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CHARLES E. BENNETT, Florida, Chairman WILLIAM J. RANDALL, Missouri

BOB WILSON, California RICHARD C. WHITE, Texas

FLOYD D. SPENCE, South Carolina ROBERT H. (BOB) MOLLOHAN, West Virginia WILLIAM L. ARMSTRONG, Colorado JAMES R. JONES, Oklahoma

ROBERT W. DANIEL, JR., Virginia PATRICIA SCHROEDER, Colorado

GEORGE NORRIS, Counsel

(II)

HOUSE OF REPRESENTATIVES,
COMMITTEE ON ARMED SERVICES,

SEAPOWER SUBCOMMITTEE, Washington, D.C., Wednesday, September 18, 1974. The subcommittee met, pursuant to recess, at 10 a.m., in room 2212, Rayburn House Office Building, the Honorable Charles E. Bennett (chairman of the subcommittee) presiding.

Mr. BENNETT. The subcommittee will come to order. Our first witness this morning is Mr. William Hewitt, Associate Manpower Administrator, Department of Labor.

I understand you are going to address us on the question of manpower matters.

STATEMENT OF WILLIAM HEWITT, ASSOCIATE MANPOWER

ADMINISTRATOR, DEPARTMENT OF LABOR Mr. HEWITT. Yes, sir. Mr. Chairman, members of the committee, I welcome this opportunity to appear before the Subcommittee on Seapower and present the Department of Labor's views on what actions can be taken to meet the rising demand for workers in the Nation's shipyards. The merchant and naval vessels that will soon be on the ways are important to our economic well-being and to our national defense. The Department of Labor assures the subcommittee that it will lend its assistance in helping find solutions for the problems associated with the buildup of shipyard resources, including manpower, needed to construct these ships.

Maritime Administration data indicate that the total tonnage of large merchant ships on order in commercial shipyards in the United States has increased each year since 1970.

According to Marad, 50 ships were on order in 1970 with a total tonnage of 1,400,000. In 1974, 89 ships were on the order books with a total tonnage of 4,019,000—nearly a threefold increase in tonnage. The Maritime Administration estimate for 1975 is that a total of 85 ships will be on order, but that total tonnage of these ships will jump nearly 25 percent in a single year to 4,984,000.

Significantly, a number of these new ship orders relate to energy needs. For example, Newport News Shipbuilding & Dry Dock Co. announced a contract signed in June of this year to build three ultralarge crude carriers. At 390,700 tons each, these will be the largest ships ever constructed in the United States.

Concurrent with the large scale increase in orders for merchant ships, demand for construction of naval vessels remains substantial. More than 60 ships, including the most sophisticated types, are on order in commercial shipyards. Some of these ships—including one nuclear carrier and a number of destroyers and submarines—are not yet under construction in the yards holding contracts. We understand from the Navy that during fiscal year 1975 they plan to ask for bids on an additional 24 ships, including destroyers and submarines.

(1163)

Given the rising tonnage of new commercial ships on order, coupled with continuing demand for new naval construction and the manpower requirements associated with these, it is easy to appreciate the concern of this subcommittee with the effect of potential manpower shortages.

Bureau of Labor Statistics data indicate that the average monthly employment in shipyards for the first 6 months of 1974 was the highest in more than a quarter of a century--that is, since the immediate post-World War II year 1947. This surpassed even 1966 which was considered a good year.

BLS data also show a monthly average of 147,100 workers in shipbuilding and repair for the first 6-month period in 1974. This represents a gain of 9,300—or 6.7 percent-over the same 6-month period for 1973, when average monthly employment was 137,800. This figure also exceeds by_2,800—or 1.9 percent-employment in this same period in 1966. However, it falls short of the 1947 monthly average of 158,800 for this same period by 11,700. Unquestionably the anticipated increased volume of new ship construction mentioned earlier will require additional manpower. This will necessitate a major stepup in recruitment activity, as well as other manpower oriented efforts

. In discussing the various means for manning the Nation's shipyards, it is instructive to review the labor turnover experience of the shipbuilding industry. Unfortunately, too little attention is given to this very costly aspect of maintaining a qualified work force on any activity. BLS data for the months January through June 1974 indicate that an average of 28 out of every 1,000 wage and salary workers quit their jobs in the shipbuilding industry each month-or nearly 50,000 workers a year. Over one-third of the monthly average employment in the industry could be lost this year due to workers voluntarily quitting their jobs. The quit rate in shipbuilding was over 20 percent greater than the rate for all manufacturing industries during the period and 40 percent greater than that experienced in the durable goods manufacturing category--in which shipbuilding is classified. Obviously a concerted effort by the industry to reduce the quit rate would very significantly reduce costly recruitment and training activities and could go far in enabling shipyards to adhere to shipbuilding schedules.

As one looks at the various potential causes of these high labor turnover rates, the pay scale in the shipyards emerges as possibly one of the principal contributing factors. Wages in the yards do not compare favorably with those of the construction industry which competes directly with the shipyards for many closely related skills. Hourly earnings in the shipyards averaged $4.81 during the first 6 months of the calendar year 1974. The comparable figure in construction was almost $2 an hour higher. Apparently, as job opportunities at higher wages become available in construction they attract qualified shipyard workers. This compounds the manpower recruitment and training problems in the shipyards.

