permanent Illinois employment in the meat industry

37 nowisapproximately20,000(mid-1966). vested for any worker separated after 10 years There may be some increase in that, though of service, even though he may have received probablynothing sensationalsincethein- separation pay. At 65, he collects the pension creased number of plants is being offset con- he is entitled to by his actual years with the stantly by the higher rate of man-hour pro- company. ductivity. Also, according to this contract, Armour is According to Messrs. Wishart and Snyder required to,give 90 days' advance notice before itis not true that wage rate differentials were closing a plant or a major department of a any significant factor in the geographical relo- plant, and all workers on the payroll at that cation of the meat-packing industry. The two time are, in a sense, guaranteed steady work unions in the industry, the Meat Cutters and for the 90 days. If they are laid off at the end of the Packing House Workers, have established 60 days, Armour-then has to pay the employees forallnational packers a uniform national for the remaining 30 days. This is the kind of rate structure, so that wages paid by a firm in agreement that is easier to negotiate with a one city are the same as in another. In terms major multi-plant corporation than a single- of the policy of national packers, then, there plant company simply because a small firm is no basis for saying that differences in wage going out of business usually does not have or contract benefits caused relocation. very much in the treasury. The possibility of establishing a displaced- Seniority and Benefits Go Along workers' fund with contributions from all members of an association represents a real prospect The Meat Cutters' Union agreements and for future development. those worked out through the Automation Fund Committee helped considerably in the Sioux City lay-offs. At the time of the closing Armour Automation Fund Surveys of the Sioux City plant and shortly thereafter, The impetus for the Armour Automation Armour opened new plants in West Point, Fund came from the closing of six major plants Neb., Worthington, Minn., Emporia, Kans., by Armour and Co. early in 1959. Almost and in SteRing, Ill. More than 20 per cent of 7,000 employees with an average service of the displaced Sioux City workers transferred about 20 years were displaced with 30 days' to these plants, retaining their seniority rights notice. This catastrophic event developed a and full benefits. good deal of pressure among the workers. In addition to the interplant transfer provi- The proposal for the formation of the Ar- sion in the Meat Cutters' master agreements, mour Automation Fund Committee came in the Union also negotiated a number of other an effort by the Company to meet these pres- benefits on the basis of studies and investiga- sures and to provide some_help,ior_the_thou- tions and surveys by the Armour Automation sands of unemployed. Comm ittee : Improved severance pay. Special pension benefit under which work- Hardest for Women, Older Workers, Non-Whites ers, older than 55, with 20 years' service, who One of the Armour Automation Fund Com- are laid off by plant or department closing, re- mittee's first jobs was to survey the men and ceive a pension at 50 per cent above the normal women who had been laid off in the early pension rate then in effect, up to age 65, at part of 1959 from three Armour plants, in- which age Social Security goes into effect. cluding one in East St. Louis, Ill. Vesting provision, making pensions fully The East St. Louis survey results showed

NOTE: Management has resisted proposals for advance notice of plant closings. One of management's claims has been that if the workers know the plant is going to close there will be sudden collapse of morale. Studies done by Dr. Arnold Weber for the Automation Com- mittee indicate that it is not true. On the contrary,it appears that when the three-month notice goes up there is a tendency for efficiency to increase for this period.

38 that 13 months after the plant closed, 57 per some disagreement among the three sectors of cent of the workers had found no new employ- the Automation Fund Committee, union, comment. The results indicated that the heaviest pany, and the public members. There were, ( concentration of unemployment was among however, some points of consensus: older workers, women, and non-white workers. 1. When labor and management are unable The surveys also showed a fairly low level of to solve a problem, government must take formal education; an average wage for new the initiative. jobs of $1.86 an hour compared to more than $2.20 at Armour; and, for practical purposes, 2. To prevent automation from causilig great totally ineffective functioning of the employ- suffering there must be growth in goods and ment services. No more than 13 per cent of services produced. those who found new jobs had had any form 3. The employment services need revitaliza- of practical assistance from the employment tion. agencies. Also, there were suggestions made by the Retraining Helps Only a Few Armour Automation Fund Committee for gov- The Committee concluded from its studies ernment taking initiative in the area of retrain- and surveys that retraining is effective for a ing, which later were embodied in law with fairly small percentage of workers. It will in- certain modifications. crease somewhat their power to competewith other unemployed workers in the labor market. The Unadvertised Costs of Automation But the researchers questioned whether retrain- The conclusion of the labor members of the ing by itself, even for skilled workers, creates Committeewasthatalthoughautomation new jobs where none existed before.More and brings certain social rewards, it also has unad- (i more in our changing economy the needfor vertised costs in human suffering and human employees is concentrated in such highly-skilled dislocation and community loss that go far occupations as computer programmer, mathe- beyond any imagined by professors of econom- matician, aud other new jobs. ics or executives of major corporations.

A Mythical Demand for Skill What Programs Really Help Displaced Workers? The Automation Committee discovered also The interplant transfer system has been suc- that the anticipated increase in demand for cessful only in the case of workers displaced skill in the packing-house industry as automa- at one or two plants. For example, following tion progresses was mythical and unreal. In- the closing of one plant in Chicago by a major stead-,--the-impact_of_automation_was toiedjice company, transfers to anotherChicago-plant----- skill requirements on jobs, to make those jobs were offered to the workers. The morepopular simpler and more easily learned than they had choice there, however, was to take severance been before. pay instead of a transfer, eventhough the True, where automated and other mecha- long-range outlook for the worker accepting nized equipment was introduced, there was an severance pay at an age of forty-five or more increase in the demand for such skilled occu- and leaving the firm obviously was less fa- pations as electronics repairmen, but this rep- vorable than for the worker transferring to resented only a small fraction of a per cent another job with the same company in roughly of the- total labor force. the same area. One conclusion is that after a good number of years in the packing house, Conclusions on the Effects of Automation workers look with relief toward some other Automation, at least as indicated by its im- form of employment. Also, people want to pact on the packing-house industry, has the stayintheir old neighborhoods with their effect of reducing the total demand for human friends, close to familiar associations. skill and experience in the production process. Workers who don't want to transfer may In reaching its general conclusions there was seek help from an employment service, as noted

39 previously. And despite their sometimes less substantial losses. Profits in the meat-packing than perfect performance, these services have industry tend to follow cyclical patterns. When been genuinely helpful in specific instances. In livestock supplies are short and prices are up, Ft. Worth and in Sioux City the employment the packers claim that they operate at a loss. services set up special task forces to find jobs In periods of surplus livestock, when the prices for the displaced Armour employees, and their paid by the packers for animals go down, the performance showed improvement. But the em- packers cover the costs and add to profits. The ployment services are still hampered by em- rate of profit return on net worth in the indus- ployers' failure to notify the services of their try is about eight to nine per cent, hardly a needs. bonanza in American business currently with its average current profit return of about 10 What is the Aptitude of Aptitude Tests? per cent. As for retraining, the Automation Commit- Giant Packers vs. Behemoth Food Chains tee did not find any sharp correlation between The basic problem of the meat-packing in- age and learning ability. The Committee did dustry is exemplified by the lesser position in find that aptitude tests do not necessarily indi- the total scale of U. S. industry occupied now cate an individual's ability. In Oklahoma City, by the big four packers. Big as they are, they where workers at first were deprived of retrain- no longer have the decisiveeconomic powcr ing if they failed to make a good score on the they possessed in the early part of the 20th employment service's aptitude tests, the Com- Century. And they are now contending with mittee later changed its Approach and said, even larger economic forces than they them- "Come one, come all. Whether you pass the selyes possess, the major food chains. aptitude tests with flying colors or flunk you can have the retraining." Unemployment Isn't Being Eaten Away When the bars -were let down in this way, the But the basic problem in terms of unemploy- job results were just as good as when em- ment is that the increase in demand for meat ployees were placed according to the tests. is fairly limited, only slightly greater than the Age does appear to be a significant factor in increase in population. The consumption of reemployment. The resistance of employees to meat per capita is currently about 160 pounds the 45-year-old displaced workerisconskl- a year. The most rapid per capitaincrease has erable. The only exception to this point is the been in the consumption of poultry; pork and worker with special craft skills. The Commit- r lamb have slacked off. tee found that the maintenance people, the With productivity advancing as it has, at a electricians, the millwrights from closed plants rate of about five per cent a year, and con- located employment very readily without re- sumption increasing at a rate of less than two gad- to age per cent, it is inevitable thatindustry employment will fall. Currently about 5,000jobs a Yes, We Have No Bonanzas year are eliminated from the industry.(Con- A panoramic view of the meat-packing in- cerning Mr. Adolph O. Berger's statement in dustry today would show a rather dismal land- the second section, "Meat Packing Up, Mid- scape of declining employment and a growing west Down," that Southern meat-packing em- economic squeezecaused by pressures on one ployment isup,thisisan increasein the hand from the ci.torners, such as the major Southern poultry industry. There actually has food chains, and pressures on the other hand been a slight decline in the total sector of the caused by the uncertainties and vagaries af- non-poultry U. S. meat-packing industry rep- fecting price structure nnd the livestock busi- resented by the South.) ness. In terms of profits, Armour, Swift, and Wil- Possibilities for Legislation son are among the more profitable producers The proposal for increasing unemployment in the industry, but small firms with full-line compensation should be underlined. From the plant, such as Rath and Cudahy, have had Union's point of view, more constructive Fed-

i eral standards are needed. The Meat Cutters in gross national products; or government in- recognize that thereis a certain competition ter-assistanceinsubsidizingprojectswhich among the 48 states of the Continental United would give direct employment to the unem- States in securing new plants, in bringing new ployed;thenegative income tax principle, employers into the state. For this reason,it which Professor Friedman of the University seems that the Federal approach is needed to of Chicago has suggested as one means of pro- expedite the solution of these problems. viding income for those who have lost income Also, wage-hour legislation could provide a through technological change (the worker re- very effective minimum floor, and by establish- ceiving less than a certain annual income for ing a uniform coverage for all employers, could his work would receive, from the government, createmorefavorableconditionsforthe a positive number of dollars to bring him up Union's employment and wage objectives. Such to, say, a poverty level). legislation could have very great, long-range potential value. Rewarded With a Pay Cut Union policy recognizes technological prog- Where There's a Need There's a Way ress cannot be opposed. But we don't propose Government has a responsibility tofillin that the man on the job should suffer a cut in where private industry fails to provide employ- his wages as a reward for the technological ment. Perhaps that help may come in the form progress to which he himself, as a worker, of encouragement for a more rapid increase often has contributed.

A CHOICE OF LIVELIHOOD AND CORPORATE ECONOMICS i The Union isn't Negative but Concerned on the importance of labor costs in this shift to decentralization,but the union contends A labor union, Mr. Kerry Nauk told the that the major packers would have found it Commission, is more concerned with employ- infeasible to maintain existing centralized opment than with sales and profit. Mr. Napuk is erations even if urban workers had been willing research director of the United Packing House, to accept sizeable wage cuts. Food & Allied Workers of America, AFL-CIO. This concern is only natural, for its members Progress Brings the Wiener Stuffer are jobholders; and they cease to be either The assembly line method of production, when-a-plant-closesThe-un ion's-policy-toward- originally introduced in the early 1900's, un- technological change is not a negative one, but derwent far-reaching change through the years. one of concern for the future of the workers. The conventional on-the-bed system, where the Change in meat packing has come from carcass is processed by groups of men moving general technological developments, such as from one animal to another, was a significant refrigeration systems, trucks, and highways, improvement. But, the on-the-rail dressing sys- and from internal developments within the tem, which moved the carcass along a line meat-packing industry, such as new production while the men remained stationary, was a much methods and machines. But itis notable that more important refinement.Inmany cases, the labor cost also played a minor role in the Can-Pak system doubled the number of heads change that shifted the packing industrY from slaughtered in an hour, while often reducing the city to the countryside. the gang lineup by a third. Today the wage cost of producing a pound Mechanical equipment also boosted produc- of meat is a little more than three cents. Com- tion. Power tools, such as the Wizzard Electric pared to the wholesale cost of a pound of meat Knife and electric sawing devices, increased this labor cost is a small factor. There is some productivity in skinning, dressing, and trim- disagreement between union and management ming livestock. The mechanical ham pumper

i Chicago. Five local Sausage and lun- union, lost their jobs in made ham curing efficient. 741 workers outof cheon meat are now massproduced by ma- plants closed, throwing and mix the jobs. chines that measure, grind, blend, displacements that occurred ingredients; other machines stuff,seal, or link Yet the major resulted from layoffs thatstarted as temporary sausage and package it. Five firms, including Wiener production jumpedconsiderably with but became permanent. Frank-O-Matic system Wilson and Co., Swiftand Co., and Armour the introduction of the 11,722 men and women which mixes ingredients, stuffscasings, skins and Co., displaced and labels the during this period. the casings, and then packs company, Ar- final product. It is not uncommon nowto find Between 1956 and 1964, one than 16 plants thatformerly 12 employees doing thework formerly done mour, closed more people. by 175 people. had employed 12,951 significant changes L;ven today, theseclosings continue. Since In short, there have been has had notice of in almost all operationsassociated with the January, 1966 the union slicing, wrapping and packagingof three plants closing, twoin Denver, Colo, and cutting, involved 400 workers meat products, not tomention the improve- in Evansville, Ind., that recently it received notice ments in materials handlingwith the utilization in each plant. Just Hygrade Food Products of tractors and conveyor systems. of the closing of the plant in Indianapolis,Ind. which employs more than 2,000 workers. Decline and Fall and Increase The effects of thesedevelopments are best expressed in a few simple butstartling national The Only Concrete Studyof Automation statistics: Displacees First, between 1956, the yearthese major As noted previously,production employment closings began, and1965, production worker fell by 22.3 per centbetween 1956 and 1965, employmentplunged by 22.3 per cent, from leaving 41,800 men and womenwithout jobs. 187,600 to145,800 workers. Second, man- Also, as noted, 12,993workers were displaced hours fell from 418.5 million,in 1956, to 311.6 in Chicago alone. million in 1965, a decline of25.6 per cent. What happened-to thesepeople? This subject Third, output per man perhour jumped from has been discussedearlier, but the studies con- 63.7 pounds per man per hourin 1956 to 98.3 ducted under theArmour Automation Fund pounds in 1965, an increaseof 34.6 pounds agreement in 1959 maythrow some light on it. per man. Fourth,the productivity index since This was a fund of half amillion dollars 1956 shows an amazingincrease of 54.3 per set up after theclose-downs. It has provided cent, with an 8.9-per centboost in 1965 alone. the only concrete studiesof what has happened Fifth, direct wage cost per poundof meat con- to workersdisplaced by technologicalchange. tinued its downward trend,falling to 3.12 cents With the displacement of over50000 workers per pound in 1965.This was 4.6 per cent below in six different plantsduring 1959, it was dis- the 1956 level. covered that the workersin half the plants In other words, morethan a fifthfewer under investigation were,for the most part, workers were producingabout a fifthmore (a) older than 45, (b)unemployed for periods meat, with each workerturning out 54.3 per ranging from four months tosix months, one cent more meat perhour at four per cent lower year after theclosing, and (c) wereplagued wage cost per,pound of meat. There are very by a lack of skills and alow level of education. few other industries that canmatch this degree These factors madetheir reemployment quite of advance in such ashort peeiod of time difficult. Further, the period1956 through 1961 (1956-1965). was a time of veryhigh general levels of unemployment, and this compoundedthe prob- . lem, especially forunskilled workers. Retrain-. Closing the Plants helpful, a) if there is a high Between 1952 and 1964,12,993 packing ing can be most employment level and, b) ifthe workers are house workers, who weremembers of the

42 i young and have had a certain degree of edu- efficient plants are specializing in certain spe- cation already. cific functions or operations in themeat-packing process. Not Enough Had Aptitude Iowa Beef, for instance, is a largeindepen- In theory a displaced meat-packing worker dent company in Iowa that doesnothing but of sufficient aptitude could be retrained for slaughter cattle and ship carcasses forother many skilled specialties such as general ma- companies. Some hog companies aredoing chineoperator, heavy equipment operator, nothing but slaughtering for other processors practical nurse, barber, clothing presser, or who once did the slaughteringthemselves. In auto repairman. Not enough of the meat-pack- short, there is movement and changeof many ing unemployed, however, had aptitude for kinds in meat packing today. such work. Placement levels ran at only about 80 per Let the Federal Government Dothe Hiring cent. Greater achievements were made in the The bitter experience in meatpacking, states transfer program, but most workers displayed Mr. Napuk, illustrates the moreruinous aspects a great reluctance to move fromfamily and of technological change, andthis experience friends. vividly demonstrates the tollin human re- What, then, happened to these thousands of sources. It is both a sadand tragic picture. Yet, workers? what is most tragic of allis that it need not have been so. Says Mr. Napuk: Out of Meat Packing ... andDown "If the companies involved had notequated The vast majority left meat 'packing. After progress with profits,there would not have hardship, they a period of severe economic been as much hardship. usually found a job, but, more often than not, "If the Federal governmenttheonly public at less pay. Some of the fund studiesindicated institution in the position to introduce a pro- old jobs of a differential between the new and gram for an industry as awholehad accepted 50 cents an hour or roughly $1,000 a year. responsibility for the welfare of thesepeople, Severance pay offered temporary help but the burden would have beenlessened. But the could hardly make up for the loss of income Federal government could not acceptthis reproduced by working at a lower-paying job sponsibility with existing laws. for the rest of the worker's laboring life. The Federal governmentshould very serious- The fact that a severance pay plan was nego- ly consider the proposition ofbecoming the tiated prior to the mass closings indicates Mat employer of last resort, in the sensethat if a the union had some advance indications of the worker is displaced then theFederal govern- shutdowns. But there has not been much dis- ment accepts theresponsibility of hiring that cussion of collective bargaining agreements to man as an employee. ..." handle future difficulties that might arise. Some feel that as long as there are multi- story meat-packing plants, a type now consid- Suffering is Not Progress ered obsolete, there are going to be further As meat-packing unemploymentmounted it close-downs. There are a number of large became apparent that 'theproblem was too plants of this type now employing about 3,000 big for just the parties directlyinvolved. Com- workers in each plant. pany and union couldsoften the blow, but Sonie major firmsthe two largest com- only temporarily. The uniondid negotiate a panies in the industryare diversifying. One severance payprovision in the contract, pro- has more than half its assets out of meat pack- viding each worker with twoweeks' pay per ing altogether. At the same time, while these year of seniority, anditdid arrange for a to meat packers are diversifying, they are building transfer program with the cost of the move full-line processing and slaughtering operations, be borne by the company. which again, are multi-story structures. But Mr. Napuk stated that hisunion has a re- other companies are building one-story, effi- sponsibility to negotiate with the companyto cient, modern operations. Some of these new cushion any blow that results fromdisplace-

43 ment in terms of separation pay, transfer ar- cal change. In any event, failure to consider rangements, and pensions. the worker is hardly any form of progress. Mr. Napuk adds: "Yet, in the final analysis, it comes back to "Cooperation between company, union, and this matter of values. What is worth more to government can ameliorate the hardships that the American society, a worker's livelihood workers suffer in a period of rapid technologi- and his family's welfare, or corporate profits?"

HELP FOR THE DISPLACED VIPRKER Is There Aid, Is It Accepted? conducting studies, engaging in placement cam- paigns, and any other steps deemed helpful. Problems of displacement in the meat-pack- As of the time of the meat-packing hearings ing industry can be described as severe, com- in mid-July, 1966, the fund had been involved pared to labor adjustment generally, in the in fourrelativelymajor projects,butstill view of Dr. Arnold Weber. amounted to about $140,000. The Chairman Dr. Weber, who is professor of industrial of the fund is Clark Kerr, former president relations at the Graduate School of Business, of the University of California, and the co- University of Chicago, discussed some of the chairman is George Schultz, dean of the Grad- steps taken to ease the effects of this severity. uate School of Business, University of Chicago. For about six years he and others have been The fund was set up in anticipation of pos- intimately associated with the projects and op- sible work interruptions and in realization that erations of the automation group to which Mr. when the previous shutdowns had taken place Kerry Napuk alluded in his testimony (pre- in Chicago, East St. Louis, Columbus, Ohio, ceding section). This is the Automation Fund and in North Dakota, union and management Committee established by Armour and Co. in had been without apparatus and money to deal conjunction with the United Packing House, with unemployment on a special project basis. Food & Allied Workers of America, AFL-CIO, It was a non-governmental ageement, arranged and the Amalgamated Meat Cutters and Butch- jointly by the unions and the management. er Workmen of North America, AFL-CIO. He and others carried out various research A Tale of Four Cities projects for the Committee and administered Dr. Weber's experience with the Automation retraining and placement programs fordis- Fund covered four cities where Armour em- plact.d workers of Armour and Co. in Ft. ployees experienced major shutdowns, Okla- Worth, Tex. and Sioux City, Iowa. In this ca- honr. City, Okla., Ft. Worth, Tex., Sioux City, pacity, Dr: Weber explained, he had become Iowa, and Kansas City, Kans. anexpert,"onabandonedmeat-packing The average age of the worker in the four plants!" cities was about 48, and the average educational level, eighth grade. There was a high One Penny for Retraining Etc. component of members of minority groups, The Automation Fund Committee was es- including Negroes and Latin-Americansin tablished as a result of a collective bargaining Fort Worth; American Indians in Sioux City; agreement between the Amalgamated Meat and Negroes in Kansas City. Cutters and Butcher Workmen and the United Most meat-packing workers have had a long Packing House Workers and the Armour com- attachment to the industry. The average em- pany. The contract was negotiated in1960; its ployment term is 14 years, but for many it terms were that Armour agreed to put one totals more than 20. As noted already, dis- penny per hundred weight of livestock killinto pla( ement forced them into an open labor a fund, up to a maximum of$500,000. This market that for many was hostile and unknown fund was to be used for financing retraining, territory. Yet this is a message of hope rather

I than despair in the'r experience. The progres- In Sioux City, there were ultimately 156 sive activities of the Automation Fund Com- trainees and 126 eventually finished. As of mittee do not indicate that you can undo the early1965, the unemployment rateof the disturbance and inconvenience done to the retrainees was 10 per cent, but this in part lives of the displaced workers in any broad reflected the narrow limits of the Sioux City sense of equity. But theCommittee did find labor market. that there are policies and administrative de- These aggregate figures, showing the per- vices open to the private parties and to govern- centage of workers helped ranging from 14 mental agencies that can ameliorate the condi- to 60 per cent, may be no reason for rejoicing, tion of the displaced worker. Progress made but at least there is some basis for the feeling in dealing with some of these problems is that by applying resources and planning the shown by the following figures: displaced worker can be helped. The first project initiated by this joint union- management Fund wasin Oklahoma City. There, about 14 per cent of the total 450 dis- Flop in Ft. Worth, Bird in the Hand placed workers were helped by variousre- The importance of alittleadministrative medial programs such as retraining for place- imagination combined with the willingness of ment in new jobs and efforts attranstring to the parties to experiment is shown by AiTiticuris other plants. The Oklahoma City program was experience with the interplant transfer plan. the least successful; but it was the least suc- This plan, negotiated by the union manage- cessful because it was the most experimental. ment, specifies that workers displacedfrom a The Ft. Worth 'shutdown in 1962 involved plant because of a shutdown have a right to 1,200 workers. Thirty-six per cent eventually bid into jobs in other plants, as of a given were helped to find jobs throughthe Com- seniority date. The worker can't displace some- mittee's representative in Ft. Worth, and some body who was on the job before that date, so, of them were able to transfer to other plants, in effect, the displaced employee is exercising although this number was negligible. the right to bid in jobs that were held by people The next shutdown, in Sioux City, Iowa, in who were employed subsequent to that date. 1964, also involved 1,200 people, and there The first major attempt to apply this transfer the Automation Committee helped 60 per cent plan was in Ft. Worth. Of about 1,000 workers make adjustments. who were eligible only two transferred. Cer- It should be understood that these figures tainly this seemed to be a magnificent flop. don't indicate that all these wbrkers are living Many factors, to be sure, wefe involved 'in this in clover; that they are all at the same economic failure as shown by the following observations: level as before their lay-offs. But the figures The positions that were available were in do show that they entered training programs or Northern cities, and many of the Texans were found jobs through the efforts of the Commit- reluctant to move. Also, the accumulated se-, tee, or the collaborative efforts of thePublic niority base that the employees had in their Employment Service, or that they transferred positions at the new plant was amenable at to other plants under the provisionof an inter- that time, and they were concerned that they plant transfer agreement negotiatedinthe might be bumped out if there was a cutback early '60's. there too. But the most important finding was In Ft. Worth, 165 people eventually entered that the employees were unwilling to transfer training, and 150 finished, indicating a dropout because they were uncertain about the nature rate of only little more than 10 per cent,which of the jobs:in the new plant. And if theworker is only about half the dropout rate for MDTA accepted a transfer, he forfeited his severance programs. For those who finishedtraining, the pay which,inFt. Worth, averaged around unemployment rate three months to a year $2,800 because of the high seniority level there. after their training was around five per cent, There was, thus, a bird-in-the-hand notion that compared to a rate of 28 per cent for displaced kept people from pursuing the bird in thebush workers of similar age, race, sex, etc., who in other cities. hadn't taken the retraining. In Sioux City an experimental change was ,

