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The Public Employment Service HOW DO AMERICANS FIND JOBS? There are approximately 110 million people working for more than 5 million employers in the United States, and the nation's economy is expected to generate an additional 20 million jobs by the year 2000. In any given year, a substantial percentage of the work force turns over; median job tenure for workers at the end of their working life in 1978 was 14.9 years for men and 9.4 years for women (quoted in Ehrenberg and Smith, 1987~. A good part of the movement in the labor force is due to the natural progress of people's lives-entry into the world of work, career develop- ment, retirement. Less obviously, structural changes in the economy are reflected in employers' personnel needs, even as changes in the nature and preparation of the work force affect the ways business is done. In a labor market as large and complex as that of the United States, how do employers and workers find one another? Whatever the theoretical attractions of scientific selection, job seekers and employers tend to use informal methods more heavily than formal job-matching systems such as the Employment Service system, private employment agencies, or school placement offices. Table 3-1 summarizes a Department of Labor survey of the methods used by employers to recruit new staff. It is apparent that employers rely to a great extent on word-of-mouth methods including current employees, newspapers, and gate hires. People looking for work likewise depend to a great extent on informal methods, as illustrated in Table 3-2. 52

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THE PUBLIC EMPLOYMENT SERVICE 53 TABLE 3-1 Employers' Sources for Recruiting Personnel Recruitment Source Employers Citing This Source (%) Employees Newspapers Gate hires Applications Business associates Job Service School placement Private agency Community/welfare organizations Labor unions All others 54.0 45.0 37.0 34.0 27.5 27.0 15.0 9.0 8.2 4.6 2.7 SOURCE: U.S. Department of Labor. 1977. R&D Monograph No. 43. Employers and job seekers use more than one method to fill a job or find a job. The methods used vary widely according to occupation, location, condition of the economy, size of the employer, industry type, and skill level required. A "Help Wanted" sign in a store window may be adequate to attract a person qualified for the position of stock clerk. However, locating a petroleum engineer willing to work at a company's foreign site is far more complex. Some recruiting methods, such as internal promotions, employee referrals, and newspaper advertisements, are used for filling all types of vacancies. Other methods are more specifically tailored to particular types of jobs: for example, firms seeking professional and technical employees are likely to seek job candidates at colleges, universities, high schools, and trade and technical schools; however, walk-in applicants may well provide many employers with an ample supply of office workers and production/service employees. Through the Public Employment Service, government plays an active, though supplementary, matchmaking role in certain segments of the labor market. A Bureau of National Affairs survey (1988:7-8) indicates that the Employment Service is used more frequently to secure production or service workers (68 percent) and office or clerical workers (66 percent) than to fill vacancies in professional and technical (38 percent), commis- sioned sales (30 percent), or management (23 percent) work forces. This pattern of activity is replicated in the data provided to the committee by one state's Employment Service. Table 3-3 reports the percentage of job orders received by job category. In contrast, employers tend to turn to private employment agencies and other sources, according to the Bureau of National Affairs survey, to recruit professional, sales, and managerial candidates. Nationwide, the people who applied to the Employment

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54 BACKGROUND AND CONTEXT TABLE 3-2 Job Search Method Used by lob Seekers Job Search Method Percentage Using Each Method Applied to employer without suggestions or referrals Asked friends about: Jobs where they work Jobs elsewhere Asked relatives about: Jobs where they work Jobs elsewhere Answered newspaper ads: Local Nonlocal - Checked with State Employment Service (Job Service) Checked with private employment agency Contacted school placement office Took Civil Service test Asked teacher or professor for job leads Checked with union hiring hall Contacted local organization Answered ads in professional or trade journals/periodicals Placed ads in newspapers: Local Nonlocal Went to place where employers pick up workers Placed ads in professional or trade journals/periodicals Other 66 51 42 28 27 46 12 34 21 12 15 10 6 6 s 2 12 SOURCE: Bureau of Labor Statistics. 1975. Monthly Labar Review. TABLE 3-3 Percentage of Job Orders by Occupational Category for One State Employment Service Occupational Category Percentage Professional, technical, and managerial Secretarial and clerical Sales Domestic Service Agricultural Processing Machine trades Bench work Structural work Miscellaneous occupations 4 14 4 16 9 8 11 13 17