This problem of competition for the same skills may be eased at least for this year. The construction industry may not prove to be such a dynamic competitor in the labor market in 1974. Construction activity is not expanding as strongly this year. As a matter of fact, monthịy employment in the industry is holding fairly steady compared with a year ago.

During testimony before the subcommittee, Admiral Gooding stated that shipbuilding is a labor intensive enterprise, and that the amount of labor required to build ships cannot be substantially reduced by automation, although we are aware of a number of technological improvements over the years. For this reason, among others, the availability of qualified workers will remain critical to the building of new ships, and I would like to outline the resources of the Department of Labor which can be used to recruit, train, and place workers in shipyards.

The Federal-State employment service-a nationwide system of over 2,500 local public employment offices provides services to jobseekers and employers, including job development, placement, recruitment, and related supportive services. We expect both public and private shipyards will continue to use the employment service as a source of available workers with shipyard skills, or related skills which could be modified for use in shipyard work.

Mr. BENNETT. Does every State have that?
Is that available in all States?
Mr. HEWITT. Yes, sir.

Mr. BENNETT. We had testimony that somebody didn't feel they had it in their States.

Mr. Norris. That was in apprentice training.

Mr. HEWITT. Local employment offices are in all the larger and middle sized cities in every State of the Union.

The Employment Service has responsibility for collecting information on State and local labor markets, and for operating job banks, which are daily updated listings of all job openings listed with ES offices in individual labor market areas or, in some instances, in entire States. Information on applicants available for occupations utilized by shipyards, together with job openings received from employers by local ES offices, is collected by the ES through the Employment Service Automated Reporting System (ESARS). This information is available both on a national basis and by individual State. As an example of the types of information available, during fiscal year 1974, 4,822 marine mechanics and repairmen registered for work with local ES offices throughout the country. During this period, these offices received 2,298 openings from employers for persons with these skills; 1,067 of the openings in this classification were filled around the country.

To cite another example, during fiscal year 1974, 83,142 applicants who had the occupational classification of plumber, pipefitter, or steamfitter registered with the ES. During the same year, there were 31,796 openings in this classification, and 19,567 openings were filled. This provides some indication of the scope of the ES capability to meet the needs of shipyard workers and employers. We would be happy to make additional, more detailed data available to the subcommittee.

As an example of ES operations in a local labor market, we requested three ES offices to summarize their recent experience in dealing with supply and demand for shipyard workers. The labor market areas selected include the sites of three naval shipyards proposed by the Navy for new ship construction. The Bremerton, Wash., office which serves the area in which the Puget Sound Naval Shipyard is located, reports a continuous demand over the past 1%

years for highly skilled workers, including machinists, boilermakers, pipefitters, and marine electricians. Between October 1973 and April 1974 the Bremerton ES office was able to secure 750 skilled workers for shipyard jobs through local and interstate recruitment in Florida, Michigan, Minnesota, California, Montana, Wyoming, and Texas.

The Philadelphia office report is that the Philadelphia Naval Shipyard is receiving work which was originally scheduled for the now closed naval shipyards at Boston, Brooklyn, and Hunters Point. The yard is actively advertising for skilled workers and has placed job orders with the ES. The ES, in turn, is supplying qualified applicants to the shipyard. A large private shipyard located in Chester, Pa., is meeting its demand for workers through its own training classes and through manpower training classes funded locally under the new Comprehensive Employment and Training Act of 1973.

The San Francisco-Oakland ES offices covering the Mare Island Naval Shipyard report no recruitment problems for shipyard workers at present or in the anticipated near future. Employment in private shipbuilding in the area peaked at 4,000 in 1969 and has been declining from 1970, primarily because of the wind-down of the Vietnam conflict. Private hiring is being done through unions. In Government shipbuilding, there has been no employment at Hunters Point Naval Shipyard since April 1974. Mare Island employment currently stands at 9,000, up from a low of 6,000 in 1973. Some Hunters Point employees have been hired at Mare Island.

The major vehicle for the Department of Labor's manpower training effort is the Comprehensive Employment and Training Act of 1973 (CETA). Title I of CETA provides for a decentralized, decategorized revenue-sharing type manpower system in which the primary decisionmakers are prime sponsors who, for the most part, are States and units of general local government of 100,000 population or more. Operating within a set of general guidelines contained in CETA, these prime sponsors analyze local manpower requirements and employment needs of jobless workers, and formulate programs to deal with these interrelated factors.

Title II of CETA authorizes a program of public service employment and other manpower services for areas of substantial unemployment. Title III sets forth the Federal role in CETA. Under title III, the Secretary of Labor has broad discretionary authority to provide manpower services to segments of the population which are in particular need of such services. However, the legislative requirement to continue funding programs of demonstrated effectiveness, as well as mandated national programs for migrant and seasonal farmworkers, Indians, and others, limits the Department's capability to take on new commitments from this source.

There are several ways in which CETA can be related to the shipyard manpower needs. Good jobs in search of workers is music to the ears of manpower program managers. Prime sponsors under CETA are almost certain to be aware of shipyard needs in their areas and normally would be expected to include them as a valuable source of good jobs for their manpower program clients. If necessary, the Manpower Administration will strongly encourage the State and local prime sponsors to give priority to the needs of shipyards in their

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