45 o

Thing made in the program. When a persontrans- Education is Not an Easy 4 important and ferred to a new plant, he hadarsix-months' trial The second factor that is very period, during which he coulddecide to stay within the province of the stategovernments or go back to hisoriginal lay-off status, and is the need for adequatevocational education he could do this withoutjeopardizing his claim facilities. good vocational edu- to severance pay. Ft. Worth, Tex. had segregated, and A total of 400 initially appliedfor transfer cation facilities, but they were in Sioux City and of this group,240 did the Negroes couldn't usethem. This under- the program at that transfer and stayed at their newjobs. A follow- mined the effectiveness of segregation, up study indicatedthat,..their adjustment was time. In Sioux City, there was no relatively easy. And this muchhigher propor- but there were nofacilities. The local people, in turn, for the who were very conservativein a political sense, tion who transferred accounts, and so many lower proportion of people inSioux City who would not accept Federal money, should have been imple- took retraining. of the programs that Again, these results show thatalthoughit mented through the localpublic school system literally was 14 monthsbetween may not be possible toachieve complete equity, were not. It unions, the time the Federalgovernment allocated thecombined efforts_oLmanagement in automobile and public bodies can help. $70,000 for a training course mechanics and the time thatthe course actually Compensate and Educate started in Sioux City.During this period half had taken menial jobs Concerning displacement and steps tomiti- the interested workers and withIiittle gate its effects there areseveral problems or with little vocational content policy issues that might fallwithin the broad economic potential. purview of such a legislative group asthe Technologi- Space Industry for Whites, Commission on Automation and Shoe Repair for Negroes cal Progress. of shutdown A third factor is the needfor effective labor First, adequate advance notice counseling. Many dis- or displacementis important in the success market information and placed workers don't knowwhat jobs are avail- of any adjustment program. The success of the In the early shutdownsin Chicago, East able, or how to find one. in helping workers St. Louis, Ill., and Columbus,Ohio, there was Public Employment Service provision in the contract depends on the quality ofthe local employment no advance-notice Worth the counselors calling for mandatory advancenotice by the service counselors. In Ft. impending shutdown. By con- were notknowledgeable, and their advice re-_ company of an that labor market. trast, in Ft. Worth, inSioux City, in Kansas fleeted the racial bias in 90-day contractual The result of this bias wasthat Negroes in- City, the company had a into shoe repair obligation to notify employees of ashutdown. evitably were exhorted to go slaughtering, and the whitesinto In Dr. Weber's view thereshould be a law or poultry employees of more electronics and space industries. making it obligatory for all then, the states than "X-number" of employees tonotify their To help displaced workers, Employment Service can help greatlyby providing well-informed, employees and the Public perhaps when they are going to layoff a certain per- professional employment counselors, force. Such a law would on a rotatingbasis throughout the state. centage of their labor considered in pos- the workers in- The fourth factor to be require the employer to pay the ade- lieu of advance noticethis-would be a notice sible corrective legislation concerns the seven days gen- quacy of financialbenefits for retraining. of 30 to 90 days, not just paid erally stipulated in collectivebargaining agree- Workers in retraining programs are benefits that generally are pegged tothe Unem- ments. levels prevailingin The purpose of such a. lawwould not be to ployment Compensation the state. Also, theyreceive a stipend from penalize or impose an added cost on manage- is, do they get ment, but to create anincentive for manage- Federal funds. The question enough to live on? ment to engage inadvance planning.

46 - Many of us suffer from the puritanical no- 'Who is going to assume the costs?'' At the tion that a person shouldn't be too well com- same time it probably alsois true management pensated while he is training because he really often has been motivated by compassion.And isn't :"workin.g." Yet this argument appears unions, for their part, sometimes havebeen faulty. For one thing, experience indicates that diligent in confronting managementwith the the lower the level of benefit, the higher the alternative of more help for theworkers or form of dropoutrate.In addition, perhaps we can the threat of strikes or some other benefit by the example of other nations far less labor disturbance. And since1962 there has affluent than ours. Trainees in French and been a revolution in the activitiesof the Fed- Belgian government-sponsored retraining pro- eral government regardingthe problems of grams get 80 and 90 percent oftheir previous technical change. The law and programim- earnings. By contrast,in Illinois and other plemented by passage of theManpower De- states, compensation is only 20 or 30 pzr cent. velopment and Training Actin 1962 have been amended three times since,each time allocating Speed, Dollars, Compassion, and MDTA All Help more money andstrengthening the program A point to mention is the need to cut bureau- one way oranother. colic red tape. To paraphrase the old saying, "Help delayed is help denied." Time aftcr time, Paying the Cost of Lost Jobs in all the four states, Kansas, Texas, Iowa, and Is it conceivable that aunion and a company Oklahoma, the funds were available, the inten- could work out a package offinancial aid that tions were there, but there were unconscionable could stand the costs of workerdisplacement? delays in carrying these things out. The ca- If you take 50 cents an hourfrom manage- pacity to -react quickly in such crises as they ment to help the displacedworkers, this ob- develop is essential if t' .e workers and their viouslyisgoing to affect what happens to families are to be helped at all. other economic issues, butit does not seem Has there been an effective sharing of the reasonable to expect that priorparties can problems 'Of worker displacement by the var- handle the costs of all of these problems.Fed- ious responsible parties in the U. S. socio-eco- eral resources must be available.And coming nomic-political structureby management la;; to the states, they certainlyshould be capable bor, and government? education It would appear that there has been an in- of providing (a) good vocational funds creasing awareness of responsibilityinthis facilities, perhaps assisted by Federal 1964, area. Management andunions have been trying from the Vocational Education Act of to do more, even if not outof compassion. (b) good employment counseling, and(c) fast Often the critical consideration seems to be, action in bringing aid to displacedworkers.

THE PACKERS GO, THESTOCKYARDS STAY Chicago's Union Stockyards are Smallerbut Streamlined been felt, however, at the Union Stockyards. How the departure of major packersfrom has Chicago affected Chicago's famed UnionStock- 4 Although automation in packing houses of employees needed to yards was reported by Larry Caine,directpr cut down the number Stockyard process meat,automation itself has not ap- of public relations for the Union peared on the stockyards scene.Its effects have and Transit Company, Chicago.

4 NOTE: An interesting sidelight onthe financial adjustments madeby displaced employees is the disposition of the rather generousseverance pay receivedby workers released from Armour and Company in onecutback. These wages went ashigh as $6,000. A survey showed, however, that more than 50 per centof this pay was spent on theimmediate repayment of employees Credit Union. debts, and the primary claimantof these debts was thi Armour

47 The Union Stockyard and Transit Company proximately 400 cattle pens, the rail-shipping owns and operates the Union Stockyards which division, and the hog-selling facilities in the are Chicago's public livestock market for trad- 75-acre tract north of Exchange Avenue were ing on cattle, hogs, and sheep. It is inno way totally demolished. Concurrently in the south involved in the slaughter of livestock but isa area of the yards, the Company built a com- market only. The yards todayare shrunk to parable number of cattle pens, a new steel- half their former size but fora hundred years and-concrete hog-selling facility, and a modern the Union Stockyard and Transit Company rail-shipping division capable of setting 120 maintained the largest hotel in Chicago for fifty-foot rail cars. cattle, hogs, and sheep. During 96 of these 100 years, Chicago was the largest livestock Never a Plan to Close the Stockyards terminal market in the United States. Now, The officers and directors of the Union besides the Stockyard Company, which pro- Stockyard and Transit Company, contrary to vides the basic facilities for trading on live- some of the publicity at that time, at no time stock,there are 41 commissioned livestock considered closing the Chicago stockyards. In- firms on the Chicago market, repiesenting live- stead, they began a campaign to uphold the stock producersallacross the nation who basic--competitive-priee-basing-factor-of-a-pub- consign their livestock to Chicago. These 41 lic livestock market, namely establishing fair firms employ approximately 250 people, and values for livestock. there also are another 237 registered buyers Chicago was, at that time, and still is one of on the Chicago market. the basic livestock markets in the United States relative to establishing fair values for livestock, A Shift from Slaughter to Shipping no matter where it is sold. To compensate for The complexion of the Chicago stockyards the loss of buying power after the exodus of has changed drastically in the past eight years, the big packers, Eastern and Southeastern pack- following the exodus of the major packers, Ar- ers were contacted to procure their orders for mour, Swift, and Wilson. livestock to the Chicago market. One of the Prior to 1950, 65 per cent of the cattle, 80 outstanding advantages that Chicago offers is per cent of the hogs, and 50 per cent of the the finest transportation facilities of any mar- sheep and lambs slaughtered in the United ketplace in the United States. Chicago is the States were slaughtered within the immediate largest market adjacent to the Eastern segment stockyards area. In 1959, after the big packers of the U. S. with its two-thirds of the nation's had closed their operations and decentralized, population. the percentages had slipped to only 33 per cent of the cattle and 60 per cent of the hogs. By Not-Automation but Streamlining 1964 it was only 22 per cent of the cattle and Automation, as such, has not been intro- 33 per cent of the hogs. duced into the yards, but its effects have affect- Today there are 12 slaughtering plants in ed the Company's employment. In 1957, the the Union Stockyards area, including such Stockyards had a total of 385 employees. As firms as the Lincoln Meat Company, Illinois of mid-1966 there were 193. Packing Company, Reliable Packing Company, ,At the time of the major shutdowns, there American Meat Company, and Chiappetti was no economic injury to the Union Stock- Packing Companynone of the major firms. yard and Transit Company, but the economic What has happened is that the Chicago Stock- hurt has come since then as the packers have yards have gone through a transition from a funneled livestock away from Chicago directly slaughter market to a shipping market. to their plants. We did not originally anticipate that they would move completely out of Chi- Building a Better Stockyards cago. We had hoped that the packers would In line with this transition the Union Stock- put up a modern plant within the stockyards yards and Transit Company in 1960 began a area, but as basic reasons for abandoning Chi- niodernization program to consolidate opera- cago they listed factors such as low efficiency tions and make the yards more efficient. Ap- of labor, high taxes, and high cost of water.

48 The Electronic Beginningsof Banking

HOW TO AUTOMATE A GIANT

Machines Join People in the Nation's Banks personal trust and stock-transferprocedures and other areas has increased significantly. "Automation has made a dramatic entrance Such growth has been a result, not a cause. into financial circles and has placed us on the It reflects the overall growth of thenation dur- threshold of an exciting new age," stated Rob- ing this time. National population hasincreased ert K. Wilmouth, vice president in charge of about two per cent each year;economic ac- operations fortheFirst NationalBank of tivity, as measured by ,gross nationalproduct, Chicago. alsohasincreasedsignificantly. And with Mr. Wilmouth is in a good position to speak changing economic and social conditions an authoritatively. He has been responsible for the ever-more-demanding public has been seeking installation in his bank of a computer complex more assistance-in-a-greatervariety of services valued at approximately five.million dollars in categories. total initial costs. In addition, he is chairman of the Automation Committee of the American By A. D. 2100, a Nation ofBankers Banking Association, which represents more Inaddition to these external pressures lead- than 95 per cent of the commercial banks in ing to automation, there also have been several the United States. trends within banking that have exertedinter- Automation and the Big Banking Boom nal pressures for technologicalsolutions: Thesignificant move to bank automation First,is the continuing development ofin- begim approximately 10 years ago when bank tricatenew services,heretoforeforeignto management recognizedthat increasing op- banks, such as lock collection plans,freight erating problems, including a mounting work payment plans, and credit cards. load, were besetting the nation's commercial Second, is the shift, now well established, banks. from wholesale activities that serve thelarge A bank's most important job is processing corporations, to retailactivities that require checks. Each check passes through about two more detailed processingfor banks. and one-third banks and is handled as much Finally, there is the growth in bank employ- as 20 times. In. 1952, about eight billionchecks ment. Few industries in theUnited States to- were written, but by 1960 the total was ap- day exceed the banking industry inratio of proximately 13 billion. By 1970 there could clerical employees to total employees and ratio be an annual avalanche of more than.22 billion of payroiicoststototalcosts.if banking checks inundating the banking industry. employment continued its post-World-WarIll Other factors, too, have propelled banking growth, everybody in the labor force wouldbe mechanization. Between 1946 and 1960, the working in banks by the year 2100. nation's commercial banks had a great growth Bankers, therefore, have instituted mechani- of business activity. The number of savings zation to stabilize labor costs and preserve accounts increased 33 per cent; commercial profits. loans, 113 per cent; checking account activity, 163 per cent; mortgages, 290 per cent; and Mdgnetic Characters are a Boon installment credit, an impressive, mushroom- Banks have accepted these challenges with a ing 850 per cent. Also, the paper work of speed uncommon for a relativelyconservative

The accompanying chapter consists of abstractionsof the testimony presented by the witnesses appearing before the BankingHearings conducted September 15, 1966, bythe State of Illinois Commission on Automation andTechnological Progress. The testimony was presented in Room 212, Illinois State Capitol Building,Springfield, Ill. NOTE: See Appendix for the list of witnesses.

49 profession. To investigate the possibilities of market and business researchactivities,for using mechanization in banking, a cooperative example, in finding the best locations for the enterprise was developed by the American development of new retail banking customers, Bankers Association, the printing industry, the or in choosing locations for branch banks. office equipment manufacturers, and the data And computers are used to determine the num- processing research groups formed in the late ber of telrers needed at a given bank period; 1950's by the major banks in the country. for capital investment analysis studies; and in The first solution developed by this group bond trade analysis programs. wasMagneticInkCharacterRecognition, known'as MICR, and a great boon in process- A New Way of Banking Life ing the mounting volume of checks. This group For business firms, banks can provide auto- also designed and produced equipment to meet mated customer services such as account-recon- the needs of banks of allsizes, equipment cilement programs,bill-collectionprograms, ranging from semi-automatic "tronic" book- sales analysis, accounts receivable and payable, keeping machines to fully-automated systems expense analysis, and inventory controls. Com- that are linked to high-speed computers. puter services to financial institutions can encompass-bookkeeping-prograrns--for-banksrand Breaking the Check Barrier other financial, investment, and insurance organizations. Services for individuals may in- Breaking the check barrier is perhaps bank- volve income and disbursement analyses; con- ing's biggest single automation :,uccess. This solidated statements of all the information on is where those lumpy Arabic numerals at the a savings account, checking account, orinstall- base of checksthe MICR figurescome in. ment credit account; automatic debits, and even When a check comes into a bank, the dollar a paying-agent service. amount is imprinted in magnetic ink beside the other numbers. Then the checks go into a Automation, Small and Large "reader sorter" which reads the magnetic ink These automated banking activities are not on the checks, sorts them into pockets repre- solely the province of a giant bank, although senting either other banks or checks written it does require ingenuity to employ the new on accounts within the bank wherethey are technology in the smaller banks. Yet is auto- received. The reading machine, which has re- mation desirable at all for small country banks corded the magnetic ink data on magnetic tape, the nearly 10,000 small institutions with less transmitstheaccountnumber anddollar than $10 million in deposits? The best answer amount to the computer. The computer in is that the management of each bank has to turn posts the items to the proper accounts decide what will be best for its particular needs. and then figures out a new balance for this Various approaches to automation are available account. Deposit tickets are handled in es- for the small institution. sentially the same manner. At a fraction of the cost of large-scale digital The cost to customers for these automated computers, smaller banks can use non-sophisti- services has not risen as a result of the intro- cated but efficient and economical small-scale duction of electronic computer devices nor has computers. Some small banks have banded to- it been significantly reduced. gether in cooperative arrangements to use the same equipment. Finding Business, Analyzing Bonds And the new data-transmission facilities are Computers have other important banking helping to make automation more feasible for jobs besides deposit accounting. They are used the relatively small local country banks located to keep track of consumer, mortgage, and com- outside metropolitan areas. mercial loans; do trust accounting work; and handle the bank's own book work. All these Sometimes Computers are Too Expensive functions are performed with greater accuracy What is the rate of automation in large and than in non-automated systems, and accuracy small Illinois banks? To find out the American is a prime requisite for banking operations. Bankers Association conducted a survey in Computers also are useful banking tools for May. 1966, of the computer status of banks in

50 of Illinois' where the phone lines go. Illinois. The survey covered 255 also 1,064 banks, including every bankwith more Other devicesin telecommunications bank out have banking applications,including: than $25 million in deposits and one avail- of every four with less than$25 million in de- Long-distance Xerographyalready representation from posits. able, for projecting graphic had a com- one location to another. Out of the 255 banks studied, 47 Audio-response unitsnow in trial use,for puter installed and operating orhave since had informa- it installed; 45 banks used anoff-premise com- keying in numerical or alphabetical audio response the puter service; 23 did nor nowhave a computer tion and getting back in or did not use anoff-premise service but plan information that is stored on a computer. for a computer or off-premiseservice;140 Telephone check-writinga blue-sky pos- and at the sibility, by means of which thehousewife of didn't do any computer processing touchtone card- present time had no computer onorder or had 1975 could use a standard dialer telephone to "call in" herchecks. no plans. with The major reason that these latterbanks are Optimal scanning equipmentused automated computer equipment to scan apiece not automated is cost. They aredoing a better --job-right_now.,...or_aLgood a job, with the man- of paper and put the informationfrom it onto- ual system, combining Jowlabor costs and manetic tape. efficiency. Particularly away from thelarge Using terminal devices operated inconjunc- metropolitan centers, where labor costs are tion with on-line real timesavings systems a knowing its lower, a computer can't beat a good,workable, bank has the capability today of By de- low cost "sight pay single post"bookkeeping passbook liability at any given moment. devices, system because processing costs aretoo high. pressing a few keys on the terminal this system automatically will update a pass- Across the Nation book chronologically, indicating everyentry, The American Bankers Association recently the monthly deposits, and alsothe deposits of conducted a national survey of computer use interest accumulated to the account. of the in almost 9,000 commercial banks out Speed Goes Up, Cost Goes Down U. S. total of roughly 15,000, giving abetter bank There is no doubt at all that computers are than 50-per-cent sample of commercial gettine smaller, faster, and cheaper to rent or automation. The results show that banks are into the varieties, and buy. The first reader-sorter brought installing computers of all sizes, banking industry cost well in excess of$100,- shapes at a very rapid rate. for is eco- 000. There is one on the market today This study indicates that automation roughly $17,500. Some high-speed printersthat nomically feasible in larger banks; it alsoindi- print both alphabetic and numeric formshave cated, however, that between 1956 and1970 there are deposits cost $75,000 or $80,000 apiece; almost 60 per cent of the banks with slower printers on the market today thatprint adopt auto- of $10 million to $45 million would only about 300 lines a minute, but they rent mation, and that in the very smallest banks deposits- for approximately $300 a month. those with less than $10 million in Computer utility coinpanies are developing 19 percent expect to become automated' or to to service banks of allsizes. A large bank use automated servicesby 1970. Beyond 1970 mieht use such a utility organization for ma- automation is expected to spread to 37 per chine backup and for peak period usage.A cent of these small countrybanks. small bank with deposits of a fewmillion dol- Banking by Wire lars might contract with the same company Hardly i. day goes by that the banking press for a full range of bank bookkeeping services. does not comment on the new breakthroughs Larger banks are supplying computer services in data transmission. This capability for send- to smaller banks. There is really nolocation ing banking data at electromagnetic speedfrom in Illinois where it is technically infeasiblefor one location to anotherwill change bank ser- a bank to employ automatedservices. In most vices as we know them today. The telephone banks across the country, computer services to will now take data processing services any- smaller banks are rendered on a fee basis.

51 ?

, No Checks, No Cash, But Not Yet two areas, namely, human skills and human What about the future? totals or numbers. Even with all these technical advances, the The question of how to select the right peo- customer is still paying cash for his purchases ple for bank automation is settled almost uni- and he is still writing checks. The age of the versally by recruiting present staff. There is a checkless society or the cashless society still serious shortage of people with the needed tech- has many obstacles to overcome before the con- nical skills. The training period isrelatively cept is readily accepted both by bankers and long, and thereis great competition among the general public. There are trends, however, banks for these technical people. The major that indicate that we will use less and less cash problem today is to get the necessary trainees. and fewer and fewer checks. George W. Mitch- Banks generally have trained their own person- ell, a member of the Federal Reserve Board nel, but the need for trained people is so great and an advocate of the "checkless-cashless" sothat t iere is a definite need for schooling in this ciety, replies to those who are skeptical about area. Southern Illinois University has data pro- this development that most of the innovations cessing courses, as does the University of Illi- involved already are being used piecemeal by nois, and there are even high schools that are individual banks in all sections of the country. now starting data processing courses. The other question about people relates to A New Triangle: Bankers, the number of employees. What becomes of Automation, Employees people who have been Asplaced by automa- The future of bank automation from the. tion?* The answer in almost all cases is that technological standpoint holds many promising they are transferred to similar or better posi- opportunities for both the banking fraternity tions. The factisthat statewide inIllinois and for the public. Bankers have kept abreast banking employment actually has risen about of new technological developments; at the same one-fortieth. This is partly the result of the time they have not forgotten about the human offering of new services, but in no case have factor, the problem of people in automation. people been summarily dismissed because of

This is a subject that breaks down roughly into mnomation.,

THE CAREFUL APPROACH TO E.D.P. Form a Committee, Make the Bank Grow president of the Commercial National Bank of Peoria. Mr. Connor's chief area of responsi- "Automation is a relative term. The type- bility is the operations and administration of writer automated the quill and pen. The proof the bank. machine automated the adding machine. To The Commercial National Bank of Peoria banks, the printed-circuit, transistorized phase isthe largest Illinois bank outside Chicago, of automation is a logical and vital next step the eleventh largest in the state. It has footings in a continuing fight to survive." of $170 million and employs 290 people. This This evolutionary theory of automation was bank has been operating an EDP installation expressed by David E. Connor, senior vice since November, 1964, and as of September,

*NOTE: On the subject of man and automation an interesting comment in poetical form is the following verse, "Ode to Us, or Man Versus Machine," by Hilbert Schurcle, Jr.: "I think that I shall never see, "A me that looks at girls and such,"A me that taps a foot and grins, A calculator made like me. But mostly girls and very much. Whenever Dixieland begins. A me that likes martinis dry, A me that wears an overcoat, They make computers for a fee, And on the rocks, a little rye. And likes a risque anecdote. But only moms can make a me."

52 1966 was using an IBM Model 1460 tape sys- quate personnel was anotherfacet of the cost tem (an IBM Model 360 was scheduledfor problem. The turnover rate washigh. Most delivery later in 1966). This degree of auto- employees in the bookkeeping andproof de- mation has permitted the bank to operate departments were female. Theirjobs had little mand deposit accounts for seven to eight cor- glamour; many married early. Offeringhigher respondent banks and to provide such services wages would have madeit impossible for the as payroll accounting, generalledger, and ac- bank to stay competitive. count reconciliation, for miscellaneous commercial customers. The Committee is Formed Bankers are basically favorable tothe idea The Paper Assembly Line of automation, both because oftheir own ex- The first reason for automating the Com- perience and the experienceof their major mercial National was the rising volume of customers. With thispredisposition, therefore, paper that needed to be processed.Processing and prompted by those Svengalis,the equip- paper is- a bank's assembly line.Some people ment salesmen, theCommercial National Bank. manufacture cars; banks manufacture paper investigated EDP as a solution. work. Tfii-iThEakhas been experiencing an The costs of installing anED-P§3-17s em are increasing use of 'checking accounts, more monumental. Commercial Nationalhadto types of savings, more transactions on each know where it was going withthis large ex- savings account, and more installment loans. penditure and why it was going there.To state The use of its Trust Department has been its objective the bank formed a groupcalled increasing probably as much as that of any the Management Committee. As abasic step in other service in the bank, and in addition, the formulating the bank's automationobjective bank has an increasing number of governmen- this Committee asked thefollowing question: tal reports to fill out. "Will EDP stabilize unit costs of paperwork The second reason for automation at Com- processing at a level far enoughbelow the mercial National was the development of a present rate extended?" management information system. In the long In other words, if bankservices continue at run thisis going to be the most important their present rate, without increase ordecrease, aPplication of automation. Both of these prob- for a period of five to 10 years,will the savings lem areaspaper work costs and the mainte- in costs realized by operating anEDPsystem, nance of an adequate informationsystemare compared to the costs of the presentsystem, really economic in nature. be sufficient to justify the originalEDPcost? If not, will other advantages ofthe automated Automation 'is NOT Judgment system still make itworth assuming the addi- A bank, like any other unit in thefree- tional cost? enterprise system, has to keep its cost as low The Management Committeeconsisted Of a as its competitors', andthis requires at least member of senior management,the chief op- comparabte knowledge of current conditions erations officer, a staff memberassigned to and changes. Yet -institutions that havesimilar organize the feasibility study, and anoutsider costs and data accumulation will stillreach who was hired to providetechnical competence. different decisions, for no level of automation This group basically was a study teamreport- conceivable can replace the judgment of men. ing to senior management.Buck-passing about automation stopped at the chair ofthe Com- Little Glamour and Early Marriage mittee's member of senior management. These were some of the general conditions The Commercial National reachedseveral and specific problems that led toautomation. conclusions or answers: tool, There were others too. Electronic data processing is a proven The trend of costs at CommercialNational and an important one to amedium-sized bank with the big was not reassuring.Providing physical space that wants to stay in the swim for operations was becoming more and more boys of today's banking. difficult. Securing, training, and keepingade- Electronic data processing can help to sta-

53 bilize costs, including the amortizationof the scores on this test.Some reassignments plus reduction in sizeable start-up expenses. the expected annual 20-per-cent Electronic data processing has the poten- the staffs of the bookkeeping and proofdepart- tial to be extremely valuable in management ments because of turnovermatched the 20-per- information. Sophistication in the field isvital 'cent expected reduction in thesedepartments categories to successful installation survival. because of automation. Also, job The personnel problems are notinsur- changed, involving some retraining.In sum- increased for some, mountable. mary, job opportunities The audit capabilities of data processing decreased for no one, and made nodifference are among its mostsignificant advantages. If to others. It is fair to saythat fewer girls were in the it is properly understood, auditing throughelec- hired. The untrained high school girl, tronic data processing is a major stepforward banking industry, is becoming obsolete. easier, more accurate, more detailed. To some extent rented machineshave been Automation is a very complicated subject, substituted for personnel in the lower-wage to be approached with care and a veryhigh categories. But the total payroll, both in num- level of top management awareness ofthe ber and dollars, has increased.The employ- promises and problems involved. ment profile has changed.

After Blarney, the Roosting Chickens Better Banking, Bear Wrestles,alai-Burials On the basis of these conclusions,the Man- This move to automation has beenconsistent National pol- agement Committee recommended tothe Exec- with a long-standing Commercial utive Committee of the Board that the Com- icy aggressively attacking unit costs sothat the mercial National proceed to install automated bank can profitably expand itsservices and equipment. add new ones. This policy has led to a one- This same method of study is still followed per-cent annual increase inpayroll numbers operating earn- as the CommercialNational moves ahead in and an annual increase in net this fascinating field of automation. The pen- ings of about four or five per cent a year. Com- alty for faulty planning or wishful thinkingis Automation development costs at the The as great as thepossible benefits. A great deal mercial National were about $300,000. of blarney exists in the EDP fieldblarney bank expected to recover these costs over a from equipment salesmen, EDP personnelwish- five year period, beginning in 1967. ing to build departments, and top management Many new services Shave been added,with people who like to brag a little. A bank must many more to come.Commercial National is be known for proved performance.In EDP, like the Russian who wrestled thebearHow promised chickens have a way of coming home does he let go of it? There are many,many to roost and roost and roost. new developmentsin EDP/coming forward all the time. Electronic Data Processingis a fact No Obsolete High School Girls of life. The banking industryhas to learn how In 1961, the Commercial and CentralBanks, to adjust to it and workwith it, because if it of Peoria merged. Employment at thatpoint, doesn't, EDP will bury the banks. which naturally included some duplication, The use of EDP in bankingwill increase. numbered 277. This duplication was one ofthe After demand deposit accounting andsavings reasons for the merger.Five years later (Sep- (primarily in large banks) are automated,other tember, 1966) after some of the duplication applications will be added as part of a manage- has been eliminated, employment has grown ment information system, andprobably will be to 292. There were 58 officersthen and 58 justified on an incremental cost, thatis, the officers now, not the same officers, but the main system will absorb the great partof the same number. expense, and thenthe incremental use will be Every employee was told that no one would justified. lose his job because of automation, and every employee was offered the chance to take a pro- Add EDP Skills to School Curricula- grammer's aptitudetest. Programmers were Electronic dataprocessing.-vAl cause em- selected from those who made thehighest ployment to increase notonfy in the EDP divi-

54 ston but in tne rest of the bank too.About 60 part inheritedthe native orfamily-inherited percent of the banking business is done in .two ability of being able to put square pegs in days out of the week. You have to staff for square holes. But some of the morecomplex, that peak. The rest of the week the staff is systemized skills such as 'logic and higher math relatively less employed, and considerably more must be learned. The schools inIllinois must work can be processed during that time. More recognize this need and move to answerit services, therefore, can be offered, in the long quickly. Computer techniques should be taught run boosting the bank's total employment. intheschoolsasfrequentlyastypingis The skills necessary for EDP are in some taught today.

FROM CONSERVATISM TO COMPUTER People, -NotE-quipmentrAretheKey percentage of checks in circulation with MICR qualifications. Further, this proposal also con- In an industry often noted for its conserva- sidered the possible direct benefits to the bank tism, the bank represented by William V. Allen of sending its processing work to a correspon- has been particularly conservative, according dent bank, a service bureau, or a mutual coop- to Mr. Allen himself, who is a vicepresident erative or even of obtaining its own equipment. of the institution. This is the Oak Park Trust At that time the equipment manufacturers said and Savings Bank, an 88-million-dollar institu- that buying or leasing computer equipment tion located in the Western Chicago suburb of would not be justified for a medium-sized bank. Oak Park. They were willing to accept the order, however, Investigation of automation possibilities for when it was placed. Oak Park Trust and Savings was prompted, by :The Boaxd approved MICR imprinting but the development of the magnetic ink common specifically withheld approval of any further language. For the first time they... was some in- venture in the area of automation. Oak Park dication that it could be feasible for a bank of Trust and Savings installed a numbering sys- Oak Park's sizethen, in, 1960, $76 million tem, but found that their check supplier could to consider the possible benefits of automated not provide magnetic ink coding foranother processing. If the original document, the check year. After difficulty in instituting a temporary or deposit, could become direct input withrela- alternative system the bank, in July, 1961, in- tively minor additional handling (as opposed stalled on-premise MICR printing equipment. to a tab system) the possibilities seemed worth The Computer Arrives investigating. After examining equipment of five manufac- Many Magnetic Advantages turers and reviewing proposals from three, In September, 1960, several representatives the committee recommended that the bank of the bank went to a clinic sponsored by a purchase a Burroughs 270 system. The sorter- check printer to learn in detail the require- reader was delivered in October, 1961, and was ments and problems of magnetic ink character used for physical sequencing of checks andfde- recognition. They returned to recommend that posits, thereby replacing manuai sorting and Oak Park institute the MICR system. replacing three employees. These three people One reason for recommending MICR encod- were transferred to other positions inthe bank. ing at this time was to cooperate with the Fed- The complete computer system was delivered eral Reserve System and assist their early use in late December, 1962. of high-speed processing. The proposal also Low cost accounts were converted by May, was prompted by Oak Park'sdesire to obtain 1963, and in July the rest of the checking ac- economically and as soon as possible a high counts were completely converted. In Decem-

55 -employees in this areawas ber,1963--pr6of and transit were converted, The number of reduced over a three-yearperiod from 53full- making Oak Park Trust and Savings the second futl-time and nine part- bank in the Chicago area to convert this appli- time employees to 18 laid off. cation. time.No employee was Salaries -paid now arequite a bit higher Stepping Stones to Conversion than before automation.Bookkeepers formerly job Other applications since converted include earned about $275 amonth; the equivalent savings, installment loan, mortgage loan, pay- now pays $375 to $390,and in the computer- roll and personal trust. Scheduled for future operator area pays more.Total employment than it was six years conversionaregeneralledger,commercial now is about two more loans and some customer services. Using a ago. Theproductivity of eachindividual un- stepping-stone approach, Oak Park Trust has questionably has increased;each job is a little concentrated on its own internal applications. more interesting now. The computer is used in several other applications such as direct mail envelope addressing People Not ComputersAre the .Key and market review, but there are no present Oak Park Trustand plans for getting into real management infor- Before automation, Savings was beginning toencounter shortages mation systems. of personnel evenremotely qualified tofillits The present computer very well \may be the the bank's present em- last one at Oak Park. In the future it may be needs. By contrast, ployees are competent.They enjoy their work, more practical to utilize anoff-premise com- well paid for the puter utility through leased lines, while prob- and they are reasonably jobs they do. ably retaining some peripheral gear atthe computer, are thekey bank. The advantage of purchase over leasing The people, not the to a successfuloperation. First-rate people was quite substantial as long as the same sys- skillsand a second-rate tem was retained five years. that is, with first-rate computer are preferable tosecond-rate people FewerEmployees, But No Lay-Offs and first-rate computer. It does not seemlikely that Oak ParkTrust Six years ago the operations which then overall were performed manually, and are now onthe and Savings hasadversely affected the computer, required 53 people and a sizeable labor market.- The Bankhas created new, more jobs at better pay amount of investment in machines and floor rewarding, more interesting has been eliminated space. The direct salary expense forthese em- levels. The only thing that ployees alc..2 was 27.9 per cent of the bank's is the employmentof the marginally employ- able. Even these people werebecoming scarce, total salary expense. These same functions now would be vir- cost more in equipment but less in floor space and from all indications now and only 13 ,per cent of total salary expense. tually unavailable.

ENTER, THE PROBLEM-SOLVER Don't Forget the Birthday Cards Chicago suburban city of about50,000 located 17 miles northwest ofChicago's Loop. The How does progressive bank management in First National was charteredin 1913, when 3,000. Growth a dynamic suburban city goabout 'determining Des Plaines was a town of about the feasibility of automation? isa vital influencein decision making, and An answer to this question was given by itis significant to note thatthis community Joseph J. McAndrew, assistant vice president and the bank have growntogether. In 1930 of the First National Bank of Des Plaines, Des Plaines had a populationof 8,800 and who has had 27 years experience in data pro- the total assets of the bank were$1,200,000. cessing. This bank isin Des Plaines,Ill., a In 1940 the figures were9,500 and $3 million:

56 in 1960, 35,000 and $44 million; and in 1965, was to make banking moreconvenient for the after a special census, more than 50,000 'and customer. nearly $70 million. Savings data were keypunched and sent to a For the First National's assets this repre- service center in the lati'er part of1963. A sents a growth of 220 per cent from 1950 to statement representing the last quarteractivity 1960 and an additional 57 per cent from 1960 was prepared for eachof the 17,000 customers. to 1965. In 1957 the bank moved into a new Early in January, 1964 IRS form 1099's,for building, anticipating more growth. Later a those who needed them, and anadvertising second bank was chartered in the city, and to- brochure explainingthe new systemwere day, competition within Des Plaines includes mailed out. two other banks and two Savings and Loan Another recommendation to the bank was Associations. Within a .seven-mile radius there that business checking accounts beprocessed are about 20 banks and 10 Savings and Loans. by a correspondent bank automationdepart- Early in1961, management became con- ment as an introduction todemand deposit cerned with the organization and operational account processing. The Bankdid not react requirements needed to .continue giving the favorably to this recommendation, however, best possible service despite ever-increasing because these accounts were notsegregated workloads. When the bank moved into its new from other commercial accounts. The FirstNa- quarters,itbeganusingsemi-automated tional decided to obtain competitive bidsfor "tronic" bookkeeping machines, but soon the complete demand deposit accounting process- bookkeeping function was on two shifts. The ing from correspondent bank andcommercial question was: "Is this the time to consider the processing centers. ti? potentials of automation?" Discussions were held with large Chicago Meanwhile, Back at the Problems Loop banks that were doing correspondent At tile same time these studies werein pro- servicing, to determine what internal changes cess the volume ofwork continued to increase would be required to go to automation. and personnel turnover was becoming more critical. Employee wages at the FirstNational What Can Take the Place of People? were higher than at most.of the surrounding The influx of industry into the area that was competitive banks, and fringe' benefits were contributing to the growth of the community equal or better, yet recruitment wasbecoming also was contributing to a problem for the more and more difficult.One factor was that hanks. The unemployment rate was declining banks in the area are closed onWednesdays, constantly. The financial industry never has requiring a double workload on Thursday, re- been notorious for high salaries, :And 'personnel maining open until 8:00 on Friday, andwork-. turnover was becoming a critical factor in the ing five or six hours on Saturday;although bank. The source of new personnel was dis- the average work week is only 371/2hours, the appearing. split week is not popular. Another factor,al- Management quickly decided that this was ready .alluded to, was that theunemployment the time for professional evaluation, and con: rate in the area dropped below two percent. tracted for a professional study of the prob- And so armed now with the bids forfurther lems and recommendations. A final report, computer processing and facedwith these submitted in October, 1962, recommended that staffing problems, management decidedthat the bank begin to use computer service centers the time had come to order a computer system and delay considering an on-premise computer of its own. To reaffirm dieir conclusionthey for five to 10 years. had another management consultingfirm reap- The management of the First National de- praise current conditions. cided that orie of the first steps in following The consultants' report, submitted inFebru- these recommendations would be to establish ary, 1964, confirmedmanagement's decision, "universal tellers," and simultaneouSly adopt as evidenced bycomparative estimated annual "staternent savings" with quarterly statements costs of processing only demanddeposit and to be mailed to the savings customers. The aim savings accounts. Tlie consultants' report con-

57 eluded ihat the present system employed by the charge calculations and special mailings; 4. bank for these two applications was costing Elimination of interdepartmental assistance in $345,000 a year. Bids obtained from outside putting up checking account statements, other service agencies would have reduced the ex- than month-end; 5. Servicing 2,500 additional pense to $337,000 a year, but according to deposit accounts; 6. Evidence of an even swap the plans that had been formulated, installing of wage dollars for equipment rental dollars. a computer on premise to process these two The First National of Des Plaines currently applications would cost only $330,000. processes through the computer 17,000check- The potential saving with automation would ing accounts, 18,000' savings accounts, 7,500 be $15,000. And the machine systems also installment loan accounts, 5,000 safe deposit could provide for further growth potential, a billings, 2,000 Christmas Club accounts, stock- more stabilized and upgraded work force, addi- holders' records, and deposit bag billings. The tional customer services, and flexibility of op- computer even prepares the envelopes for the erations. These potential automation benefits birthday cards the Bank sends to junior savings supplied the impetus for immediate action. customers. Other services available and being offered include account reconciliation for busi- Automation Arrives ness customers' payrolls; processing forother_ All employees were given the opportunity to banks or savings and loan associations; job- take operator and programmer aptitude tests, cost schedules; accounts receivable and billing. since the' Bank planned to staff from within, as far as possible. Automation is a Many Talented Thing Mr. McAndrew joined the Bank at the end Some of the more common factors the First of June, 1964, and after a review of previous National of Des Plaines considered in evaluat- studies, and an appraisal of current conditions, ing the decision to automate were: to freeze he established a programmer ,training schedule or reduce operating costs; to iinproveinternal for three employees. It was to,be completed by systems; to improve management reports; to the end of August. The delivery of the com- offer additional services to customers; to in- puter was advanced from March, 1965 to the crease flexibility for handling additionalvol- end of September, 1964. ume; to provide a tighter audit control;and On October I, 1964 the First National's to meet competition. own computer prepared the quarterly savings All automation system studies have a com- statements. Processing of all Special Checking mon objectiveto eliminate waste and improve Accounts was converted to computer process- efficiency. Increased workload volumes force ing on October 15, 1964 and all other check- business at some point in their progress to shift ing accounts,were converted November 21. into a departmentalized organization. Depart- Also, another program was modified to fit the mentalization requires batch processing, and Bank's demand deposit accounting program. this requires progressively burdensome control. Departmentalization also breeds specializa- Three Months Later tion, and this can constrain individual per- As of December 31, 1964, the night shift formance so much that ,incentives are dull or was eliminated, and normal attrition pared the deadened.Carelessnessresults,causingin- day shift down to contemplated requirements.* creased errors and waste. Continual systems The Data Processing Department added four evaluations are a prime requisite to efficiency. upgraded positions. The basic difference between manual and au- The results of three months of computer tomated systems is that automation requires in- processing indicated the following*: creased accuracy in the preparation of source 1. Net reduction of 17 employees; 2. Elimi- information. Once data have been accurately nation of overtime in bookkeeping; 3. Dis- transferred into machine-recognizable media continuance of outside services such as service (such as punched card, punched ,paper tape,

*NOTE:Night shift employees were given the opportunity to work full-time during the day. Many of them were not in a position to accept this because they Were mothers and could not come to work during the day because they had to care for their children. Additional workers were hired to take their positions.

58 magnetic ink characters, or optical reading tion that a loan officer does concerning the font) ail such input controls can be reconciled amount ot mortgage loans and type of prop- readily. The basic manual operations th..*. re- erty, could be computerized, itisstill up to main are the disposition of the original input the individual to make a judgment. What the documents and distribution of machine pre- computer does. primarily is assure management pared journals and reports. The initial justifi- that all loans and all credits have been proved cation for automated systems can be achieved against all known criteria. by paring down duplication of effort and ineffi- Primarily because of overall growth an or: ciencies in the present system. ganization utilizing automation inevitably ends up with as many, if not more employees than More Business Still Means More Employees it had prior to automation, and most positions Management is not in danger of being re- are, upgraded because they entail more author- placed by the computer. Although the evalua- ity and responsibility.

THE BANK EXAMINER MEETS AUTOMATION Studying the Bank with it§ Own Equipment Approximately 25 per cent of the 640 Il- linois State-chartered banks either have their Since automation has come to banks it also, own automated equipMent or are subscribing necessarily, has come to bank examining. to serviceS- offered by_ other finantial institu- The- influence of automation on bank exam- tions or data processing centers. ining in Illinois was discussed by Paul Starkey, Less than five per cent of the 640 State- a review examiner in the Department Banking chartered banks have their own automated Division, State of Illinois Department of Fi- equipment; most of these are in Chicago and nancial Institutions. The Division, reported Mr. Cook County. Starkey, realized some time ago that, with Approximately 20 per cent of the 640 banks using more and more automated equip- banks subscribe to automated services offered ment and procedures, certain studies would by either other financial institutions or service have to be made to determine the effect of this centers providing the automated services. The automation on the State's examination proce- majority of the servicing agencies are in Metro- dures and techniques. As used here, the term politan Chicago. automated equipment means both semi-auto- Approximately 10 per cent of all banks mated and fully-automated systems. with less than $10 million in resources were To pursue its investigation, the Banking Di- a.utomated or subscribed to automated services. vision initiated a study early in 1966 and, as Approximately 55 per cent of all the banks a result of the information gathered, has ini- with resources from $10 million to $50fnil- tiated an automation program designed to fa- lion were automated or subscribing to automat- cilitateits examinations and to fully utilize ed services. Of the banks in the category of the automated equipment in the banks. $50 million to $100 million trks resources, 80 To implement its study the Banking Division per cent had their own automated services; all circularized all Illinois State-chartered banks, banks with resources of more than $100 mil- and devised a 23-page questionnake (similar lion in the State of Illinois have their own to one used by the New York Banking Depart- automated installations. ment), that requested information about the The survey divided bank§ into three cate- type of automated equipment installed and gories according to the equipment they used: other pertinent information. 1. Electronic data processing equipment us- The response from the banks was practically ing magnetic-core storage and tapes and discs unanimvus; the results of that circularization for data storage; 2. Semi-automatic equipment and survey can be summarized as follows: such as a combination of punched cards and

59 core storage; 3. Even less-automatic equipment Machine time is extremely valuable, and banks than category No. 2such institutions consid- have schedules they must meet. ered non-automated in this survey. Building a Nucleus of Automation Bkills Not as Big a Cut as Expected It is not anticipated that examiners will be The questionnaire did not probe the number involved in the operating of automated .equip- of employees displaced by the automated in- ment.. Present plans encompass the additional stallations, although it did request information training of examiners, particularly a few ex- on the qualifications of the bank personnel_and aminers as specialists. also data on the average monthly cost of using ,off-premises services. °Apparently the reduction More Automation Means More Accuracjf, of personnel originally contemplated has not Results indicate that automation has not been realized. Also, the additional volume of changed the objectives of the conventional bank work that is performed must be considered. examination. Yet there is no question that there are better and quicker ways to get the necessary Testing You with Your Own Equipment information than the conventional examination, In conjunction with the questionnaire and requiring, as it did, so many examiner man- as a result of the information received from it, hours. There alsois no question, aside from the Division has embarked redently upona temporary malfunctions, about the increased -program commonly known as the pre-examina- acfmracy of records in automated banks. - tion survey. his survey is a review of the automated equipment and procedures thata Doing the Examiner's Job State-chartered bank may be using, the aim One of the areas of bank procedures that being to determine what equipment will be of must be given increasing attention in the ex- use to the examiners and how they will use amination is the time and effort given to 'the it. Although the pre-examinationsurvey, as a Electronic Data Processing Department by the technique, is not new nationally, it isnew to Audit Section of the bank. Illinois. It is the first attempt to take advantage The quality of applicants for mortgages and of the wealth of information that automated installment loans is of interest to the bank ex- equipment and automated services make avail- aminer. The August, 1966 issue of Audit Gram able to examiners. It includes the following: ,tells of a West Coast bank and a computer Two or three months before the regular but manufacturer that have prepared a program that calculates a desirability score for mortgage unannounced bank examinationina given bank,examinersfamiliarwithautomated applicants on the basis of geographical area, equipment survey tke bank. The examiners type of property, and characteristics of the determine which portions of the print-outs will applicant. They also have devised a similar be most necessary and useful for the examina- program for evaluating installment loan appli- tion, secure sample copies of the print-outs, cants. This is not exactly displacing an exam- and make comments and index those forms iner function, but it could certainly implement so displacement to a great degree. that they can be readily usable by theexam- Such functions, coupled with the implemen- iners when they go inon the regular examination. They also observe the routines involved tations of the central file information systems currently being developed, will greatly facili- more fully than would be possible during the tate the procedures we use in State bank ex- examination because of the press of time and aminations. The Banking Division is greatly the scheduling of other bank operations. encouraged by the prospects of the help it will This procedure enables the Departmentof receive in this area. Financial Institutions to facilitate examinations, and it also benefits the bank by permitting it No Need to Automate Ourselves Yet to get back to regular operations more quickly. The Division's plans for using automated The Department can schedule its requeststo systems have changed somewhat, even in the banks for the survey so that there isa minimal short period of time that it has been studying interruption of each bank's normal work flow. the problem.

60 Concerning the degree of control that it will and under close examiner supervision. attempt to establish over the production and The Banking Division does not yet have any the generation of print-outs the Division prob- programs developed or written -thatcould be ably will evolve some combination of the pre- applied to the computers producing the print:- examination survey plus programs-written and outs that we require. There is no automated desianed specifically for its use or the use of equipment in the Division whatsoever. The the auditor of the bank. Then, rather than the matter is under continual consideration by the examiners actually performing the control func- Division, however, and if it becomes feasible tions themselves, the control functions would ,and necessary to automate its operations, the be performed in conjunction with the auditor Division will certainly take the necessary steps.

New Computers, New Skills forInsurance

REMODELING BY ELECTRONICS Fewer Offices, More Employees, GreaterSkills their memory capacities and processing speeds have increased a hundredfold. Why? Because 'The years from 1952: to 1957 were the they're no longer mysterious. Office adminis- glamour era of electronic computers," states trators have been systematically studying, ana- A. C. Vanselow, vice president and comp- lyzing, and evaluating the benefits offered by tr011er of the Franklin Life Insurance Com- this new method of mechanized accounting and pany and past chairman of the National Auto- record keeping. mation Committee of the Life Office Manage- Insurance administrators have been search- ment Association. Mr. Vanselow continued: ing for new tools to help lighten the ever- "Newspapers, magazims, radio and televi- increasing burden in their offices which has sion commentators and public relations men been brought on by more record-keeping for related the feats of prowess that appeared to state and Federal governments, by.the shortage be limitless. The new electronic brains augured of clerical workers, and by the economy of to substitute the machine for the common abundance that has made all business boom. functions of the human mind. This is an era where the clerical and adminis- "It also was during this era that numerous trative jobs in the office have grown from articles were written predicting wholesale un- minor positions to jobs of tremendous impor- employment as the result of these machines." tance. The first phase, involving the pioneers in the insurance industry, has passed into the, next Discard the PunchedCard Approach era. Electronic computers, now commonly re- The rate of technological change today is ferredtoas data processing machines, no more rapid than any we haveknown previous- longer are considered spectacular even though ly, and it promises to increase, giving us not

The accompanying chapter consists of abstractions of the testimony presented by the witnesses appearing before the Insurance Hearings conducted September 15, 1966,by the State of Illinois Con?mission on Automation and Technological Progress. The testimony was presented in Room 212, Illinois State Capitol Building, Springfield, Ill. NOTE: See Appendix for the list of witnesses.

61 7

only instruments for cutting costs but, more the continued demand forits services without important, tools for extending the rangeof introducing data processing equipment. man's capability. Well Designed for Automation Much of the work done by a lifeinsurance Following FranklinLifels contracting for a the policybwner company consists of service to computer, in 1952, thefirm devoted three years and agency representatives. Todetermine the designing the system. the insurance to training personnel and statUs of any policy at any time This System was designed andprogrammed to firm must maintain a record of manyfacts for premiumbilling, work long include such functions as each policy over many years. Paper accounting,dividendaccounting, insurance premium has been of great concern to life commission accounting, andvaluation of re- companies. The t.) pewriter, adding machine, applications have since been addressograph, and punched card equipment serves. Additional made, including agencyproduction and sta- merely speeded up a system established many tistics, policy loan accounting, managementre- presented for the first years ago. The computer ports,.and most phases of processing newappli- prin- time an entirely new and revolutionary cations for insurance, includingthe issuance ciple in data processing. The computerrequired records. punched-card .of the policies and necessary that we discard our manual and many.here- approach, reexamining the basic records that Franklin Life also now provides its policyowners, are essential forlife-insurance administration. tofore unavailable services for agency associates andHome Office depart- At this junction it should be noted that not include non- all department5 of a life insurance company mdrits. In the future-it also will medical underwriting, Iffireffifients ofall types are subjeet to automation.The Policyowners and general ledger accounting.The exact re- Service Department, for example, which an- simulated noW difficult to auto- sults of a new system can be swers correspondence, is pretty Other objec- mate. And interestingly, it is in areassuch as before it is -placed in operation. tives, including jnvestmentprocessing, will be this one that insurance firm employment rises converted within the next two or three years, with the increased volume of business brought but the main goal has beenaccomplished. The in by the computers. company. has provided asystem that gives The insurance industrY ranks among the faster and better service to policyownersand largest employers in the United States, em- agency associates andreduces adminiStrative ploying more than 885,000 people. More than half of these (470,000) are employed by life costs. companies. Total employment rose. approxi- The Company that Automation Helped Build mately 32 per cent between 1954 and 1964, had in force with Most of the increase occurring in-- the Since 1952, when Franklin Life approximately 400,000 policies totaling,about first five years. $1billion of insurance, the companyhas A Computer Pioneer grown to its presentsize of more than 950,000 Insurance companies were among the first policies totaling more than$6,330,000,000 of business firms to use electronic computers. insurance, bringing an annualpremium income Franklin Life was one of the pioneers in this exceeding $130 million. It is expected toreach field. This 'company signed the first commercial $1 billion in assets before the endof this year contract for a Univac computer system on (1966). June 10, 1952; itinstalled the first optical The Home Office employees,numbering 772 scanning system recording directly to magnetic in 1952, now total more than11,150, including tape in November, 1962. clerical, technical, administrative, andcustodial Why did Franklin Life consider automation personnel. absorb this essential? The company has been able to growth because of its use of computers. The old manual 'and punched-card system had served the company's purpose well, up to Univac Was Only the Beginning this point, but it was thought that life insurance in general would not be able to keep up with The Franklin Life InsuranceCompany in-

62 CiV skilled jabs. The in 4955. The Arm now technicians, and other higher Stalled its first Univac EDP department computeh, three 600 line-a- occupational make-up of an ha four Univac includes 37 per cent inputpersonnel; 22 per minute high speedprinters, one optical scanner, clerical workers; 22 percent which are similar toelectric cent supporting and 24 Unitypers; and programmers;14.5 per typewriters but typedirectly onto magnetic systems analysts cent computerand equipment operators;four tape. This installationof Unitypers is thelarg- per centsupervisory, and 0.5 per centmain- est in the United-States and one of thefew tenance engineers. of itq kind anywhere. Departments have been made. The company The Accounting Changes are still being more drasticallyaffected by EDP thanother is now installing a largescale Univac HI, and transition of FranklinLife to it will install a small areas. In the before the end of 1966 automation five entiredepartments and four which will eventually scale 1004 Model III, sections within others wereeliminated. At the four computers. replace three of the present same timethe new Data ProcessingDepart- Within the next six monthsall the Unitypers sections in other existing paper-tape machines. ment and four new will be replaced with departments were created. Franklin Life is uniquein that it has its own staff of electronic engineersand technicians to EDP Boosts Salaries maintain this equipment,which operates 24 The average monthlysalary in those job hours a day. categories affected hasincreased from $200.68 in 1965, an increaseof Automation Comes to theEmployees in 1955 to $406.39 103 per cent. Ofthis higher total, however, From the very beginning ofthe automation $52.78 was because ofnormal wage adjust- process, employees wereassured that the com- merits that would have occurred anyway.There puter system wouldreduce repetitive and mo- was a realwage increase of $152.39, or77 per notonous daily tasks,permitting continued ex- cent, directlyattributable to EDP. pansion without greatlyincreasing the number In 1955, prior toconversion, 330 employees given that no em- of employees. Assurance was in the AccountingDepartments billed and com- ployee doing a good jobwould be released. pletely serviced more than2,293,000 items, an These promises have beenkept. Management average of 6,948 peremployee. In 1965, fol- felt that it was essential notonly to find-new lowing conversion, 424employees billed and jobsto which re-locatedindividuals would serviced more than4,100,000 items, an av- adapt themselves, but alsojobs in which they erage of 9,670 peremployee or a 40-per-cent would find job satisfaction.The Company's increase over 1955, includingthe absorption goal has been to eliminatejobs at the lower of other functions. Ifthe Company had not level and to give presentemployees the oppor- converted to EDP, theAccounting Depart- tunity to qualify for those jobscreated by the ments today wouldrequire well over 600 em- new system. ployees and additionalequipment to process the increased number ofitems now handled. The Best Trainer of HighSchool Graduates EDP Beginning in 1957 hiring standards werein- A Decade's Worth of creased. More than any otherindustry, the One of the benefits notedby Franklin Life insurance industry can train alert,high school in its actual experiencewith EDP has been graduates to become valuableemployees over the release of more than25,000 square feet of a period of yearsby learning data processing valuable office space. TheCompany anticipates releasing another 10,000 squarefeet by early skills. automation was that The elimination of manylower-level jobs 1968. A related result of the Company was able todefer building its new such as junior clerks and fileclerks has resulted four-and-a-half-million-dollar buildingfrom in a percentage increase ofclerks, senior clerks, newly created EDP 1957 to 1963. and supervisorsplus the benefits too. analysts, computer There have been other EDP programmers, EDP systems commissions has operational people, electronicengineers and The payment of first-year ,. 63 been transferred from 10 regional offices to earlier represents what the employees and ma- the Home Office. All collections have been chines are doing, individual productivity may centralized in the Home Office; 12 collection not be any greater or even as great asit was offices across the country have been closed. in 1955. All agency commissionsand this includes maintaining wellover 7,000 accounts and It's Easier in an insurance Office processing 300,000 individual commission en- For several reasons automation is easier to triesare now paid on a biweekly schedule, accomplish in an organization such as a life compared to monthly payments under the old insurance company than in factory or ober system. industrial operation: In a recent survey of its departments the 1. Office employees in general identify them- Company has found that control of transactions selves with management, and communication is much closer by computer. The error ratio is easier. has been reduced from less than one per cent to less than 1/10 of one per cent. 2. Employees in an office Will participate Franklin Life, with automation, is now per- in the conversion to a greater extent andrather forming services for policyowners and agency enjoy, or, at least, be stimulated by the extra associates. Using the computer, policies are effort required. now issued with completeflexibility and accuracy not possible under the old manual sys- 3. The jobs eliminated are really those that tem. Similarly, correspondence now can be no orte wanted to do anyway; the onesleft or answered faster and more accurately. created are generally more desirable. While the computer has almost eliminated decision-making in routine jobs, more than 70 What is Ahead in Employment per cent of the supervisory jobs nowhave a It would appear on the basis of this Com- greater number and variety of responsibilities pany's experience that employment in occupa- for the individual. All surviving middle man- tions directly related to EDP and _management agerial responsibilities have increased 100 per willincrease and that employment of key cent. punch operators and tabulating machine operators will decline within the next five years. The Computer's More Understandable Policies The lamest 2roupgeneral clerical workers Premium rates in this same period have been will not disappear, but there will be fewer reduced over a period of years although this opportunities for jobs as file clerks and junior is related 'to investments and mortality as well clerks. The life insurance industry, as such, as to automation. And policies issued today on will be able to absorb less of the labor market the computer are more understandable to the in the next 10 years because insurance jobs general public. have been upgraded. Top management jobs also will require more skill. Those who aspire But ...Everybody Waits for the Computer for such positions in the future are going to Despite all these advantages itis unrealistic have to be computer oriented. to think that automation can do no wrong. As the volume increases, there is less Ilexi- Fewer in the Office, More on the Road bilityto handle exceptions; automationbe- The development of data transmission sys- comes more costly. Everything in an integrated terns and fast random access computer mem- computer system must conform to the com- ories will result in greater use of "real time" puter schedule for action such as mailing of processing. premium notices, agent's reminder notices, and The overall result of such changes will be a dividend checks. All policies are now issued by 5- to 10-per-cent-slower rise in life insurance computer on the night shift once a day, where:7, office employment in the next 10 years, com- as "rush" policies formerly could be prepared, pared to the rise in the past 10 years which if necessary, in a matter of a -few hours. was 32 per cent. The sales force, however, will Also, while the production of figures noted continue to grow with increasing business.

64 MAKING A COMPANY POSSIBLE

Automation is Always Beginning mation staff has grownfrom 25 people in 1958 to approximately 200today. The acute blood, shortage of trained personnelin this field made -Converting to a computer is a real Company to turn to its own sweat and tears operation,"says Joseph W. it necessary for the of the organization for talent, and toundertake an Glynn, vice president and comptroller effort. Moreover, Continental Assurance ComPliny. "Some of ambitious and costly training through this blood, sweat this early entry into thefield of automation us who have been industries to re- people think you can tempted companies in other and tears find that other the ranks of Con- walk into a computer roon:1 turn aswitch, and cruit EDP personnel from certainly not tinental Assurance. As aresult, Continental everything becomes Jovely. This is salary structure to true. It takes many yearsof hard work and has constantly upgraded its meet competition inall industries. training." overestimate the de- Company, with At first it was easy to The Continental Assurance education an individual headquarters in Chicqgo, has more than gree of specialized required for EDP work.Continental soon dis- $11,000,000,000 in force with $1,000,000,000 mathematics was not insurance in covered that a major in in assets. The Company writes facf, EDP work opened a all states and in Canada. Continentarconducted a prerequisite. In whole new field of opportunity tohigh school a computerfeasibility study in 1957 when it could araduates who wouldotherwise have found realized that manual processing methods limited by the no longer keep pacewith the growth of the their career potential severely lack of a college degree. Atthe same time, au- operations. This was the earliest stage of com- employee new puter applications to insurance. TheCompany tomation afforded the female A and improved opportunities.Most of the better then had roughly $5,000,000,000 in force. data ,handling large part of the activity of any insurance car- jobs in manual or mechanical formerly had been filled by maleernployees. rier consists of the recording, storage, retrieval, of the positions rapidly Today, women occupy many and processing of information. Unless a earlier jobs. expanding company takes advantage of every that have supplanted those the employee's information, the burden During the initial phase of means to process this apprenticeship, the cast to the companyfor and expense of paper work becomesinsup- the training and developmentis quite sizeable. portable. A study published by the Bureau of individual spends 15 Labor Statistics clearly reflects this pressure to In the first six weeks, the hours each Week in study, on companytime, automate. away from the computercenter. After training, By early 1963, companies accounting for college graduate tends to ad- four-fifths of insurance carrier employment a high school or vance rapidly in salaryand grade, on the basis had installed computers. Companies accounting application. A career for another five per .cent of employment had of examinations and job development program, aimed atequipping the ordered EDP or were using service bureaus. responsibil- Since rates'and mortality experience are sim- employee for future management ities, is open to all members ofthe automation ilar for most life insurance companies, a com- tuition to pany's ability to compete owes much tothe staff. The Company also reimburses employees who have successfullypassed ap- quality of service it can provide. proved courses taken at accreditedcolleges Expansion Demands Training and universities for collegecredit. In fact, the To the original IBM 705 computerwhich Company pays tuition and costs for all courses industry. Continentalinstalledin1958,successively that are related to the insurance invest heavily newer models,ehe 1401 and 1410's, have been The insurance industry cannot added. An IBM 50 system, commonly, referred in on-the-job training to meet therequirements to as the third generation computer,has re- of jobs created by automation andthen offer people cently been installed. this training to large numbers of young As EDP operations have expanded, the auto- who are interested only in temporaryemploy-

'65 it has Avithout ment. To an increasing extent,educational in- ance could not 'have grown as stitutions will have to recoghize and .meet their the advantages of the computer.Electronic responsibility tp offer training in these skills. data processing eliminates the mostmonoto- If high schools can offer training inshorthand nous and drearyjobspositions which never during these days of mechanical dictation, then did pay well, and are not easilyfilled today.' surely they can make room in their curricula As for its employees, there are none.who for training in the basic skills of a rapidly 'have real reason to regret thepassing of the of- growing field such as office. automation. pre-computer days. The Insurance company ficeof that period was often a sceneof No Degree But Marketable drudgery, where people made tediouspen-and- The wide availability of EDP training wohld ink .entries on ledger cards, and injournals, benefit not only industry but also many young and then summarized their postings on adesk people who otherwise would have no corn- calculator. Many of them could expectlittle parable opportunities in career potential iind more than a lifetithe ofbeing tied to this sort earnings. Many programmers today, young of monotony at low wages. men with a highschool background and a Today's -upgraded employee learns a setOf logical mind, are earning more than their skills which are readily marketablein any counterparts with a college degree because business; he enjoys many promotion oppor- they have become so marketable. tunities. No one who recalls yesterday'swork- ing conditions could seriously doubt thatthe No Salary Savings insurance office is noW a vastly more interesting When an insurance coinpany first considers and attractive working environment. the transition to computers, thereis much discussion Of possible savings in clerical sal- No Displacement Here aries. During, the early years of transition, no Despite the Continental AssuranceCom- $2.5 such savings materialize. pany's annual outlay of approximately The. Continental Assurance Company has million for EDP equipment, space, and person- never released an employee as a directresult nel, it is not simply buying a packaged solntion of automation, yet the total workforce would to the burden of paper work. Its management be much 'larger in the absence of automation. is fOrced to learn and adapt to a complex and Present personnel needs exceed the supply of fast-changing new technology. ---mualified applicants for the jobs. Continental - TheCompany has not encountered such is- is involved in a never-ending and costly train- sues as the. displacement of.workers, or evi- mg program. Just to train a personwith no dence of loss of job satisfaction. previou`s EDP background for the first three In terms of job satisfaction, the clerks art years probably costs the firm$20,000. Yet more stimulated by their presentwork than insurance companies must contend with the by the rather routine jobs they held before problem of having their trained employees automation. Some housewives who formerly hired away by other firms. Trained employees just located premium -cards are now console are rarely lured from oneinsurance company operators. Many of them code very complex to another. They are usually proselyted by the things into tape. The File Department people hardware manufacturers or by other industries, are upgraded. They are toldwhat is going on or possibly by a small company thatis looking in automation. They know what the output foi: one man to head up its computer program. of a computer is. Years ago they would never Particularly in the case of certain types of EDP have known. They would look at a number personnel, competitive bidding for talent has and give you a file. raised salary offers to seemingly unrealistic The broader opportunities are not open only levels. to a select group of people with outstanding academic qualifications, as critics of automation Benefits Beyond Productivity have alleged. Instead, they offer a whole range 6iven the current state of the labor market of new career possibilities to the qualified indi- in Chicago and the changing- cost structure vidual with no college .training. of the insurance industry, Continental Assur- As for the actuary, his job is not threatened

66 -1

developments lie ahead. the contrary, the comput- Even more complex by the computer. On terminals in branch Actuarial Departmentwith In the future there will be er provides the the computer. There much research data it could nothave before. offices, direct on-line to will be terminals indepartments like Policy- Service or the ClaimDepartment Potential Problems holders' that the whereby an employee willsimply dial into the Itwould be ridiculous to suggest television tube the insurance telephone or use a cathode ray impact of office automation on typewriter that transmitsdata industry can never produceanything but de- or an electric to the computer andback to the department. sirable consequences forall of society. The No one can It is even feasible that agentsin the field could technological shift _is still young. communication with its implications, butthey will be have this kind of direct foresee all the computer. Some day nopremium notices far-reaching as the capacityand versatility of will go out. The insurance companywill mere- new equipmenteliminates present barriers to ly debit the policyholder'sbank account. wider application.

CQMPUTERS NEEDPEOPLE A Personnel Bulge atMidpoint tered gradually into electronicdata processing as punched-cardequIpmerit became more com- using a magnetic drum The search for efficiencythrough technologi- plex. By 1956, it was computer. -In 1958,when a feasibility study cal innovation didn'tbegin with the coining of indicated the Companycould make effective the term "automation."Some firms have been pursuing the goal for many years.Efficient use of amagnetic-tape data processing system, equipment have been a work was begun on systemdevelopment and office methods and At this time the supplyof goal, for example, of theState Farm Life In- program writing. firm office help in and aroundBloomington, Ill. surance Companysince 1929 when the But cards in was nicelymatched to existing demands. was established.It first used punched would need to in- 1932. Company growththroughout the years it was clear that the firm tohandle thecontinuing has called for more and moreemployeesand creaseefficiency more and fasterequipment. growth in the data processing area. vice president, The system undertakenthen was designed In this vein, Leslie Mikkelson, points and to accounting, of the StateFarm Life Insurance to reduce clerical work at many in data processing, speed completion and accuracyof management Company and a specialist elements of the older sys- describes the historical interestof his firm in reports. Substantial tem continueduntil mid- 1963, however.The technological progress. achieve this sys- State Farm Life sells participatinglife insur- time and dollar investment to representing the State tem has been greatlyunderestimated. The per- ance through agents reached a high Farm Insurance group ofcompanies. Insurance sonnel in the data-handling area point at that time, the lasthalf of 1963. in force now exceeds$4;000,000,000; about expected $90,000,000 in premium income was Hard Core and VariableEmployees 8,700 agents repre- for 1966. Approximately number of employees, both company- Direct employees totaling The sent State Farm Life. wide and in the data processing area,is well 663 on August 1,1966, are located at the Employment has and at 21 re- above pre-automation total. Bloomington (Ill.) home office increased 50 per cent in about10 years, while Continental United gional offices throughout the insurance in force has doubled. Canada. States and the Dominion of There is a core number ofworkers needed who would be required A Nicely Matched LaborSupply to run the computer, whether the Company had twobillion dollars In the years before1958 the Company en-

67 or four billion dollars of insurance in force. State Farm Life Insurance has not experi- If the Company had nOtgrown as it has, cler- enced loss of trained personnel to other or- ical employeesthe non-computeroperators ganizations as severely as the Chicago and %uld have showna degree of decrease. Springfield companies. Growth Outdistances Layoffs For the period January, 1958 through Jan- uary, 1966, the personnel rates of State Farm In 1967 a new third-generation electronic show a percentage shift away from -clerical data processing system will be installed which employees toward supervisoryand middle- will have increased capacity andnew areas of management. application. Transition into theseareas will Several causes lie behind the growth of the be gradual. State Farm does not envisionany possibility of substantially fewer employees. middle category. Company growth offsets automation layoffsat The absorption by the computer of repeti- State Farm. tive clerical tasks is one cause. There have been certain kinds of employ- The increase in skilled programmers and ment changes, however. analysts who tend to fall into the middle group, Data processing has hadsome changes in is another influence. the character of clerical jobsat State Farm. The continuing decentralizationofState For example, the most complex lifepolicy Farm into 21 regional offices, creating more record now requires almost three inches ofa units and more supervisors, is another cause. 2,400-foot reel of magnetic tape;an average record takes less than halfan inch. In the old No Corrections from the Mindless Machine system, finding, changing, and replacing the The computer definitely has influenced State cards in the several fileswas a tedious manual Farm employment,patterns. The importance of process performed by a specialist for a certain having good data put into the system has had type of card. Now a specialist ina certain type some bearing on upgrading of skills. It didn't of record change codesa message by which take long to learn that the "mindless machine" the computer findsthe record, makes the won't correct errors. changes and replaces thechangedrecord. There is another causative factor influencing Fewer clerks are needed per thousand changes, some shift into the middle group. The Person- but increased business has meant more thou- nel Department speaks of itas "Job Class sands of changes to be made. The Company Inflation." This is the tendency to place work- still can use a good proportion of employees ers into the job crass called for by the salary with no more skills thanwere available 20 years ago, using them in the preparation of needed to get them to join your staff. data for the computer, in the maintenance of Maybe Leaving the Wet Pen Was Worse files, and in the general correspondencearea. Fewer operators are required for thecom- Itis clear that there just is not enough help puter than for the older tabulating department available at any price to replace all automation with its many separate machines, butthe reduc-- in the life insurance industryto go back to tion is small, amountingto not more then 10 the quill pens, the scratch pad calculations. or 12 people. The change to the electronic computer prob- An area of employment growth is the pro- ably is not as shocking to the office worker gramming group. In pre-computer days, this of this generation as the old change from the department took part of one man's time; now "wet pen" to the punched cards about 20 it has 20 employees. years ago.

68 IT'S ALLCIRCUITRY ANDPAPER than a Bookkeeper them4 inter- Electronics is More and collegegraduates, and trains nally in its own system. the computer nowfills In- For Horace Mann, In the early stagesof the Horace Mann bookkeeping machineand management realizedthat to the function of a surance Group, has also replaced someof the routinejobs have an efficientaccounting and billing opera- policies, preparingpremium would need electrical ac- such as typing tion, the Company notices, and recordingpremium payments.As counting machines. Asthe volume ofousiness also has that to issue a concomitantadvantage the computer increased,it became apparent been able to providesophisticated management policies efficiently, preparepremium notices, - reports. and record premiumpayments, theCompany the would have to shiftits attention from Future Plans data bookkeeping type ofmachine to electronic What should HoraceMann expect ofthe processing computers. computer in thefuture? The Home Office staff, aswell as State offices able Computer and RetrieverMake a Team and Regional claimsoffices, should be Horace Mann Insurance to communicatedirectly with thecomputer. In 22 years, the portfolio, under one ac- Companies have grown tobe the largest teach- Producing a customer This ers' insurance groupin the world. Combined count number,should become feasible. equipment also willmake it possible toimple- assets exceed$60,000,000. system. This meansthat an Howard Fricke, a HoraceMann administra- ment a real time agent will beable to ascertain coverageimme- tor,discussed his firm'sautomation experi- diately, examine thepolicyholder's portfolio, ences. and make intelligent,sincere recommendations Horace Mann iscontrolled by, and devoted claims market is for additional coverages.It may permit to,the educationprofession.Its claims within a matterof their families. To this examiners to pay limited to teachers and enable policyholders toobtain offers all lines ofpersonal minutes. It may specialized market it loan in minutes. insurance such as life,accident and health, a policy auto insurance,homeowners, incomereplace- Microfilming for IntelligentCorrespondence ment, and teacherliability. Yet automation is notlimited to computers. Horace Mann recentlyhas purchased a new But Do the GrowthStatistics Mean Service recorergtrieval systemfrom Remington Rand, one-half years, the called Remstar. This systempermits automa- In the past three and numbers of paperfiles combined assets of theHorace Mann Insurance tion of voluminous from $20,000,000 to (correspondence and standardforms) that are Companies have grown At $60,000,000. During this samethree-and-one- not compatiblewith computer operation. Horace Mann employeecorre- half year period, however,the total number of present the has increased from 360 sponding with apolicyholder must obtainthe Home Office Personnel but While the Companieshave vir- status of thepolicy from the computer, to only 430. the policyholder's paper tually tripled in assetsand number of policies he also must review in force, the staff hasincreased only 25 per file so that he cancorrespond intelligently. have been lowered con- The Remstar systemmicrofilmsallthese cent. Expense ratios projects tinually during this sameperiod. paper files and,via closed-circut video, size on TV-like monitors. No one has beendisplaced by automation, this image in original demanded a dif- This innovation willpermit the Company to although the computer has its files. Policy status ferent type of worker for moretechnical, less completely consolidate all files will be consolidated onthe computer and routine jobs. The Companyhas its own train- the paper files will beconsolidated in micro- ing program in dataprocesSing, and it employs qualified high schoolstudents and graduates, film form.

69 WHERE STATISTICSRULE Automation, Yes, Ifit Produces Facts any more outof it than you put intoit. All the problems of theinsurance industry Data assembly in theinsurance industry is and the insurance regulatorcannot be solved in a stage of very rapiddevelopment, reported by the computer or theslide rule, as comfort- John Bolton, director of theState of Illinois ing as an assumption tothe contrary might be. Department of Insurance. The useof com- But decisions must startsomewhere, and in puters is growingmonth by month and year fact, they do indeed startwith the data from by year, and the use ofautomated statistics these computers and sliderules. is changing the patternsof statistics by which Considerable judgment in themaking of the insurance industry lives,and by which the rates is called for, bothfrom industry and from Department of Insuranceregulates the indus- the regulatory agency. try. insurance de- The insurance industry and Statistics Are Boss partments can bebenefited greatly by such The judg,ment of the directorof the Illinois automation, but only ifitis recognized that Department of Insurance must comefrom ,sta- computer-produced data does notin any way tisticsbasic, hard-nosed data.The, Illinois reduce the rigid requirementsof the Illinois specific and de- Insurance Department hasfelt that rate ad- Department of Insurance for justments over the past 10 yearshave been tailed statistics withinprescribed plans and fully justified by thestatistical presentations coding systems. on which the departmentdecisions were made. But the stresses of thissituation in the market- No Room for Falsies inAutomation place compel even higherstatistical standards. even last Statisticians have an expression,"Garbage in What was good enough last year or Garbage out." Or to put itanother way, a month must be even better nextmonth and computer is like a girl's sweateryoucan't get ' next year. There is noalternative.

Learning toLiveand Work With Automation

MAKE MORE, HIREMORE But FirstLet's Look at Technological Change Over the past three yearsthere has been a national increase in plant andequipment spend- In. manufac- New Equipment Means Growth ing of $25 billion, or 65 per cent. for new facilities "There is no longer any doubtthat techno- turing alone, the spending of plant and has doubled, from $14 billionin 1963 to $28 logical change, expressed in terms Illinois have en- employment," billion in 1966. Chicago and equipment spending, increases proportional share of states John M. Coulter,associate director of re- joyed more than their search and statistics, ChicagoAssociation of new plants andequipment. The heavy spending of thelast triennium has Commerce and Industry.

70 i been good for employment. Private wage and Suggested Curriculum salary workers have increased by 5,600,000 Employers suggest as an alternative to pres- during this same three-year period, or between ent vocational high schoolcurricula, -more in- 13 and 14 per cent of their total in 1963.In tensive work with the three R's, and coursesin terms of unit economics andexpenditure, general vocational disciplines, such.asblueprint , $4,000 to $5,000 in new plant and equipment reading, typing, and electrical wiring. will put one additional worker to work on Another method that has worked out very payroils of private industry. well has been a work programinvolving the Despite the massive increase in employment, school and a company, through whichthe stu- new equipment and machineryhave posed dents observe how the machineryis used, and some serious manpowerproblems for com- then, perhaps, use it in some limitedsituation. merce and industry. On-Job Training Lags, Too Can the Schools Prepare People? If schools are becoming ananachronism as Private enterprise is dissatisfied with the av- training institutions, commerce andindustry are erage products of our publiceducation system. lagging in their adoption of formal entrance Forty representatives of industry (mostly per- training jobs. sonnel directors) last year testified to thisdis- A recent survey of the ChicagoAssociation satisfaction. The general complaint was that of Commerce and Industry on thewhole range literacy and mathematical skills are much too of employment subjects indicatesthat although low for most jobs. on-the-job training has become asignificant in- Products of public high schools and voca- stitution in recent years, it still representsonly tional high schools may be as good as they were five to 10 per cent of the, existingjob openings 10 or 15 years ago, but modern industryplaces in the area. a much more serious demand onlearning, ev,en basic learning in the, areas" of reading, writing ChicagoBig in Technological Change and arithmetic, and a much greater demand Despite problems of manpowerpreparation, protec- on special skills than is nowbeing turned Out the employment boom rolls 'along. The rests by the vocational high schools. tionagainst automated unemployment with markets for new goods andservices. Untraining the Vocational Graduates The State of Illinois has beenblessed, during The employers' outlook for vocational high the last three years, with an employmentboom school education is gloomy. They object to .which has outstripped the larger boomthrough- training in machine operation with machines out the United States. Someof this has occurred that will not be duplicated anywhere inindus- because of overall marketingconsiderations. try. It would be a logical step formanufactur- Chicago and Illinois are the largestmanufactur- ing companies to supply vocational schools ing areas of producer durablestheproducts with current equipment so that students could which go into new plants andequipmentin be trained to operate them, but modern ma- the entire country. chinery might runbetween $100,000 and In 1963, for example, Chicagoproduced $1,000,000 per unit, and this is a lot for any some $6.5 billion in termsof value added by company to give away. manufacture of producer durables,compared The general comment, "We have to untrain to $6 billion produced inthe 17-county New graduates of vocational high schools before we York Metropolitan area, whichincludes half can begin to train them on ourmachines," is the State of New Jersey. Part of this output was too common to be ignored. the machinery and equipment usedby the na-

The accompanying chapter consists of abstractions ofthe testimony presented by thewitnesses appearing before the Hearings on Vocational Educationand Manpower Training Programs in Relation to Employment Requirements inIndustry conducted October 20 and 21,1966, by the State of Illinois Commission onAutomation and Technological Progress. Thetestimony was presented in RoomsM-18 and M-11, Drake Hotel, Chicago,Ill.60611. NOTE: See Appendix for the list of witnesses.

71 giving a little forecast of whatthe employment tion in producing technological change. particularly. Chicago and Illinois are not behindin their needs will be in manufacturing growth. Expenditures for own technological No ReportEvenfor the Governor Chicago new plant and equipment within the The purpose of this surveyand of the analy- area top those in everyother metropolitan the effect of tech- 1963, for manufacturing sis would be to determine area from 1954 to nological change, as representedby expendi- firms, with a total of $6.4 billionin Chicago employment, York, the nearest tures on plant and equipment; on and $5.8 billion in New both production workers andothers; and on competitor. productivity. Such a surveycould point out in- But Beware of Unemployment dustries which have not investedin plant and beginning to Successful as Chicago and Illinois havebeen, equipment at a brisk rate and are economically, during the last three years,this feelthe competitivesqueeze. Obsolescence employment and overall success has been a compositeof unpar- could be identified as both annual survey alleled success in some industries andunfortu- profit softened. Coupled with an of manufacturers in this State,such an analysis nate failure in others. need for new There is an urgent need for a seriousstudy could calculate realistically the and analysis of available statisticsfor manufac- employees in future years. techno- turing employment, plant and equipmentspend- No regular report which measures needs in ing, and profit as measured byvalue added to logical trends and predicts employment this State is now available to theGovernor, or manufacturers. of the State of Illi- These figures are available-in U.S. Depart- to any of the departments about a year nois that might need it. ment of Commerce publications prepared to and a half after the fact. Butnothing is being Private business associations are using the pro- done to work them over, to make somesimple conduct this kind of program, staff that calculations and to draw some necessary con- fessional skill and the professional clusions at the present time on a regularbasis. they have accumulated over years. for the Chi- An annual survey of Illinoismanufacturers If it were deemed inappropriate determine the manu- cago Association ofCommerce and Industry or is also recommended, to do facturers' plant and equipment spendingplans, perhaps a combination of associations to employment, and this, the survey and analysismight be con- their plans for increases in the State their basic requirement8 for newemployees. In- ducted under the auspices of either the Depart- vestment in plant and equipmentusually pre- Department of Labor or, possibly, cedes an employment spurt by a year ortwo, ment of Business andEconomic Development.

THERE'S NEW WORK TO DO Tomorrow's Education is Today's Biggest Job Purpose: Occupational Training The primary purpose of theDivision of Vo- change cational and Technical Educationof the State "It's not all money; it's trying to Rehabilita- people's attitudes into a belief that workis no- Board of Vocational Education and tion is to develop occupationaltraining that ble." the work These words describe the goal behind voca- will assist youths and adults to enter occupations that do tional and technical education, in theopinion force of the State in those degree. of John Beaumont, Director ofthe Division not reqUire a baccalaureate A second purpose is to assistemployed per- of Vocational and TechnicalEducation of the training to help them meet new Board of Vocational Education andRehabilita- sons in getting occupational requirements or getbetter jobs. tion, State of Illinois. I A

I This responsibility is carried outunde.r' the 210, passed by the U. S. Congress.Served 152,- direction of the State Board of VocationalEdu- 000 persons in fiscal 1966. Occupa- cation and Rehabilitation, which iscomposed 2. Vocational Education in Special of the superintendent of publicinstruction, who tional AreasGrants to states and territories to than serves as executive officer, and11 members ap- help them support vocational training (less home pointed by the Governor. college grade) in the fields of agriculture, Currently, the Board consists of the directors economics, practical nursing, trades and indus- of Agriculture, Labor, Public Health,Mental try, distributive occupations,fishery, technical Health, and Registration and Education, andsix education and related occupations, such as public members. The Board takes an active role skilled technicians. Authorized by theNational Smith- in setting policy and reviewing activitiesof the Defense Education Act of 1958, the Division. It meets every other month; in the Hughes Act, the George-Barden Act, and sup- intervening month, a Vocational Education plementary acts. Total served is includedwith Committee of the Board meets to review,in the total of 152,000 served by VocationalEdu- depth, the plans and functions of theDivision. cation Grants. Through grant-in-aid funds provided by Fed- 3. Vocational Education Work-StudyPro- eral and State legislation, occupationaltraining gramsGrants for work-study plans. These is conducted in secondary schools,junior col- grants cover compensation ofstudents em- leges, technical institutes, and in specialdivi- ployed in local agencies or some other public sions of institutions of higher education. agency or institution to allow them tocontinue Grant-in-aid funds are also used for construc- vocational education. Authorized by the Voca- tion, equipment, teacher education, supervision, tional Education Act of 1963. Served 6,619 stu- administration, research, experimentation and dents in 1966. other related activities. 4. Vocational Education Research Grants The functions of the Division are performed An Occupational Research and Development. by a staff of professionals located in Spring- Unit for the State of Illinojs, funded in June, field and Chicago. These functions include: 1965 for an 18-month period. Theproposal Consulting with educational agencies to added staff, an advisory committee, a leadership help them plan and implement occupational workshop, a research competency workshop, curricula, which are in keeping with the occu- and a basic study of occupational needsfor pational needs of the State, as determined by Illinois in the decade ahead. Authorized by Sec- the State Department of Labor and other infor- tion 4 (c) of the Vocational Education Actof mative sources. 1963. Assisting schools to develop occupational 5. A Manpower Development and Training curricula which meet all levels of abilities, to ProgramOperated cooperatively with the Bu- help those with less ability to find employment. reau of Employment Security of theIllinois De- Helping to assure that grant-in-aid funds partment of Labor. The Bureau of Employment are used in abcordance withthe provisions of Security determines the occupation for which Federal and State legislation. training is to be given and selects the trainees. Responsibilities of the Division The Division of Vocational and Technical The Division of Vocational and Technical Education arranges for the training which is Education of the Board of Vocational Educa- condated in both public and private schools. tion and Rehabilitation is responsible for the Authorized by the Manpower Development and administration of the following vocational and Training Act of 1962, as amended; Public Law 89-15. Served 8,151 trainees in fiscal 1966. technical education programs: 1. Vocational Education GrantsGrants to 6. State AppropriationsAppropriated as a schools to supplement State and local funds biennium appropriation and payable from the used under approved State plan forvocational general revenue fund. Include $9,716,000.00 education, including construction of vocational for distribution to public schools for approved education facilities and related services and ac- programs in vocational and technicalsubjects tivities. Authorized by the United States Voca- and to State educational institutionsoffering tional Education Act of 1963, Public Law 88- approved teacher-training courses.

73 What Research Prophesies MetalworkingWill be affected by innovations, the most important of which is nu- A research project conducted for the Division merical control. This development willnot of Vocational and Technical Education is evi- obsolete present high school or technical school dence of the efforts of the Division to discover machine shop facilities; experience and skill occupations that should receive major emphasis gained in high school courses will be appli- in Illinois. This project reviewed 10 areas of cable. Illinois industry, as follows: Primary Metals industryWill grow be- Office industry OccupationsTotal industry employment will rise nearly four per cent tween two and three times the national average a year during the next decade. Many office because of rapidly expanding Midwest steel occupations with a prerequisite technical back- markets. Technological change will create some ground will emerge, including technical secre- new occupations, change many others. tary, medical secretary, engineer's aide, and Health ServicesIn the technical and semi- .. archive and library specialists. technical categories should double during the next decade. The impact of medical electronics Suggested Curricula has helped to create new occupations and expand still others within the industry. Four core curricula have been identified to Printing and PublishingSales are expect- prepare students and workers for the new oc- ed to grow at an annual rate of four to five per cupations in the chemical and food industries, cent. Growth will be offset by increases in man- electronics, the mechanical industries, and the power productivity, and so additions to the la- health services. bor force will be small. Pro,blem-solving skills The Board of Vocational Education and Re- will replace trial and error techniques in type- habilitationis moving rapidly into the junior setting. Trend towards color work and offset college program as a vehicle for developing this equipmentwillmake chemical background kind of -occupational training. mandatory for an increased number of em- The .Professions Need Aides ployees. Electronics and Electrical Equipnzent The junior college development in Illinois Will grow faster than any other sector except today is an exciting program. .In the past the health services; annual rate of four per cent or State has not had the institutions to do the job more can be expected. Minimum-technology the junior college can do. It has had the univer- electronics jobs require less than one year of sities and it has had the secondary schools, but post-secondary training,if high school back- some fields such as medical technology are nei- ground is adequate. ther university nor secondary school subjects. Agri-Business EnzploynzentinOfi-Farnz If the junior college becomes a community in- OccupationsEmploymentincreasing,while stitutionthatserves community and State on-farm employment is decreasing. needs, such technical training can be begun. If Tood ProcessingModest sales and pro- the junior colleges can make it clear to the ductivity increase overall, but the frozen and young people that the professions need aides, convenience foods sectors will grow nearly 10 they can move a great deal further forward. per cent a year; will need graduates qualified for quality control, commercial home econom- Cooperation at the Secondaey School Level ics, and process controls maintenance occupa- The Board is also attempting to bring about tions. Bakery firms will need workers, techni- cooperation between secondary school systems. cians for making food tests. It is urging high schools in the same area of the Chemical Process PlantsWill experience State to join together in building a facility for process automation and instrumentation,in- vocational training. creasing manpower productivity as rapidly as One of the.first of these cooperative ventures sales. Ceramics, plastics, and adhesives plant is out at Sterling, where there is now under con- employment will rise significantly; automation struction a facility that will serve initially all and instrumentation will increase needed op- of Whiteside County, about eight or nine high erating and maintenance skills. schools.

74 understanding of all of us. in operation and in the ideas, the Seven cooperative programs are Board put $3 millionof Ster- Last year the State at the presenttime. Besides the school at construction of the secon- Wau- Federal funds into ling there is one atEast Moline; one at previously. Vernon; one at Decatur; one day level areafacilities mentioned kegan; one at Mt. is trying to helpthe seven and one in the Cityof Chicago. This year, the Board at Springfield; junior colleges thathave been fundedfor con- The State is helpingthe City of Chicago to struction. These areChicago, Blackhawk,Sauk build the WestinghouseSchool. Although itis and Valley, Triton,Palatine, Rock Valley, still under construction,it is already in opera- Rockford. tion. Students are enrolled. there is quite anempha- planned to offer a wide At the present time These schools are data processingequipment dealing in machinetools, sis in training for range of programs, installations in theexisting junior electronics, office work,health work, the graph- and computer colleges and in theState's one vocationalinsti- arts,auto mechanics,body and fender ic tute, VocationalTechnical Institute,operated work, and child day care.The women who University, at Carbondale. basic education bringtheir children by Southern Illinois come in for During 1965-66these schools trained2,667 along, and those chlidren areused in the school males and 699 females asprogrammersin data not as guineapigs, but as a vehicle totrain other youngsters towork in child day care processing. work. Education NeedsLeadership this kind of coopera- The difference between The Division ofVocational andTechnical tive technical schooland already existingfa- been organized to serve High School or Education itself has cilitieslike Lane Technical teachers and teacherneeds. It has beenstaffed is that this is a school Washburne Trade School primarily with expertteachers as a teacher con- designed for youngsterswho will not go any sultation agency, not as aplanning and admin- farther than high school. istrative unit. It has nothad, historically,the the secondary schools Another program for kind of personnelwho could assumeleader- is that of training indata processing. Anexperi- But the need forlead- Evanston Township High ship and plan effectively. mental program at ership is becoming apparent,and reorganiza- by the Division andby A plan- School, to be financed tion within theDivision is taking place. was,approved last spring(1966). local industry, ning and evaluationunit has been set up.A fis- level, on-the-job trainingis At the secondary cal and statisticalunit has beenestablished. probably one of the mosteffective ways to do Vocational Educationand Re- training job. Half a dayof The Board of an occupational habilitation conductsinformal monthly meet- the job combines High- schooling and half a day on ings with representativesof the Board of which these youngsters Board, and the education with work, er Education,the Junior College need. Office of theSuperintendent of PublicInstruc- organization Makes Jobs tion. But there is aneed for an Automation Ends Work, only education, butla- between the training that will represent not There is a broad gap public aid, and otheragencies. and projected develop- bor and welfare, the State now provides kind of manpowerdevelop- We have not really come to The need for some ments in industry. commission in the Statehas been in the work force which ment resource grips with the change suggested to the State'sTask Force on Educa- is taking place in oursociety. tion, and is includedin its report. A report ontechnology in the American eliminates economy statesthat automation Making the TrainingFit the Need work and creates jobs. Butmost of us have not Education and Re- first point in our understand- The Board of Vocational gotten beyond the habilitation is trying tocoordinate its training ing of automation. Werealize that automation programs withthe occupations nowavailable. eliminates work, but wehaven't come to grips It has put priority onhealth occupations and with the significant pointthat automation cre- kinds of jobs. technical occupations. ates jobs, different The lag between needsand training has not Training for the futurerequires changes in been caused by lackof equipment or byobso- legislation, school boards,parents, students,

75 lete equipment.It has been caused by the to get some leadership. It should be able to ex- schools' lack of awareness of the emerging change personnel with the universities. At the needs of industry, and by the lack of schools moment the Division cannot meet the salary themselves. schedule of the university people, but it could It is true that large numbers of students are bring in consultants from the universities. still being trained for jobs which will become obsolete, but this is for lack of an alternative Believing that Work is Noble program. You can't really deny students courses Funds are necessary to start and equip train- in home economics and agriculture unless you ing schools. Yet it's not all a question of mon- are willing to give them some alternative. ey. It's also a matter of helping people under- Progress has been made in this direction. It stand that work is noble, whether the worker could be speeded up if the Division of Voca- has a college education or a junior college tional and Technical Education had the funds education or a high school education.

TAKING THE TRAINING TO THE PEOPLE Washington Must Let Springfield Know How gram and increased benefits for trainees. Dur- ing this time, employment had improved for "Many Americans," says Allen Brimm, "par- the general public, but high rates of unemploy- ticularly those for whom poverty, limited edu- ment persisted for many worker groups, includ- cation, and waste of human resources are hand- ing youth, minority groups, older workers, the me-downs from generation .to generation, are uneducated add the unskilled. now gaining new hopes, new skills, and new Since the passage of amendments to the jobs." Manpower Development and Training Act in Why is this true? 1963, manpower training programs have been It is the result of the training these people structured to provide basic educational skills, have been given under the Manpower Develop- pre-vocational,education-al and occupational ment and Training Act (MDTA), according to training. The 1965 amendments to the Act in- Mr. Brimm, who is chief of Manpower Training creased the length of training and extended ben- for the Illinois Department of Labor. This efits to trainees. During the first four years of training also has met, at least in part, the needs actual MDTA program operations more than of the nation's employers. 490,000 persons across the nation were approved for institutional training. About 8,600 How this Progress .Began projects were developed and approved in 50 The Manpower Development and Training states, the District of Columbia, Puerto Rico, Act was passed by the 87th Congress early in Guam, and the Virgin Islands. 1962, at a time when rates of unemployment were high, the size of the labor force was in- Administration: Washington to Springfield creasing, the impact of technological change Training under the Manpower Development was being felt, and skilled and semi-skilled jobs and Training Act provides for institutional and were going begging for want of experienced or on-the-job training for unemplOed and undertrained personnel. employed youths and adults in the facilities of At the onset, the manpower training program either public or private vocational or technical was designed to train individuals for these cur- schools. rent job openings. And it was a program to help Funds are administered by both the Secre- fill the requirements of employers immediately tary of Labor and the Secretary of Health, or within one year. Amendments to the Act, in Education, and Welfare. 1963 and 1965, enlarged the scope of the pro- These appropriations are intended to provide .

76 two types of funding. The Departmentof La- created as a result of technologicalchange, bor and its state counterparts, which inIllinois such as electronics technicians, programmers, is the Bureau of Employment Security, must and systems testing laboratory technicians. identify the need for training. The Bureau, Who Are the Trainees? which consists of the Illinois State Employment Training in Illinois has been given practically Service and the Division of Unemployment in every geographical area, both ruraland ur- Compensation at the State's Department of La- the ban. Seventy per cent of the training programs bor, initiates the program by documenting have been in Chicago; the East St. Louis area need for training and the availability oftrain- leads among the Downstate areas. ee3, and then transmittingthis information to enrolled Secre- About 55 p.er cent of the trainees the State of Illinois counterpart of the from September, 1962 through June 30,1966 tary of Health, Education, andWelfare. In were male. Illinois this is the Division of Vocational Re- Illinois non-white participation in MDTA oc- habilitation. This Division acts upon the Bu- cupational training was about daublcihe na- reau's indication of need to arrange for the ac- tional average. In Illinois, approximately59 tual training to be given. per cent of trainees werenon-white. The na- The State Board of Vocational Education ar- tional average was estimated to be from 29 to ranges for institutional training,usually work- 30 per cent of the total. ing through local vocational education depart- Approximately 20 per cent of the men and ments of public schools. If necessary,they uti- women enrolled in training inIllinois were Pub- lize private schools, both vocational and techni- lic Aid recipients. More than 47 per cent had cal, to provide the necessary training. been unemployed for 15 weeks or more,and The Bureau of Apprenticeship and Training 12.7 per cent were underemployedthatis, of the United States Department of Labor par- working less than full time, working belowtheir ticipates when on-the-job training is the method potential, or soon to be automated out of their of providing the training. jobs. The Act provided for one-hundred-per-cent Since inadequate education has been asso- Federal financing for training costs and train- ciated with unemployment, the Manpower De- ing allowances to July 1 of 1966. Subsequent to velopment Training program has attc.mpted to that date, the State must provide for 10 per cent reach as many educationally disadvantaged job matching of institutional training costs. Match- seekers as possible. More than 55 per cent of ing may be in cash or in kind. In-kind matching the trainees enrolled have less than high school is acceptable for training conducted in public education; 42.6 per cent have nine to eleven schools; cash is required to cover training in years of schooling. private institutions. Reflecting the increased emphasis on initiat- The 74th Legislative Biennium provided for ing training programs for youth, the participa- $1,036,000.00 for this pur- an appropriation of tion of younger groups (under 19 years or 19- pose, to cover the fiscal yearsJuly 1, 1966 to June 30, 1967 and July 1, 1967 to June 30, 21 years of age) was well above, their proportion of the unemployed. Participation of the 1968. prime age group, 22 to 44, also is greater than Sixty Skills its percentage of the total unemployed in the As of October, 1966, 11,486 have completed economy. training. Within one month following comple- At the same time, itis difficult to involve tion of training, 70 per cent had found employ- older workers, 45 years of age and older, in ment and were still employed. training, apparently because of their reluctance From the beginning, Illinois has been among to undertake training; because of theirlower the leading states in the number of trainees ap- level of formal education, lower degrees of job proved for and enrolled in training. It now mobility, difficulties in meeting present-day re- ranks third in the nation, surpassed only by quirements; and because of employers' restric- California and New York. tive hiring specifications. In Illinois, only 7.6 Training has been given in 60 different occu- per cent of this group has beenenrolled in pations,including severalnew occupations MDT training programs, whereas persons in

77 this age bracket accounted for 25 per cent of towards the disadvantaged unemployedworker the nation's unemployment in 1965. in both the urban and rural areas, with40 per cent of the training to be directedtoward dis- The Funding of Fiscal'66 advantaged adults and 25 per cent towarddis- A total of$15,152,604 was allocated to Illi- advantaged youths, leaving only 35 per centof nois to cover the training costs and the pay- the training for skill occupations. ment of training allowances for 7,974 trainees The Manpower Development TrainingAct, in 110 different projects in fiscal year 1966. therefore, will not be able to meet therequire- (Actually a total of 12,000 persons were en- ments of employers in Illinoisbecause of this rolled in training programs during fiscal year shift of emphasis toWards training thedisad- 1966, but this total included trainees whose vantaged. work was financed by funds made available from fiscal 1965.) Meeting One-Third of the Need The Manpower Development TrainingAct Institutional Training Plans for 1967 requires that training must be orientedtoward Infiscal year 1967, the State estimates that recognized employment opportunities;

78 realize that the kind of so-called well-qualified, require exceptional assistance to become em- well-educated people that they want just aren't ployable, reemployed, and self-supportingciti- available. These people are all working. zens. The only people left in the labor market to- Paying the Cost of Training day, who are unemployed, are the people who train- don't have the education, who don't have the Up to fiscal 1967 the cost of MDTA financed. skills, who don't have the motivation. ing has been 100 per-cent Federally Training is provided without cost totrainees, "Project 3000" and they may receive a training allowanceof Until the Manpower Development and Train- $44.00 a week. This may be augmented to ing Act Amendments of 1965. training was $74.00 a week, depending on the size of the limited to a 52-week period. Since this period trainee's family. Youths between the ages of17 has been expanded it has been possible to put and 22 who do not qualify for theselarger al- into effect a number of training programs pri- lowances may still receive $20.00 a weekin marily oriented to the disadvantaged. allowances if they are high school graduates In the Chicago area, the Illinois Department or have been out of school one yearand are en- of Labor established a program known asProj- rolled in a special youth MDTA project. ect 3000, for the benefit of 3.000 hard coredis- For on-the-job training programs,the em- advantaged persons. Actually, 2,375 people ployer pays the trainee while he is intraining were phased in during fiscal1966; roughly with the employer. 1,000 have finished training; 80 per cent have Since July 1, 1966, states have been required been placed in jobs. to match Federal funds for training costsat the This is a multi-occupational training project, ratio of 90 per cent Federal and 10 per cent in which training was given for almost 40 dif- State funds. ferent occupations. The program was predomi- During the time that MDTA programs were nantly female, but about half of the women 100 per cent Federally financed, Illinois made were Public Aid recipients, and oneof the dif- fullutilization of these funds in developing ficulties MDTA has with female recipients, par- training programs. The 90-10 matching still ticularly ADC recipients, is 4iie lack of child- provides the most economical financial arrange- care provisions. If the City of.Chicago were to ment for the State. The trainingallowances are have sufficient child-care facilities, many of still 100 per cent Federally financed; theState these women would be able to take training and pays 10 per cent of training costsalone. also employment. Oddly enough, it is difficult to recruit males E Pluribus Unum for this program although the greatest place- There are approximately 10 different Fed- provisions. ment opportunities are for male trainees. eral acts which, provide training Each year the State is required to develop a Once They Come, They Finish plan indicating the scope of the training which The dropout rate for this proQram, between is to be developed. It is necessary that this plan 10 and 12 per cent, is unusually low. The aver- be developed in cooperation with the various age dropout rate in manpowertraining pro- agencies concerned with training: The Office grams runs 30 to 33 per cent. of Economic Opportunity; the Illinois Depart- This low dropout rate is the result of the ex- ment of Public Aid; the Department ofVoca- cellent teacher-training program developed at tional Education, and The Vocational Rehabili- the start of the project, to orient the teachers tation Service. This planning is necessary to in- to the adult studentwho is quitedifferent sure maxirrium utilization of Stateand Federal from the younger student these teachers en- funds, to avoid overlapping and duplication, counter in their grade- and high-school work. and to make the best use of training facilities. The experience of working in such programs. There is no overall coordination, however. Mr. Brimm states, suggests that the economic Guidelines are needed to permit cross-funding expansion of this country alone will not bring and pooling of funds, so that the State can use full participation in our affluence to the hard- its funds in the greatest possible way for the to-reach, high-unemployment group, those who training of unemployed persons.

79 Part of the answer is now working future training program. A task force in Washington coordinating committee,where proceduresforcoordinating may be a State on developing representatives of allagencies with training funding and fiscal problems aswell. Washing- funds could meet tomake the best alloctic q ton will have to letSprinffield know how it can of the available funds. be done, but coordinationis imperative for any

APPRENTICING FORAUTOMATION Come From? Where Do Craftsmen ing that there shall be nodiscrimination in any apprenticeship program inoperation anywhere in the country, and inthe Selective Service Development of SkilledCraftsmen who are being the Bureau of Ap- System, whereby apprentices Two witnesses represented trained are given anopportunity to stay out of prenticeship and Training ofthe U. S. Depart- the Service until theirtraining is completed. ment of Labor at thehearings, Thomas Augus- tine, regional director, andJoseph Sullivan, Illi- On-the-Job Training withMDTA Bureau. nois State Supervisor of the On-the-job training programs arethe one sure The purpose of the Bureausince 1937 has the job, and also the and register appren- way to get people on been to develop, promote, cheapest way. The Bureaudeals directly with ticeship programs to assurethat this type of manufacturers to create thejob enabling the managers and training will be of high quality, opportunities and to get jobsfor those people craftsmen, fully apprentices to become skilled disadvantaged. of their trade. who are unemployed and able to meet all of the demands The Chicago Committee onUrban Opportu- Apprenticeship is a type ofon-the-job train- Organization. the Chicago the job for two nity, the Woodlawn ing. An apprentice learns on Urban League, the MidwestCommunity Coun- to five years, at the sametime receiving related YMtA Jobs Project are specific either provided by cil, and the class instruction in a school Chicago area programs'which assist the Bureau the public school system or set upunder the training opportunities, are in setting up on-the-job auspices of the trade. Apprentice programs with local compan- the employer. acting as prime contractors sponsored, in some instances, by ies in their area. Insome of the trades,it is characteristic that sponsorship is by the JointCommittee, on repre- The Road to Apprenticeship which both labor and management are Apprenticeship programs must meetcertain sented. standards of the U. S. Departmentof Labor They must provide Operations in Illinois if they are to be registered. outlined course of class training The Bureau has a relativelysmall staff in a specifically responsibilities, first, to and on-the-job training;they must provide a Illinois with two major other standards, serve as consultants to sponsorsof apprentice- progressive wage and meet of apprentices. . ship and seek out new sponsors,and second, to such as objective selection develop on-the-job training as a partof the The program sponsor mustnotify every- Training body involvedthe minority groups,the school MDTA (Manpower Development Servicewhen it Act) program. This agency hasthe responsibil- system, and the Employment training on the is going to hire apprentices, sothat anybody ity of certifying the need for Once the indi- basis of labor market informationand the interested can apply for the job. vidual is selected, he becomes amember of the availability of trainees. involved, and he is Besides its two principal areas ofoperation, union, if there is a union regulations, just like the ,Bureau works under theApprenticeship subject to the rules and Civil Rights Act, any other beginningapprentice. He is under the Act. It also is involved in the Com- which charges it with the responsibilityof see- jurisdiction of the Joint Apprenticeship

I Labor has been mittee during the term ofhis apprenticeship. The U. S. Department of training, he gets his working with the IllinoisState Employment When he completes his information certificate of completion andhe get? his jour- Service, to set up apprenticeship centers throughout theState. There is one now neyman's card. in Chicago. There is another onebeing established in St. Louis, Mo., whichalso services the Pre-Apprenticeship Programs Their objective is to have East St. Louis, Ill. area. Pre-apprenticeship training programs possible who would been established by the carpentersand, in the find as many minorities as qualify for the trades andrefer them to the metal trades, underManpower Development trades that would behiring the minorities or and Training Act funds.Qualified individuals are taken into aschool program designedby hiring apprentices. training for manufacturers for actual on-the-job Needs the Legislature CanFill then they are referred out tothe one year; The development of anytraining program shops, and they get oneyear's apprenticeship the apprentice- in the school. the MDTA program as well as credit for the time they spend ship programrequires areliable estimate of of labor Apprenticeship InformationCenters future manpower needs. A refinement is making a special market information on thelocal level would The Federal Government in projecting fu- effort to see to it that minorities aregiven equal benefit the work of the Bureau opportunity in all trades. ture needs.

CONSTRUCTION UP, EMPLOYMENTDOWN Automation and the BuildingTrades Not only building projectswill be affected. Road construction, as anexample, now uses change on the a machine thatapplies and prefinishes 60-foot- The effect of technological Only two or three building trades is indicated bywhat appears to wide segments of concrete. do the final touchup. be a permanent drop inmembership in these men are needed to documented by trades. These changes were Programs the Cook Coun- Effect on Apprenticeship Thomas Nayder, secretary of doing a greater Construction Trades Council. With a smaller work force ty Building and finding apprentices is difficult Six years ago the Council had amembership amount of work, in the next few years. of building trades mechanicsin the metropoli- and will be even harder Apprenticeship is not onlyemployment. It is an tan community ofChicago numbering 125,000 potential of the to 130,000 at a peakperiod. Today, at a peak in-depth development of the between 90,000 and worker in a particular field. Itis not a training period, membership is operation. It is a .100,000 workers. At the sametime, this smaller program for a special type of square skill-building training period thatdelves deeply number of workers is doing a greater When a skilled footage and dollar volume ofconstruction than into the worker's capacity. worker's job is eliminated andhe must turn to ever before. has been greatest another facet of his trade,he has the back- The employment drop-off adjust to a in skills easily replaced bymachinery, such as ground, through apprenticeship, to material handling, and in skillsthat have be- new facet of histrade. develop, through like the mortar trades. The Council has managed to come less popular, industry-wide The decline in worker personnelhas stayed collective bargaining agreements, least two years, and this contributions by employers towardthe expenses at this level for at programs. In this smaller number will be able toproduce even of operating apprenticeship who employs a man of a more as mechanization occurs. way every employer

81 fact, an en- particular trade makes some small contribution requirements and specifications. In of ap- gineer can even pour aspecification through toward the overall industry development with the ac- prentice and skilled workers. Collectively,these this machine, and it can come up would be needed contributions handle the needs of the appren- tual engineering drawings that ticeship program. for a particular structure. This program makes the employer more re- It seems that the impact ofautomation has will not be a ceptive to employing apprentices. In the pastit reached into management. There anymore. would cost an employer an estimated$5,000 blue collar-white collar relationship plumber today may annually to take a man with beginningskills The man who may be the particular be the key employee of a firm nottoo long and train him as an apprentice in the be able to trade or industry he was entering.As a result, from now, because the owner will the employer was frightened awayfrom em- getallhis engineering data, hisestimating of work ploying apprentices, particularly whenthere work, and all that former office type was a wealth of manpoweravailable. done through mechanization.

Attitudes of Youth Toward Apprenticeship Changes Ahead for Labor the con- Schools are oriented toward academic,rather The impact of mechanization on about many than occupational, fulfillment. Youngpeople do structionindustrywillbring of not want to come out of highschool and go into changes. There may be a whole realignment another training period unless it pronlises pro- the working period. The eight-hour'day, and. fessional capability at the end. Those in aca- the 40-hour week, in a few years, maynot be demic high schools do not know that being a an appropriate standardfor employment. plumber or an electrician or a pipefitter isstill Construction equipment has no emotion, no clock. If the ma- rewarding work. stress. It can work around the days a Those in vocational high schools withwork chine runs 24 hours a day and seven study programs simply enter the industryfull- week, the manpower working with itis going time after graduation. They don't have to take to have to be available on thatbasis, as well. on another training program. Extended daily employment periodsof 24 Instead of great numbers coming into appren- hours may be the result, with rest periodsand ticeship programs, actually only a small per- then, every third day, a recurrence of thecycle. drop-outs, enters centage, usually the college Challenges for the Legislature such a program. There will be plenty of leisure time available There is an oversupply of recruits for the to the worker. What do the workersdo with glamour trades, such as the electrician or pipe- their leisure time? The Legislature can see to fitter. Other tradespainting and roofing, for State-sup- exampleneed recruits, white and Negro. the preservation and development of ported facilities to be available to the worker Future of Construction Industry during these periods of leisure time. During the next 10 years the work force of Another area of consideration for the Legis- the nation's building industry will probably in- lature is the development of a retraining area crease 25 per cent because thedemand is go- for journeymen. ing to be greater. At the same time, recently The Legislature should support a program developed engineering techniques will be used to provide the reinsurance ofbenefit programs, more, but probably few new oneswill be de- pensions, and other vested interest programs veloped. of workers, when their industry succumbs to The trend is now toward off-the.site develop- automation or technological change, or when ment. Panels of brick or concrete canbe workers have to change their jobs to another brought to the job and lifted into place. area or another industry. The impact of automation reaches even deep- Some liaison between workers themselves er than that. The engineeringfor a job can be and the Legislature would help indeveloping done by a machine rather than by an engineer. means to handle automation.A committee of He feeds his material into a computer that de- Legislators and labor would help maintain com- velops data on the stresses and the material munication between these groups,

82 i Council, in coopera- "Open Door" The Building Trades Civil Rights and the Apprenticeship and has attracted tion with the Bureau of The Civil Rights movement Construction Em- especially Training, and the Building some attentiontoapprenticeship, an apprentice- The claim has been ployers Association, has set up in the building trades. indicate compliance that the minoritieshave ship information center, to that these are jobs with Federal equalopportunity regulations. had small opportunity toacquire. Chicago, the Negro Each trade that has aregistered apprenticeship In the early history of program has beenfound to practice equal played a great role inthe construction trades. them now have handed down from father opportunity, and many of Trade skills often are apprentices of the minorities. to son, but theskilled Negro frequently was always been a large than his neighbor, In Chicago, there has earning a rzreater income number of Negroes inthe journeyman cate- and was able tobring his son into ahigher gory of certaintradeselectricians, plumbers, degree of education.The Negro doctor and masons. Cur- these families, and after plasterers, bricklayers, cement lawyer came from that the building trades of this, the buildingtrades ended rently, the problem is a few years in general are not able toexcite interest within up with noNegroes in theirapprenticeship attract into ap- door has always been open the minority community to programs. The prenticeship those who havethe entry skills. to them.

GO TO SCHOOLTO GO TO WORK Teaching Vocations inChicago incomes, high unemployment,and inadequate parental education. will provide in- being made more Advances in technology Education is continuously for those with the most applicable to the worldof work, stated Dr. creased employment education and training.For example, more Arthur R. Lehnc, AssistantSuperintendent in than 20,000 technicians(and replacements) charge of Vocational andPractical Arts Edu- are need annuallyin Illinois. cation, Chicago PublicSchools. Starting in the kindergartenwith basic con- Preparation before Graduation cepts of the worldof work, economicunder- be prepared perma- developed sys- An individual cannot standing and competencies are nently for the worldof work in his first 20 tematically through theelementary and high be schools prepared to up- mastery of saleable years. There must school, culminating in the date, train, and retrainhim. school students must vocational skills. All high All high school studentsshould be required be given the tools withwhich to earn a living. vocationally oriented sequence of them will not acquire to complete a More than 80 per cent of courses. Typical sequencesmight be pre- pre- college degrees. scientific,pre-technician,pre-business, Eighty-seven million Americanswill be em- trade, occupationalpreparation, or homemak- ployed full-time by 1970;26 million of these market during the current ing. will enter the labor Every person has aright, as well as an obli- decade. to becomeeconomically competent. The increase in the group youngerthan 25 gation, This objective can bestbe obtained through that is becoming part ofAmerica's productive 60 per cent greaterthan in prior good vocational education. forceis In order to make vocationaleducation com- decades. materials are being force expansion prehensive, new curriculum More than half the labor of vocational edu- between 1960 and 1980will come from the developed in all major areas cation: trade and industry,business, home eco- mire disadvantagedgroups, typifiedby low

83 nomics, health and service occupations. These ing at the Dunbar School, Chicago now offers materials reflect careful study of needs of the a full program for them in such craft fields as economy; they have been charted by working these: plumbing, printing, auto mechanics, elec- conferences involving business, labor unions, tronics, and aviation electronics. education, and government representatives. About 2,400 people are in Chicago's appren- The linking of practical work experiences ticeslzipprograms,allat Washburne Trade with classroom instruction is vital to vocational School. There is a small program at the Chi- education.Iteases the transition from the cago Vocational School and one at Prosser, in academic world to the world of work. Students connection with the Tool and Die Institute. are more likely to remain in school if they can Additional programs are needed. Enrollment understand the relationship of education to should be increased by at least 50 per cent. making a living. In some instances, the money from the work provides the actual sustenance New Schools Needed which is necessary for the student to remain Enrollment in vocational education is grow- in school. ing. Vocational schools show a substantial increase in membership, and the general high Relating Education to Earning schools are increasing their vocational offerings In June of 1966, the Chicago Board of Edu- in several areas, reflecting increasing demand cation had 86 vocational programs in opera- for saleable skill education. New and improved tion; in September, 1966, the number had in- facilities are needed to keep pace with the decreased to 117. Some of the fields covered are mand. General high schools will be designed office occupations, industrialeducation, and to serve an ever-increasing percentage of pupils home-economics-related occupations. in need of vocational education. The home economics prograin has been com- Westinghouse Vocational High School, an pletely revised; now it involves the parent with area high school now in partial use and under the child in child-parent needs. construction, delineates a new aspect of voca- The business education prograin is being re- tional education. Its one unit will provide more vamped to include four well-defined vocational meaningful programs for more different edu- business sequences: clerical, secretarial, mar- cational needs than any other facility in Amer- keting and systems, which includes accounting ica. There will be programs there for the and data processing. handicapped pre-schooler. The largest program will be for the secondary-school pupil. Adults Training for health occupations is under way. Chicago now has 142 junior and seniors girls will go there for literacy training or for training in general or specific skills. from 28 different high schools working towards The facility will be provided at an initial theexaminationforlicensingaspractical nurses by spending half a day in school and cost considerably below that of the construction half a day in the hospitals. of a very ordinary high school facility for the number of students involved. The cost will be The trade opportuntiy prograin invited boys around $51/2 or $6 million. from inner-city general high schools, during Another new school, Jones Commercial High the summer of 1966, to talk with the adminis- School, will be the best-equipped of the few trationabout developing specificvocational public voctional schools in America exclu- skills. A program at Dunbar offersan opportunity to train people for competencies they sively dedicated to business training and education. did not have when they left school. Pre-apprentice evening high schoolprograins Money is the Root of All Education have been developed, particularly for assist- No city in America has been able to finance ing members of minority groups to develop the equipping of its vocational facilities to the skills and competencies at the post-high school degree that they should be equipped. level. Jones and Westinghouse Schools will contain A new year-long program provides for the the latest equipment and the right kind of development of craft skills forveterans. In equipment, pointed towards the future. Much cooperation with the Bureau of Veterans Train- of this will be bought through local and Fed-

84 cral monies. Much of it will be contributed. ing to provide for a teacher training progi.arn A comprehensive plan is being developed to for vocational education teachers. Several diffi- reequip and update some of the older Chicago culties exist at this point. The cost would be schools. Building needs and equipment needs high because the prospective teachers would run somewhere in excess of $800 million. require some kind of stipend. There is also the Vocational programs should be doubled and problem of attracting to the school system the tripled. Ten million dollars will go a long way kinds of teachers needed to man both existing toward the goal in terms of the installation of and proposed programs. In addition, Illinois data processing centers. needs to upgrade and uptrain and .upeducate One phase would be to install five data pro- the present vOcational teachers to the changing cessing centers that would serve much of the technology. It also necessary to get teachers school system for those in need at a cost of back into the tradesthey are teaching to about a half million dollars. gain new experience. They need encouragement Several million dollars would be involved in through the utilization of modern machinery bringing a complete system of modern office and bright shops. machines into the schools, but using that equip- Until the schools make their vocational fa- ment in industry on a school-industry coopera- cilities the finest facilities in the school, they tive basis would be feasible. will not really be meeting the needs of the times. Some form of State aid, perhaps on a match- , ing basis, could ease the tremendous pressure on the local taxpayer to provide these pro- New Approaches through Education grams. Research and curriculum money from In many cases the minority group youngster the Federal government directly to the local has been misguided. Somewhere along the line, school system is necessary to develop and im- he hears that the road to the good lifeis plement the vocational education program. through the avenue of college. This is just sheer nonsense. There are many Teachers Needed Money and Teaching roads to the good life and one of them can Chicago is facing a real crisis in terms of be travelled by gaining competence in a skill teachers. Forty shops were closed this year be- and getting satisfaction from a jobincluding cause there was no teacher in the shop. Some the satisfaction of economic stability. If mem- changes will be needed concerning accredita- bers of a minority group or any group turn tion of schools relative to teaching personnel, aside the possibility of developing such com- and at the State level, changes will be needed petence through vocational offerings, they are relative tp the issuance of temporary teachers' losing a real opportunity. One of the big prob- certificates. Such changes should concern the lems in today's education fieldis helping the use of supportive personnel with less than the public understand the importance of this kind conventional educational attainments. of education and training to the individual and A proposal has been made requesting fund- to our whole society.

SEEING THE CHANGES BEFORE THEY CHANGE

Unions. . . Can Help Industry.. . CanHelp Schools In 1962 this Committee and the Chicago As- sociation of Commerce and Industry prepared The importance of a constant liaison between a series of studies on automation. The_purpose industry and the manpower training groups was to determine the impact of automation was stressed by Paul Zimmerer, Executive Di- within industry groups and to gain an insight rector of the Mayor's Committee for Economic of Chicago's future needs. It then became im- and Cultural Development. portant to analyze changes that have occurred

85 in Chicago, in terms of jobs and the location During the six to nine months that the Cook of industries. County Department of Public Aid has had the The result of these recent studies is the Mid- program in existence, it has trained and placed Chicago Economic Development Study. This 80 or 90 people.Entering industry,these study shows that there has been very little women have earned roughly $4,000 a year. relationshipbetweenindustrydemandsfor skills and the manpower training policies of Someone Who Cares the schools. The study indicates a need for Counseling is extremely important with peo- closerrelationshipbetweenindustry,the ple in training. One concept is, to develop a unions, and the training programs. skill center, where a student has access to a There is no coordinating instrument available counselor as he goes through his training pro- at this particular time. There has to be a closer gram and even after he is placed in a job. If liaison, right nowfirst, to make up the gap the worker finds himself undertrained, he can between needs and training, and second, to try go back to the counselor and perhaps even to anticipate changes. back to the school. Communication Within an Industry How Municipal Planning Affects Manpower Certain industries do maintain continuous There is no segment in society that cannot programs of assessing technological change. be trained for a fairly high level of skill once The printing industryis such a group. The basic reading and writing skills are gained. Graphic Arts Council has representation from As far as the Negro community iscon- the printing industry, the advertising people cerned, jobs should be close to the place in who use printing, and the labor unions. They which people live. Regardless of training, if a are working as a cooperative group to try to person is reluctant to travel too far from his anticipate changes and prepare for them. This own home, he will not do so. Councilistrying now to accumulate about Part of the program of the Mayor's Corrimit- $50,000 for the research necessary to direct tee is to bring back into the City some of the itsefforts to maintain the industry herein industries that require the skills which Negroes Chicago. have acquired. A balance between the City and the metropolitan area is desirable so that as Communication Within an Area people adjust to the changes within an econom- The Mayor's Committee worked with the ic and social system, there will be opportunities Department of Public Aid in an experiment for them wherever they go. to develop a similar relationship between the needs of industry and adequate training. The Coordination Needed Negro community, in particular, needed to be Any manpower training program must be trained in skills which had a future. A program aware of every change which occurs in every was developed to train ADC mothers in key- single industry. They cannot simply review the punch. program every six months, six years, or four With the cooperation of a privategroup, a years. This has to be almost a constant review. school, the Cook County Department of Public There has been a constant liaison between Aid, and a number of industries here in Chi- manpower training and the industry, almost on cago, who suppied some of the equipment that a day-to-day basis, because changes do occur was required, about 40 women were put into almost that quickly in some industries. a training program. The school trained them, Coordination is necessary to avoid duplica- and thenitpurposely overtrained them, in don of programs and, where necessary, to com- order to make the women so proficient that bine programs. they would be acceptable toindustry even There are several excellent programs under if they were not high school graduates. the auspices of, for example, the Chicago As- These women have not only found jobs, but sociation of Commerce, the Urban League. the in some instances, have been used by their unions,and some community groups. The companies as supervising trainers for people State Employment Service has some excellent who come in from other keypunching schools. programs, but in many cases they are going

86 in different directions in their attempts to hit Basing Decisions on Economic Understanding the same goal. The good aspects of each of Most cities are eventually going to need a these programs are lost because no one pro- strategy board. The rapid change that occurs gram can benefit by the good aspects of an- in a city's economic system, affecting training other program. jobs, and location of industry, should be an- The role of coordination is an extremely im- ticipated by the chief executive officer of a portant public function. city. He must have information about these changes available to him so that his decisions Establishing this Coordination can reflect anticipated changes within the econ- The local agencies in Chicago, both public omy of his area. and private, plus the Federal government, are A yearly economic report ought to be made, at the present time considering a cOordinating indicating trends within the economic system arm for the various manpower training proof both the City and the metropolitan area. grams. The public school system has its own The chief executive of a city still will have arm of coordination for those enrolled. What is to make his own decisions based on how he needed iscoordination of training for those interprets public reaction, how he interprets who are out of high school, or have dropped need, and the anticipation of that need in the out, and for the "oldsters" from 20 on up, who future. That is his basic forte, but it is up to have been displaced by automation or by eco- the technicians and the experts to give him the nomic change. facts and some concept of reaction.

THE BLACK MAN'S BURDEN Obstacles in the Schoolroom, Barrierson the Job overall receive a poor educationwhich is indicated by the fact that 50 per cent of the A two-year study of the Negro labor market Negro people in Chicago high schools fail to in Chicago, discussed by Bennett Hymer, re- graduate, and many that do graduate cannot search specialist on Employment for the Chi- effectively read or writeand given the fact cago Urban League, shows that the major that Negroes who can meet basic employer en- problems facing the unskilled Negro worker trance qualifications often face discrimination in the Chicago labor market today are: first, once they are on the job, the inevitable out- lack of skills; second, lack of jobs. come is that the Negro worker has not had The impact of automation and technological equal opportunity for the jobs that techno- progress in the Chicago labor market has been logical progress has brought. to decrease the number of unskilled jobs while increasingthe number ofsemi-skilledand The Problem of Inferior Education skilled positions. These new job openings are The high schools are failing to educate peo- out of reach for many Negro workers, pri- ple. Not enough money is spent for each pupil. marily because the schools have failed to equip There are not enough experienced teachers. Negroes for the realities of modern-day em- There is overcrowding in the classrooms. ployment requirements. The expenditure for each pupilis lessin Also, new jobs usually are filled by employ- the Negro schools than it is in the integrated ers upgrading their present labor force. Since schools, and it is less in the integrated Chicago Negroes, in many cases, have been excluded schools than it is in the all-white schools. The in the past through job discrimination, they qualityofeducationofferedinintegrated automatically are denied access to these new schoolsis always higher than the quality of jobs. education that is offered in Negro segregated Given the fact that Negroes in Chicago schools.

87 Drop-outs willnot be totallyeliminated rationing device, allocating the number of em- through any boosting of the quality of educa- ployment opportunities disproportionately be- tion available to them, but in order to reduce tween whites and Negroes in favor of unskilled their number we must not only increase the whites. Negroes usually have to take the less expenditure per pupil so that itis equal for favorable employment opportunities, which are both whites and Negroes, but raise the expendi- usually found in the declining industries, where ture per pupil forallpupils,regardless of there are lower pay scales. color. A recent study indicates that Negro janitors in Chicago earn 10 cents an hour less than The Failure of Vocational Education white janitors, while Negro material handlers In regard to vocational education as it exists earn 32 cents an hour less than white material in the Chicago schools, many of the pr:)grams handlers. Yet a comparison of both groups, the are outdated or underequipped. unskilled white workers and the unskilled Ne- As for vocational counseling in the Chicago gro workers, shows that the Negro workers schools, the pupil-counselor ratio is 350 to 1. actually have the edge in terms of age, length The counselor is required to have three years of residence in Chicago, education and work of teaching experience at the level which he experience. Even the results of some of the counsels. The pupil-counselor ratio will not be current on-the-job training and manpower de- reduced to a reasonable level, such as 50 to 1, velopment training programs show that the unless this unrealistic requirement is changed. post-training earnings of Negroes who com- Because the pupil-counselor ratio is so high, plete the training are 20 cents an hour less counselors do not have time to acquire the than the post-training earnings of white grad- relevant information about job openings for uates, ec.;en though Negroes in the program are their pupils. Most of the time, they use 10- better educated than the whites in the program. or 15-year-old information in counseling Negro pupils about the labor market, assuming that Negroes Come, Jobs Disappear the only jobs for Negroes are as postal clerks If present trends continue, the future impact or mail order house clerks. The currently less of technological progress in the Chicago labor discriminatory attitudes of the unions have not market should be a steady decrease in the been communicated to the vocational coun- number of jobs that aEe available for unskilled selors and to Negro youngsters. workers. In the building trades, because of entry Clerical jobs will be the next major area of restrictions that result from a variety of mech- employment to face automation. It is precisely anisms, there are only 143 Negroes out of a this area of employment that Negroes have total of 2,000 apprentices. In the building and just been entering. trades unions in Chicago, probably two or What we may be faced with is a situation three per cent of their labor force is Negro, where Negro workers are earning the right to whereas the Negro is about 11 per cent of the jobs at the time when the jobs are disappearing. total Chicago labor force. The unions say the door is open, but they mean they are not dis- This description of the impact of technology criminating as much as they used to. on the Negro workerissupported by the A study last summer indicated that the un- latest estimates of unemployment. According employment rate for recent Negro high school to the September News Digest (1966) of the graduates was about the same as the unemploy- U. S. Department of Labor, the Negro unem- ment rate for Negro high school drop-outs. In ployment rate increased from 7 per cent to other words, whether or not a Negro youngster 8.2 per cent during the period April to August, had finished high school did not affect his while the white unemployment rate during the chances of getting a job. same period remained constant at 3.4 per cent. This increase in the Negro unemployment rate Fewer Jobs, Less Money for Negroes occurredprimarily among unskilled Negro The market for unskilled workers in Chica- workers, for the report also shows that the go, under the impact of technological change, unemployment rate for all unskilled workers has been narrowing. Discrimination serves as a rose by 1.1 per cent.

88 This increase in the Negrounemployment in Chicago educate Negroes tobe unskilled thetightest labor workers, they will continue tobe unskilled rate has occurred during be vulner- market since the Korean War, andhas occurred workers, and they will continue to and tech- inthe labor market wherethereare laws able to the impact of automation against discrimination,specialtraining pro- nology. also heavy conscription Second, we must increase thenumber of grams in operation, and retrained un- into the Army of young Negroeswho would workers that currently are being ordinarily be entering the 'labor force orwho der OJT (On-the-Job Training)and MDTA. have just entered the labor force. Without any In Chicago at this momentthere are roughly these programs; of these, the Negro unemployment ratewould 2,000 Negro workers under 75,000 Negro be even higher. yet thereare approximately workers who need retraining. Three Steps to Take Third, we must increase the numberof ap- To counter these conditions,first, we must prentices in the Chicago trade schools to an double the budget of the Chicagoschools so amount thatisproportionate to the Negro that Negroes can acquire the necessary amount population of Chicago. of education to prepare themfor today's and Action on all of these should beimmediate, tomorrow's jobs. So long as the publicschools and it should be effective.

WHO ARE THE POOR? How the 0E0 Fights Poverty program and a smallbusiness development center program. Robert I. Shackford, Deputy Director ofthe In addition to all these programsthat can Great Lakes Regional Office of EconomicOp- fallintocategoricalheadings,thereisthe portunity and also its manpower specialist,de- VISTA program, Volunteers InService To scribed the psychology of poverty. America, which provides trainedvolunteers Opportunity to assist in areas wherethere is a high inci- .. The purpose of the Economic Act is to attack the causes of poverty,from dence of poverty. whatever they result, wherever they are.Its basic programs fall into these categories: Who Needs This Help and Where? 1. Manpower: Under the manpower, orhu- Nationally, 40 per cent of the 32 million man resource, category isthe Job Corps, con- poor are under 15 yearsof age. An additional of age and sisting of urban training centers.Conservation 25 per cent of the poor are 55 years centers also are in operation. TheNeighbor- over. This leavesapproximately 35 per cent hood Youth Corps is administered by theDe- of the poor population withinthe technical and economic partment of Labor. Under theCommunity Ac- age groups where manpower tion Program, one of the titles of the Economic development programs are pertinent. Opportunity Act, are a great variety of pro- One of the characteristics of the poorthat that they grams, some of them manpoweroriented. makes them difficult to educate is 2. Education: Project Head Start and Up- are unreachable, in the sensethat they live in ward Bound are administered by theOffice of out-of-the-way places or in urban ghettos. Rare- Economic Opportunity. An adult basic educa- ly are they able to travel out fromthese places. in the tion title is administered through both theCom- They are unreachable psychologically, munity Action Program of 0E0 and theDe- sense that they aredenied access tc2...,,what the partment of Health, Education, andWelfare. rest of the world takes as a matterVcourse. 3. Economic Development: The Officeof One of the main features of all ofthe pro- Economic Development conducts a ruralloan grams in the war on poverty,then, is reaching

89 out to the poor. That is to say, the programs to find their own way outof their poverty- take place in areas of high incidence of pov- stricken situation. erty. In the City of Chicago, the urban prog- Jobs, Not Schools, are the Place forTraining ress centers are under the controlof the Chi- Training is something that should bedone cago Committee on UrbanOpportunity, which is financed under the Economic Opportunity on the job rather than inschools. Training in schools is an extraordinarily ex- Act. pensive thing to do. With funds limited,itis No Rags to Riches Since '45 important to get as much training perdollar Another characteristic of the poor is their as possible. In the current year, avery sub- general distrust of those in the majority, of stantial fraction of the money of theMan- those in the more affluent segment of the na- power Development andTraining Program tion. The gap is widening between the poor is going into on-the-job training.This is an and the affluent because the escape route of excellent diredion. unskilled and semi-skilled jobs is, by and large, A second difficulty in training is that many closed to large numbers of poor. The old rags- employer requirements are not really related to-riches story has not been true since World to performance. War II. A third difficulty is that too little emphasis Training programs such as MDTA (Man- is placed on job development. Itis necessary power Development and TrainingAct) do pro- to educate employers to modify theirjob re- vide subsistence payments, but the amount quirements. provided in such training programs is not near- Those training programs that are sponsored ly enough to permit a man and his family by the big companies, other than those that are even to survive during the trainingperiod. That financed through Federal programs such as is why such programs have high dropout rates; that of the Brunswick Corporation in Chicago, a man will take an offer oflow-paying work are general programs toproduce people to rather than wait to be trained and earn more work for them in the tight labor market. per how', because he is faced with ahungry The only direct n.4.npower program under fam;ly. the 0E0 is the Job Corps. At the moment, A typical family of four, in a big city like every trainee who comes out of the lobCorps Chicago, has to have more than $5,000 just is being snapped up. to maintain a decent level of living. This comes to about $100 a week. Under MDTA a person What Programs Succeed? may get subsistence allowances rangingfrom The poverty programs that appear to hold $44 to $74 weekly. But if the goal is to restore most promise are those that provide multi- this man to a fully productive life, then he service centers in urban areas of intense pov- needs a big enough subsistence so that he can erty or that provide mobile services to people survive while he is in training. in rural poverty-stricken areas. The most suc- The escape routes from poverty are closed cessful programs" focus on the primitive needs. not only to those who are technically unem- Health programs un-der the Economic Op- ployed or presently on welfare rolls, but also portunity Act succeed because, for the first to a vast number of people who are marginally time, they do try to bring comprehensive health employed or underemployed, and whose pov- care to the people who needit. The legal ertyisharder to seebecauc..: they do not services provided under the Act bring adequate present themselves visibly in any of the general legal counsel to those who need it. categorical programs that are tax supported. Poverty has many origins, and among these The lengthening of training periods and the origins are racial .prejudice, unrealistic employ- lengthening of education periods cut off even ment requirements, and inadequately financed more people who normally would be expected remedial programs.

90 THE STATE AS TEACHERAND TRAINER Money Public Aid is More than Planning with an Eyefor the Ladies Long-range plans of theDepartment call for the provision ofeducation and training facili- The number of personsreceiving Public Aid ties to recipients in allcounties of the State. in Illinois hasdecreasedby 10 per cent, while During the past four yearsfull-time adult edu- the number across thenation hasincreasedby cational centers have beenopened in six areas approximately the same percentage.William in the Downstate counties.A comprehensive Fishback, assistant chief ofthe Division of day-care center offersthe basic education, the Downstate Operations andacting superinten- higher academic preparationforthe GED dent of Recipient Trainingand Education for (General Education Diploma) orhigh school the Illinois Departmentof Public Aid, ex- equivalency certificate, andalso, training in plained the relationship betweenvocational various vocations. Four of thesix centers intraining and this decline inthe size of the clude child-care facilities. public assistance rolls. Hisdiscussion empha- Vocational training has beengeared locally. : sized activities of the 101Downstate county For example, power sewingis indicated as a departments that adtninisterpublic assistance need in Southern Illinois.Other categories in- programs. clude drapery making,graphic arts,audio- visualtechniques,andkeypunchtraining A History of Helping courses. gamut of auto In the early days able-bodiedpeople worked For males, there is the whole and repair, out their public assistancegrants on various mechanics, small motor rewinding community projects. Suchwork-training pro- concrete finishing, and carpentry,the training grams still exist.Downstate there are now ap- again based on local need. proximately a thousand individualsin work In addition to the full-timetraining centers, ranging from township roads toparks. the Department has made agreementsthrough Some individuals formerlyassigned to this the local school boards forevening academic type of project are nowbeing trained. One classes in areas that cannot beserved by the result of the adult training programs,begun comprehensive centers. These classesprovide in 1962, has been a decreased caseload for the basic literacy and theGED work three individuals are in cas :workers. nights a week. Also, some The number of persons receivingPublic Aid training in other institutions such asthe Voca- in Illinois has declined by 10 percent. Na- tional Training Institution at SouthernIllinois tiona.fly, the total number of persons onpublic University or in programs such asthose for assistanceis up approximately 10 per cent, practical nursing or beauty culture. and among some eight or nineother populous The Department of Public Aidhas a fairly and industrial states, such asCalifornia, New new program in itsOperating Division. A pres- York, Michigan, and Pennsylvania,individual ently small staff spends most ofits time in the finding out case loads haveincreased from 30 to 50 per field, making contact with industry, and trying cent. the employment needs of industry, Of all individuals receiving publicassistance, to match the employment needwith a potential those receiving Aid to DependentChildren are employee on public assistance rolls.This pro- the prime potential as far as trainingand re- gram is gearedclosely with thetraining centers, training are concerned. This , groupconsists which are prepared to changevocational train- of roughly 3,000 ADCU (Aid toDependent ing if the need so indicates. Children of the Unemployed) men and35- The first part of the caseworker'sjob in 40,000 ADC women. The primary concern screening potentials for training of anykind is now is the potentiallyself-supportive women to work closely with theindividual family, keeps a on ADC, who havethe abilities to find and determining the motivation. The staff keep jobs or who need further educationand very close watch on theattendance records and training before they lire ready foremployment. the first absence is immediatelyfollowed up.

91 An individual starting out in the labor mar- Needs of the Department ket at age 21 can expect to be trained or re- One great need of the Department of Public trained seven to nine times before his working Aid is for the ways and means to continue days come to an end. This certainly affects his some type of supportive service tothe former motivation. public assistance recipient or the potential re- What About the Children? cipient. The Department of Public Aid has con- For a number of years the Department was tributed to tin campaign to prevent school accused of doing little to motivate people to- dropouts. The Department has a scholarship ward self support. This picture has changed as program to help qualified ADC children at- the Department's staff has increased both in tend college. In addition summer "help youth" numbers and in qualifications. The Department programs involved 16,000 children in 1966. still, however, can use additional staff.

LEARN TO EARN The War on Poverty Must Be Total War A 1962 study by Science Research Asso- ciates established that functional illiteracy was Increasing Numbers, Decreasing Employability a prime reason for dependency. In 1959 the Cook County Department of Public Aid set out to determine the reasons for Illiteracy and Job COmpetition the rise in welfare cases. A report on the result- In March, 1962, (he' Cook County Depart- ing inquiries and studies was presented by ment of Public Aid, in collaboration with the Herbert Herman, Chief of the Bureau of Edu- local Board of Education, inaugurated a mas- cation and Training, Cook County Department sive attack on illiteracy including a counseling of Public Aid. service, a testing unit, and vocational guidance The first study confirmed that unemployment programs. was the major reason applicants wereapplying There are now three daytime centers, with a for assistance. Of the 767 unemployed persons total of about 400 students, and 14 evening included in the sample, 88 per cent had not centers dealing primarily with basic adult edu- completed high school, and 75 per cent were cation. The Adult Basic Literacy program has classified as unskilled. In addition, 61 per cent helped 3,321 individuals acquire the necessary were new applicants who had never applied reading and arithmetical skills to enable them for assistance previously. Yet this was in a to compete for jobs in an expanding techno- period of full employment and even a labor logical society. shortage. A study made in 1965 of those persons who A second study showed that technological had completed training programs showed that changes were responsible for the loss of jobs 85 per cent were either no longer receiving of 59 per cent of the recipients. These indi- public aid or were receiving assistance only to viduals had been unemployed for 15 weeks or supplement their earnings. longer when the study was made; six months later, 73 per cent of this long-term group were Types of Training Programs still unemployed. Vocational training programs have been op- In April of 1961, another study of applicants erated through MDTA, through collaboration showed that the general assistance rolls were with labor organizations and with industrial still increasing. Whereas the semi-skilled work- companies, and through the Department's own ers accounted for 24.8 per cent of those inter- sheltered workshop program. These training viewed in the first study, the figure had now programs include the following: jumped to 40 per cent. Yellow Cab driver training; food prepara-

1 Almost None are JustLazy tion training, a 13-week course;wood finishing National Cash Some men do not readilyaccept their posi- training, a 16-week program; others cannot readilybe Register office machinetraining, a 12-week tion in the family; other accepted by an employer. course; keypunchoperator training; and thousand people a programs such asthose offering training as The Department places a month in jobs throughits Welfare Rehabilita- nurses' aides, licensedpractical nurses, depart- tion Service. Some ofthese individuals hold a ment store sales andnon-sales personnel, ser- be domestic workers, and job for such a shortperiod that they may vice station attendants, placed a couple of times amonth. food, diet and kitchen helpers. has taken full There is in addition ahard core of unem- The Public Aid Department probledis that Development and ployable men with such severe advantage of the Manpower them into training Training Act of 1962 and, on acontinuous itisdifficult even to get with today's laborshortages basis, refers persons tothe program for train- programs. Even these men have a verydifficult time finding a ing in clerical andmanagerial work and the job, some because ofpersonality problems and trades. than 4,735 per- others, in tremendousnumbers, who are un- Since August, 1966, more undisciplined that they are training programs; 1,528have skilled and also so sons entered The ex-convicts are been graduated, of whom1,252 have been the chronic welfare types. the most difficult todeal with and the most placed in employment. almost no men on The Department isparticularly concerned difficult to place. There are placement for the relief who are just plainlazy. about counseling and job find men eligible youth who drops out ofschool. It is extremely difficult to for an education ortraining program or even The Total Family Approach work relief. The CookCounty Department of The belief of the CookCounty Department Public Aid is geared totrain literally thousands month are in train- of Public Aid is that the way tobreak the chain of people. About 13,000 a of poverty and prevent acycle of dependency ing at the present time,grouping together those is to restore the head of thefamily, even if it in adult education,job training, work relief, be the mother, toself-supporting employment. Neighborhood Youth Corps,Jobs Opportunity Where possible, care of pre-schoolchildren is and the ShelteredWorkshop programs. About provided on the school premiseswhile the 20,000 or 25,000 couldbe handled efficiently. mother attends basic education orvocational Out of the total caseload of about 95,000 training classes. Often, in trainingmothers, it cases (250,000 persons,including children) in is not necessary to have avocational objective, the Cook CountyDepartment of Public Aid, in one aspect but just family improvementin itselfmaking between 13,000 and 15,000 are her a better housekeeper,having her keep the of training or another. important, restoring home cleaner, and, most Education and Training Mustbe at the Center her self respect. have done away is a total fam- The earth-lifting machines The focus of the Department There is a steady ily approach. If CookCounty is to have a with the pick and shovel man. curative one, shifting from the unskilled tothe semi-skilled, preventative program as well as a in turn, to the skilled then it must start even withPlanned Parent- and from the semi-skilled, and highly skilled. hood. Department of The potentialbenefits of upgrading and _ One special program of the ,substantial, and the Public Aid is POP (ParentOpportunity Pro- training the unskilled are project is potential will be realizedwhen education and gram). This special demonstration in an expanded, intended to restore the man tothe status of training have a central role coordinated system of programsand policies. being the head of the family.

. 93 THE NEED TO KNOW Labor Wants a Warning be forgotten. Let us have some place in the changing industrial society in which we must Labor in Illinois is particularly interested in live and work and have our being." training because it would assist workers dis- The State AFL-CIO is favorably disposed to placed by automation, according to Lee M. any kind of program by which displaced work- Burkey, an attorney who represented the Illi- ers may have an opportunity for retraining. nois State Federation of Labor before the The national AFL-CIO has a very active pro- Commission. gram of cooperation on retraining with em- Employers and government, both state and ployers in various segments of the country Federal, have a responsibility to aid in training where automation has become a problem for programs for those who are displaced by auto- working people. mation. The unions, too, have both an interest in training and a duty. In some areas, they What Government Might Provide have participated effectively in setting up train- The AFL-CIO has not arbitrated in the field ing programs for those displaced by automa- of automation. There have been some arbitra- tion. tions with companies that are moving plants, but such a move does not necessarily have its What Labor Asks inception in automation. A state law requiring Unions, at the present time, are thinking in notice of relocation would benefitlaboring terms of two needs besides the need for train- people. ing. When a number of people are going to be displaced by the introduction of automated Warning by Grapevine equipment, the union asks that the number of Where there is a labor union, such a prob- hours be reduced, with no reduction in pay. lem may resolve itself best in the field of labor- The union also asks that there be some plan management relationships. But there is no re- for severance pay. Yet these are solutions only course for the unorganized. If an employer to the temporary and immediate problem. without a union decides to move, there is no Inthe long run, training programs must be hope or any help for those unorganized work- used that will enable people to move from one ers, short of the action of the Legislature. industry to another, or to be retrained for the It also might be wise to require employers same industry in which their jobs have been to notify employees of impending automation, eaten away by automation. but in most instances the grapevine isvery efficient. Labor Has Not Resisted Automation Once plans for automation are known, the When this second industrial revolution be- union is in a position to ask the employer what gan, there was a lot of comment that labor he plans for the employees. One of the greatest would resist automation. This has not been questions of people facing automation is the the fact. Labor does resisfthe blatant displace- problem of seniority. People are troubled be- ment of a man without any consideration of cause they are afraid that they will be dis- his rights to be fitted back into society, and placed. because of this position some segments of so- If failing to give advance warning of auto- ciety have concluded that labor resists techno- mation changes threatens to become more com- logical progress. In point of fact, labor has mon we are going to need legislation to require simply said, "If automation comes, let us not such warning.

94 1965-671The Cost of Acting onAutomation

Expenditures: 1965-67

Asum of $25,000 wasappropriated for the Commission *by theIllinois General Assembly "to carry out its duties underthis Act"(H.B.1310) for a two-year period. The Commission began its.workin the latter part of 1965, but the expenses shown below were expended almosttotally in 1966only a one-yearperiod. In comparing expenditures for the1965-67 biennium to those projectedfor 1967-69, this fact. should be borne in mind.Moreover, the time of all professionalpersonnel and the time and services of mosttechnical and clerical personnel werecontributed to the Commission, except asnoted below. Itis estimated that Commission members and others contributedpersonnel staff services equivalent to a sumof $35,000 in 1966. To complete the digest ofproceedings and prepare a report tothe Illinois General Assembly, including recommendations,will require about $5,000 inadditional professional services.

.-: Commission Expenses: 1965-67* Expenditure Expense Item $ 2,042.50 Personnel Services: Part-Time Secretary Administrative Aid (Hearings) Editorial Assistant Contingent Clerical Service 9,351.97 Operation and Administrative: Commission Meeting Costs (Illinois) Hearing.; Surveys: Washington, D. C. and California Printing Postage Supplies Messenger Services Telephone Conference TOTAL $11,394.47

*December 1965 to December 31, 1966

95 1967-69IThe Commission Program

Projections for the Biennium

Plans and programs and activities that were projectedby the Commission could not be encompassed within the stipulated timeperiod, 1965-67. An effective and substantial beginning was made by the Commission. Limitationsof time, staff, and resources, however, handicapped itsefforts. Furthermore, the scope and complexity of problems encountered added to the dynamic characterof technological change require continuous study over a longer period of time. To complete the work of the Commission,enabling this body to propose well designed and effective legislative proposals andrecommendations, the following steps are essential:

Continue to conduct Hearings of Illinois industriesthat have been or are expected to be sharplyaffected by technological change and automation, including:

Coal Industry Agriculture Contract Construction Industry Primary Metal Industries : Steel, etc. Railroad Industry Communication Industry Machinery Industry (except Electrical) Electrical Machinery, Equipment and SupplyIndustries Printing, Publishing and Allied Industries Motor Freight Transportation and WarehousingIndustries Electric, Gas and Sanitary Services Health Services Industry Conduct Hearings of special situations in whichcommunities in Illinois have been adversely or beneficially affectedby scientific or technological developments or both, such as Hennepin andWeston.

NOTE: The period covered by this proposal is July 1, 1967 to June30, 1969.

96 Visit plants, installations, andfacilities that incorporate a large measure of technological progress. Arrange conferences of industry,university, and other related research and development personnelin Illinois. The aim of theconfer- ences will be to determinethe role of State government infacilitating the growth of research and technological progress. Form a Research Committee to work onrecommendations for collecting and analyzing data ontechnological progress in Illinois. The Committee also will seek to developrecommendations concerning improvement of data collection programs onindustry growth, occupations, employment and unemploymentrates at local community -levels. Arrange for a survey on the impactof technological change upon labor-management relations as reflected in contractagreements. Confer with officials of state andFederal departments on the impact of technological change upontheir programs and activities. Seek information, proposals, and recommendationsfor effectively meeting the challenge of technological progress. Confer with labor leaders in Illinois.Confer with industrial leaders in Illinois. Explore the impactof the programs on science and technology that are being sponsoredin Illinois under the State Technical Services Act of 1965. Tap the know-how of scientists,engineers, and others who are engaged in advancing technologicaland scientific projects and programs. Conduct seminar programs onthe effect of science, technology, and cybernetics upon communityinstitutions and society. Prepare proposals andrecommendations for enactment of legislation and reorganization of Statefunctions and operations that are produced by technological change. The study program outlined above issubject to modification as theCommission proceeds with its work. Flexibilityand change of direction maybecome necessary as the Commission pursuesits goals.

BUDGET PROJECTIONS

Experience in the 1965-67 perioddemonstrates an urgent need forfull-time professional and secretarial staff.Without such staff, the activities ofthe Commis- sion as noted herein cannot becarried Out in keeping with the natureof problems posed by technological changein Illinois. Even given the staffprojected herein, it is doubtful that the full program canbe accomplished without assistanceof Illinois departmental, university, and Federal agencypersonnel.

97 BUDGET ESTIMATES: 1967-69

BUDGET ITEM PROJECTED EXPENSE 1967-68 1968-69

Personnel:Permanent $31,000 $33,000

Executive Director $15,000 Administrative Assistant 10,000 Secretary 6,000

Personnel:Temporary 12,000 15,000*

Secreta ria I $3,500 Editorial 6,000 Other 2,500

Administration

Office Rental 2,500 3,000 Furniture 2,500 1,000 Equipment 1,500 2,000 Contingency Fund 1,000 1,000

Operations

Telephone 1,500 1,750 Printing 1200, 4,500 Duplication Services 500 500 Postage 750 1,200 Reimbursement of Commission Members 9,000 11,000 Supplies 500 750 Accounting Service 300 480 Conferences 2,500 3,000 Survey Travel 3,500 5,000 Subscriptions, etc. 300 300 Data Processing Services 6,000 7,500 Contingency Fund 2,500 2,500

TOTAL $79,050 $92,480

*Allows for increases at end of biennium to prepare reports.

Based upon projections itemized above, the Illinois Commission on Automation and Technological Progress :equires a sum of $171,530 for the next biennium. This is a carefully considered estimate based upon Commission experience in the 1965-67 biennium.

98 Recommendationsof theCommission

Progress has been The Illinois Commission onAutomation and Technological evaluating, for more than a year,the impact andimplications of technological and change upon industry, agriculture,education, unions, government, manpower, community institutions of the Stateof Illinois. To iniplement its investigationand studies theCommission has held one-day insurance industries, and a hearings on the meat-packingand the banking and two-day hearing on thevocational education and manpowertraining programs. science Conferences were arranged withleading experts on automation, manpower, Corn- and technology inWashington, D.C., Los Angeles,and San Francisco. The m:ssion heard and received reportsand other materials fromrepresentatives of industry, labor, and government.Commission members visitedindustrial plants, business and governmentoffices that have installedautomated and computerized systems. Based upon these andother activities, the Commissionhas arrived at 22 recommendations. These, however, arenot all strictly formulated asrecommendations. Some are more in the natureof proposals. Others suggestspecific changes in public basis for study and action: policy and program.Altogether, they are presented as a

nological Progress be extendedfor another 1. The 74th IllinoisGeneral Assembly created the two-year the Illinois Commission onAutomation and period of two years, that is, for Technological Progress for thebiennium 1965- period 1967-69. 67. During this period, theCommission initiated a program of activities toinquire into the subjects covered by HB 1310.However, be- 2. To carry out the programsand activities Commission to effectively cause of the scope, rangeand complex nature necessary for the of the subject matter understudy, including dischargeitsresponsibilities, we recommend continuing changes in technology, theCom- a budget of$79,050 for 1967-68 and $92,480 mission found itself limited by lackof time, for 1968-69 or a total of$171,500 for the staff and resources to probe manyproblems biennium. See Appendix for itemizedbudget which emerged in the field of theCommission's estimates. work. The proposed budget enables theCommission We recommend that the life of the Stateof to employ qualified staff toconduct a more in- Illinois Commission on Automation andTech- depth study and thorough analysis.

99 3. Technological change, automation, and ob- It is recognized, moreover, that the scope of solescence are sometimes slow, creeping pro- such a report should encompass data which cesses. On occasion,technological change is would measure the "economic health" of Il- dramatic as in the cases ofobsolescence of linois. meatpacking plants; decline in railroadjobs causedbytheintroductionofautomatic switching equipment; and reductionincoal S. The State Technical Services Act of 1965 mining operations occurring at the sametime was enacted by the U.S. Congress to encourage coal mining productivity per manhouris economic growth in the states by wider diffu- sharply increased. There is a need for a pro- sion and more effective application of science gram of continuing surveysof Illinois tech- and technology in business and industry. The nological progress, industry by industry.Such Congress seeks to support state and interstate surveys should includedata on industry tech- programs which make available, to business nological developments, industry growthand and industrial leaders, benefits derived from decline,industryproductivity,occupational Federally financed research as well as other changes, employment and unemployment. research. The Illinois Department of Business and Economic Development already has ini- We recognize the need for theIllinois Depart- tiated a State program based upon the State ment of Business andEconomic Development, Technical Services Act of 1965. This program in cooperation with the Illinois Departmentof based on the Technical Services Act deserves Labor, to conduct regular and continuing sur- support and encouragement. veys of technologiCal progress.of all industry in the State of Illinois. To assist inthe imple- The Commission recommends that the Illinois mentation of this objective, we recommend Department of Business and Economic Devel- that an Advisory Committee beappointed opment in conjunction with other state agen- representing industry, labor, universities, and cies, labor, industry, and universities seek to other interest groups. expand its activities under the State Technical Services Act of 1965. State funds also should be utilized to supplement Federal support of 4. There is presently no availablecomprehen- such programs. sive report on the impact of technological developments on business conditions and economic trends in Illinois. Nor is information 6. We recommend that a series of science and available about plans and programs that aim technology conferences be convened by a suc- to stimulate economic growth, scientificand ceeding Illinois Commission on Automation technological progress in the State. and Technological Progress for the purpose of assisting in the development of State goals and The Commission recommends that the Gov- policies that correlate research activities with ernor, with the aid of a Council of Economic economic growth and human needs. Funds to Advisors, collect and assess data on the impact finance such conferences should be sought of technological progress upon the economy from the Office of State Technical Services, of the State and prepare an annual report to U.S. Department of Commerce, with the co- the Illinois General Assembly with such rec- operation of the Illinois Department of Busi- ommendations as he may deem appropriate. ness and Economic Development.

100 deeply affect the 7. Data are gathered inIllinois on (among 9. Science and technology ofIllinois. other items) labor force, wages,hours, employ- life,economy, and government today ment by industry andbusiness establishment, Government policy and decision-making technical and scien- and unemployment, underadministrative reg- are often dependent upon ulations and requirements establishedby the tific know-how. Nowhere within State govern- often than at U.S. Bureau of Labor Statistics andthe U.S. ment is this need manifest more Bureau of Employment Securitywhich also the executive level. finances the program. Emphasis is placed upon metropolitan areas in the collection ofdata. The Commission suggests that theGovernor Other areas of the state and even local areas consider the appointment of a Scienceand with metropolitan areas are inadequately cov- Technology aide or adviser from among top the State to serve as ered or omitted. ranking scientistsin consultant to the Governor on matterscon- We recommend that negotiationsbe under- cerning scientific and technologicalpolicy. taken by the Illinois Bureau ofEmployment Security with the U.S. Bureau of Employment of the im- Security to enlarge the scope and flexibility 10. A study should be undertaken in industry upon of data collection and analyses in theState of pact of technological change Illinois State Illinois. Data on all significant areas of the the functions and services of the for em- State, including local areas within metropoli- Employment Service as performed should tan areas, 'should be collected,subjected to ployers and job-seekers. Such a study evaluate types of serviees, needs, organizational analyses, and published. requirements, and To derive maximum benefits, data and anal- structure, finances, personnel should be de- yses should be distributed widely tobusiness, management. Recommendations Em- government, community, and labor organiza- veloped that will enable the Illinois State with man- tions. Effective liaison should be developed ployment Service to cope effectively from technological with all media for dissemination of information power problems resulting the changing industrial environ- to the public. progress in ment of the State.

8. The Commission recognizes that the existing Science Advisory Council is performing 11. The Commission recognizes theneed for an important service by its work onthe prob- establishing a statewide coordinating council to lems arising from emerging sciences, automa- develop policies and review administrative op- tion, and technological change which affects erations of all manpower training,vocational the future economic potential of the State of education, and other specialized training pro- Illinois. grams, including those at thejunior college and university levels. Such a council should include The Commission recommends that permanent representatives from government agencies, la- life and status be given to the Science and bor, industry, junior colleges, universities and Advisory Council. The Commission also rec- licensed occupations. ommends selection of three members of the succeeding Illinois Commission on Automation The Commission recommends that theGov- and Technological Progress to serve ex officio ernor take under considerationthe develop- on the Council. ment of a coordinating council for manpower

101 training, vocational education and other spe- industry trade level, drawingin trade associa- cialized training programs, including those at tions and companies forcooperative relation- for the junior college and university levels. ships in educating and training manpower new occupations inIllinois.

12. The Commission recommends thatthe Il- linois Department of Labor and Board ofVo- 15. Success of the WestonProject may depend cational Education and Rehabilitation create upon the availability of manpowerwith specific a comprehensive plan for thetraining of youth skills and training required formanagement (below the baccalaureate level) in new occu- and operation of this new facility. pations growing out of the introduction of technological innovations in industry. The plan The Commission recommends that the execu- should be directed particularly towards new tive branch of the State of Illinois requestthe career patterns that are emerging outof the U.S. Atomic Energy Commission to prepare a forward thrust of science and technology. manpower table for theWeston Project. This table should provide a manpoweranalysis and The Commission recommends also that State forecast showing occupational requirements, authorities of the Board of Higher Education, job classification structure, projected employ- Junior Colleges, and Office of the Superinten- ment schedule, and salaryspecificatiOns. Illinois dent of Instruction should be encouraged to should seek to become a primary source for participate in planning programs designed to supply of qualified manpower to the Weston facilitate the application and use of science Project. and technology in industry and government. The Commission recommends further that Illinois educational and other related institutions and agencies organize their resources to 13. The Illinois Department of Labor and the prepare students and personnel to meet man- Board of Vocational Education and Rehabili- power demands and requirements projected on tation should initiate a comprehensive review the manpower table supplied by theU.S. of technological trends in industry and their Atomic Energy Commission. implications for changes in occupations during the next decade. 16. The Commission recommends development The Commission recommends that such find- of an advance warning system whereby em- ings be used as a basis for planning curricula ployers who are planning, because of techno- for vocational training at both secondary and logical change, to shut-down, expand, or relo- post-secondary levels. Recognition should be cate plants, intra- or inter-state, should be en- given to the need for building into training couraged to report such plans to the Illinois programs the versatility and flexibility in pri- Department of Labor. mary skills needed to facilitate future manpower shifts from obsolete to new occupations with minimum job displacement. 17. The Commission recommends that displaced workers and those about to be displaced 14. We recommend that State agencies estab- because of technological change should be lish continuing contacts with industry on an given opportunities to secure counseling and

102 training that will aid them in coping with new 20. The Commission recommends thateach and changing occupational requirements. The State agency should be requested to prepare Illinois State Employment Service should co- and submit to the Executive Departmentand operate in implementing these objectives. the Illinois General Assembly a report onthe impact of technological change upontheir functions and operations. Each agency also 18. The Commission recognizes thatemployees should be requested to outline steps being displaced as a result of technological progress taken by them to utilize technological innova- may be subjected to severeeconomic hardship. tion for operational improvements in their de- When voluntary efforts fail, State and commu- partments. nity programs should be available to enable displaced employees to maintain reasonable living standards for themselves and their fam- 21. The Commission recommends that the Per- sonnel Department of Illinois give considera- ilies while they make job readjustments. Such programs should provide special training op- tion to the establishment of an executive and developmentprogramthat portunities, training compensation, supplemen- administrative tary unemployment benefits, loans, and funds would be geared to creating, among supervisory personnel, an awareness of scientific and tech- for job and family relocation. nological progress as well as the utilization and application of such concepts in the innovation 19. Technological innovation has impaired the of State governmental operations. economies of many communities inIllinois. Obsolete plants have been relocated and shut- 22. The Commission recognizes the need for down. Entire industries such as coal mining, improving methods for collecting and dissemi- railroading and meatpacking have declined nating new scientific and technological knowl- with disruption to commerce, business activity edge and innovations useful to Illinois indus- and labor markets in many places. Some com- try and agriculture. Effective communication munities deteriorated economically to the point systems using computer technology and other of becoming "depressed areas." instrumentalities should be developed so that The Commission recommends the establish- research findings in science and technology ment of a State program to assist communities may be placed in the hands of Illinois enter- whose economies have been depressed by tech- prise, universities,state agencies, and other nological changes in commerce, manufacturing, institutions. and agriculture. This State program should be integrated with Federal legislative enactments The Commission's recommendation to extend concerning area redevelopment, economic de- the life of the Illinois Commission on Automa- , velopment and trade expansion. State authori- tion and Technological ProgresS would provide ties should seek to derive maximum benefits a valuable and useful instrument for attaining from these Federal programs for the economic these goals. reconstruction of areas in Illinois that suffer from economic dislocations. SUBMITTED BY: Milton Brant Buddy W. Davis Morgan M. Finley Eugene Glover John A. Graham J. David Jones William Karp Chester P. Majewski Tont Merritt Larry S. ProvoBerta T. Rosander William J. Schoeninger James von Boeck- man John Clinton You le Paul A. Ziegler.

103 APPENDIX APPENDIX I The CreatingLegislation nois, and on the employment,training, retrain- HOUSE BILL NO. 1310. ing, economic change, economichardship, social implications and benefit toindustry, labor Approved August 18, 1965 and the public, and on the programs,policies, ,.. operations, finances and fiscalburdens of the AN ACT to create aCommission tO study auto- government of our stateand its subdivisions, mation and technological progress,defining its that have resulted and willresult from such powers and duties andmaking an appropriation changes. therefor. SECTION 4. In carrying out itsfunctions the Be it enacted by the Peopleof the State of Illi- Commission shall solicit thecooperation and nois, represented in the GeneralAssembly: help of the various industrial,commercial, pro- 'well SECTION 1. There is created aCommission to fessional, business, and labor groups, as which are concerned with study the economic andsocial effect of auto- as all other groups obtaining their mation and technologicalchanges in industry, the problem, for the purpose of providing commerce, farms, labormarket and in society, views, experience, and assistance in legislative hereafter called the Commission,consisting of direction for future study and such 5 members of the Houseof Representatives, action as may be necessary. TheCommission information, not more than 3 ofwhom shall be of the same shall further make full use of the political party, appointed by theSpeaker there- studies, and experience of the variousagencies of, and 5 members of theSenate, not more of the State and Federal'Government which problem. than 3 of whom shall be ofthe same political have considered various aspects of the di- party, to be appointedby the President pro The Commission is authorized to secure bureau, tempore thereof, and 5members of the public rectly from any executive department, appointed by the Governor, allof which ap- agency, board, cornmission,office or instrumen- pointments shall be made prior toSeptember tality of this State information,suggestions, this 1, 1965. The members of theCommission shall estimates and statistics for the purpose of bureau, serve withoutcompensation, but shall be reim- Act;andeach suchdepartment, office or instru- bursed for necessary expensesincurred in the agency, board, commission, performance of theirduties under this Act. mentality is authorized and directed tofurnish Vacancies shall be filled in a like manner as such information, suggestions, estimates,and original appointments. The Commissionshall statistics directly to the Commission upon its select a chairman and such otherofficers as it request. deems necessary for its ownmembership, and The Commission shall cooperate withState shall establish rules for thetransaction of its and local bodies, and other public andprivate business. bodies, to obtain information, suggestions, esti- purpose of this Act. SECTION 2. The Commission mayemploy mates and statistics for the and fix the compensation of suchtechnical and SECTION 5. The Commission shall report the clerical assistants as it deetns necessarywithout results of its study to the legislature no later time regard to the "Personnel Code", approvedJuly than January 7, 1967, and may at that 18, 1955, or any other law ofthis State con- submit proposed drafts of legislation recom- cerning State employment. mendations therefor. SECTION 3. The Commission shall study, in- SECTION 6. The sum of $25,000 or so much vestigate., analyze, and assess existing knowl- thereof, as may be necessary is appropriated to the Commission to carry out its duties under edge,problems,growth,effectandfuture tendency of automation and all othertechno- this Act. logical changes on industry, commerce,farms, SECTION 7. This Act is repealed on July 1, labor market and society of the State ofIl li- 1967. r

104 APPENDIX 2

.4 Witnesses

MEAT PACKINGINDUSTRY HEARINGS

Industry Hearings con- The following witnessestestified before the Meat-Packing and ducted July 14, 1966, bythe State of IllinoisCommission on Automation Technological Progress, in theHearing Room, GeneralOffices of the Metropolitan Sanitary District of GreaterChicago, 100 E. Erie St.,Chicago, Ill. 60611.

Regional Office, Bureau ofLabor ADOLPH 0. BERGER, regionaldirector, North Central Statistics, U. S. Departmentof Labor Stockyard and Transit Company *LARRY CAINE, director ofpublic relations, Union Illinois HON. JOHN E. CULLERTON,director of labor, State of House, Food & AlliedWorkers of *KERRY NAPUK, researchdirector, United Packing America, AFL-CIO Graduate School of Business, ARNOLD WEBER, PH.D., professorof industrial relations, University of Chicago Meat Packing Department, *JAMES WISHART, researchdirector, and GLENN SNYDER, Amalgamated Meat Cutters andButcher Workmen ofNorth America, AFL-CIO. orig- *Representatives designated bytheir organization to testifyin lieu of the representatives inally invited by the Commission.

testimony to the Commission The following individualsalso were invited to present 14, 1966, but they did notdo so. at the Meat-PackingIndustry Hearings on July Amalgamated Meat Cutters andButcher tPATRICK E. GORMAN,secretary-treasurer, Workmen of North America,AFL-CIO R. G. HAYNIE, president,Wilson and Company, Inc. & Allied Workers of America, 1RALPH HELSTEIN, president,United Packinghouse, Food AFL-CIO P. M. JARVIS, president,Swift and Company Company iCHARLES S. POTTER, president,Union Stockyard and Transit ROY STONE, vice pre.vident,American Meat Institute EDWARD W. WILSON,president, Armour and Company representative of appropriateorgani- iSee witnesses indicated by 0in list above for designated zation.

105 BANKING INDUSTRY HEARINGS

The following witnesses testified before the Banking Hearingsconducted September 15, 1966, at 10:00 a.m. by the State of Illinois Commission onAutomation and Technological Progress in Room 212, Illinois State CapitolBuilding, Springfield, Ill.

WILLIAM W. ALLEN, vice president, Oak Park Trust and SavingsBank DAVID E. CONNOR, senior vice president, CommercialNational Bank of Peoria JOSEPH J. MCANDREW, assistantivice president, First NationalBank of Des Plaines *PAUL STARKEY, review examiner, Banking Division,Department of Financial Institu- tions, State of Illinois ROBERT K. WILMOUTH, vice president, The First NationalBank of Chicago *Representative designated by his organization to testify in lieuof the representative originally invited by the Commission.

The following individual was invited to presenttestimony to the Commission at the Banking Hearings on September 15, 1966 at 10:00 a.m.but did not do so:

VOSEPH E. KNIGHT, director, Departrnent of Financial Institutions,State of Illinois tSee witness indicated by * in list above for designatedrepresentative of appropriate organization.

INSURANCE INDUSTRY HEARINGS

The following witnesses testified before the InsuranceHearings conducted Septem- ber 15, 1966 at 2:00 p.m. by the State of IllinoisCommission on Automation and Technological Progress in Room 212, Illinois StateCapitol Building, Springfield, Ill.

HOWARD FRICKE, Horace Mann Insurance Company JOSEPH W. GLYNN, vice president and comptroller,Continental Assurance Company *C. W. HALSEY, chief counselling deputy, Departmentof Insurance, State of Illinois LESLIE MIKKELSON, vice presidentaccounting,Sthte Farm Life Insurance Company A. C. VANSELOW, vice president and comptroller,Franklin Life Insurance Company *Representative designated by his organization to testifyin lieu of the representative originally invited by the Commission.

The following individual was invited to presenttestimony to the Commission at the Insurance Hearings on September 15, 1966 at 2:00 p.m.but did not do so:

1/0HN BOLTON, director, Department of Insurance,State of Illinois tSee witness indicated by * in list above for designatedrepresentative of appropriate organization,

106 i VOCATIONAL EDUCATION AND MANPOWER TRAINING HEARINGS

The following witnesses testified beforethe Hearings on Vocational Educationand Manpower Training Programs inRelation to Employer Requirementsconducted October 20 and 21, 1966 in RoomsM-18 and M-11, Drake Hotel,Chicago, Ill. 60611.

THOMAS AUGUSTINE, regional director,United States Bureau of Apprenticeshipand Training JOHN BEAUMONT, director, Divisionof Vocational Education *ALLEN BRIMM, chief of manpowertraining, Illinois Department of Labor '.1...Eo M. BURKEY, attorney, representingIllinois AFL-CIO JOHN M. COULTER, associate directorof research and statistics, Chicago Association of Commerce and Industry *WILLIAM M. FISHBACK, assistantchief of the Division of Downstate Operationsand acting superintendent of recipienttraining and education, Illinois Departmentof Public Aid *HERBERT HERMAN, chief, Bureauof Education and Training, Cook CountyDepart- ment of Public Aid *BENNETT HYMER, research specialist onemployment, Chicago Urban League *DR. ARTHUR R. LEHNE, assistantsuperintendent in charge of Vocational andPractical Arts Education, Chicago Board ofEducation THOMAS NAYDER, secretary, Cook CountyBuilding and Constru-Ction Trades Council *ROBERT I. SHACKFORD, deputydirector, Great Lakes Regional Office ofEconomic Opportunity JOSEPH SULLIVAN, Illinois StateSupervisor, United States Bureau of Apprengteship and Training and Cultural PAUL ZIMMERER, executivedirector, Mayor's Committee for Econonzic Development

*Representatives designated by their organization totestify in lieu of the representativesorig- inally invited by the Commission.

The following individuals also wereinvited to present testimony to theCommission at the VocationalEducation and Manpower TrainingHearings on October 20 and 21, 1966, but they did not do so. of tSAMUEL C. BERNSTEIN, employmentsecurity administrator, Illinois Department Labor tEDWIN C. BERRY, executive director,The Chicago Urban League E. EDGERTON HART, executivevice president, Illinois Manufacturers'Association tRAYMOND E. HARTH, president, StateConference of Branches of NA ACP (presentation was coordinated withtestimony of Chicago Urban League) 1THEODORE 0. JONES, regional director,Great Lakes Regional Office of EconomicOp- portunity WILLIAM A. LEE, president, ChicagoFederation of Labor and Inthistrial UnionCouncil, A FL-CIO ORMAND P. LYMAN, executive vicepresident, Illinois State Chamber of Conunerce tTHOMAS MURRAY, president, CookCounty Building and ConstructionTrades Council HON. RAY PAGE, .superintendentof public instruction (See listaboveJohn Beaumont)

107 Board of Education tDR. JAMESF.REDMOND,general superintendent, Chicago tREUBENG.SODERSTROM,president, Illinois State AFL-C10 REV. LYNWARD STEVENSON,president, The Wood lawn Organization tHAROLD 0. SWANK,director, Illinois Department of PublicAid +FRANKM.WHISTON,president, Chicago Board of Education Vocational Education Section, Port- HOWARD C. WIECHMAN,manager, Technical and land Cement Association tSee witnesses indicated by* in list above for designated representativeof appropriate organization.

108