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THE PUBLIC EMPLOYMENT SERVICE 55 TABLE 3-4 Characteristics of Applicants for Employment Service Assistance Number Percentage Type of Applicant (millions) of Total Men 10.8 56.0 Women 8.4 44.0 Unemployment insurance claimants 7.0 36.5 Veterans 2.5 13.0 Economically disadvantaged 2.2 11.5 SOURCE: U.S. Department of Labor. 1988. Employment Service Program Letter, February 23. Service for assistance in finding work in program year 1987 numbered some 19.2 million. Table 3-4 provides detail on the nature of the applicants. Of the 19.2 million lob Service registrants, approximately 6.9 million were referred to employers and 3.2 million were placed in jobs. Total expenditures during the 12-month period were $749,931,143, which amounted to a program cost of about $205 per individual placed. HISTORICAL DEVELOPMENT OF THE PUBLIC EMPLOYMENT SERVICE Beginnings New York City established the first effective public employment office in 1834, which was followed in subsequent years by the establishment of municipal employment offices in other large cities. Late in the nineteenth century, the states of Ohio, New York, Illinois, and Massachusetts passed laws providing for a state employment service, operating offices in major cities in those states. Federal involvement in the employment process began in 1907, when the Bureau of Immigration and Naturalization established 50 local place- ment offices and a procedure for employers to post vacancies at immi- gration ports of entry to help find jobs for immigrants. In 1913 the Division of Information was organized in the Bureau of Immigration; its purpose was to find jobs for immigrants entering the country through Ellis Island. By 1914 there were 96 public employment offices in the country. The U.S. Department of Labor was established in 1916 and incorpo- rated the Immigration Service, including its Division of Information. In 1918 the need to recruit workers for war industries led to establishment of the U.S. Employment Service (USES) as a unit of the Department of Labor. During 1918 there were 773 local employment offices in operation.

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56 BACKGROUND AND CONTEXT Federal funds for the entire U.S. Employment Service were curtailed in 1920, and most of its local offices were closed. States and municipalities provided the few public employment services available during that period, and the U.S. Employment Service continued mostly in name until 1933. In 1930, Congress voted appropriations to open and maintain about 30 employment offices exclusively for veterans. The Doan Reorganization Act in 1931 established 129 offices with Veterans Placement Offices. In the depths of the Great Depression, the Wagner-Peyser Act of 1933 was passed, forging the present Employment Service system as a coop- erative federal-state venture. The act reinstated a U.S. Employment Service in the Department of Labor, and the Veterans Placement Service became a division of the Labor Department. The Wagner-Peyser Act made funds available to match state appropriations to establish state employment services under federal supervision. The actual organization and operation of the state employment services were placed under the administration of the states. Initially, the role of the U.S. Employment Service was to screen and place millions of workers into federally funded public works and job creation projects. The Social Security Act of 1935 established the nation's system of unemployment insurance. This was combined with the Employment Service in a system of state agencies and made registration with the Employment Service a condition of receiving unemployment benefits. The Federal Unemployment Tax Act (FUTA) provided for the funding for the system and also spelled out the Employment Service's role in its administration. An employer payroll tax was instituted to create a trust fund for the payment of unemployment compensation. This employer tax also supports the job referral activities of the Employment Service. Together with the Wagner-Peyser Act, FUTA defined the broad out- lines of the federal-state partnership in the State Employment Security System. During World War II, the Employment Service was administered federally to handle war labor needs, but in postwar years it was returned to the federal-state structure. During the 1940s and early 1950s, the Employment Service significantly enhanced its counseling and testing capabilities to improve its services to returning veterans and others. In the 1960s the Employment Service was enlisted in the Johnson administration's War on Poverty. USES policy emphasis shifted away from the mainstream work force to focus on people having difficulty in the labor market. The Manpower Development and Training Act of 1962 and its successor, the Comprehensive Employment and Training Act of 1973, focused on providing training opportunities for disadvantaged applicants. Although many employers took advantage of these training programs, there was a significant loss of placement activity during these years. Many

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THE PUBLIC EMPLOYMENT SERVICE 57 within the Employment Service system attribute this decline to a loss of credibility in the employer community due to the focus on the economi- cally disadvantaged rather than the mainstream work force. By the late 1970s the Employment Service had become a cornucopia of special programs, responsibilities, funding sources, and emphases that included labor exchange duties; gathering, analyzing, and disseminating labor-market information; and special programs designed for poor and disadvantaged people, employers, veterans, migrant and seasonal farm- workers, handicapped people, older workers, dislocated workers, and alien and migrant workers (including migrant housing inspection). Beginning in the mid-1970s the Employment Service saw a need to upgrade its negative public image as the "Unemployment Office." It was during this period that the name "job Service" became a new national symbol of identification. The Job Service was no less committed to assisting disadvantaged workers, but policy makers sensed the need to be more responsive to the entire public. The Job Service increased its efforts to improve working relationships with employers. State-level employer committees were established to help local Job Service offices respond more effectively to the needs of employers and job seekers. The number of these committees, now known as Job Service Employers Committees, has grown to 1,100 nationwide, involving some 30,000 employers at local, state, and national levels. The national organization, the Employers' National Job Service Committee (ENJSC), meets annually to address matters of national concern in employment and training, especially the Employment Security system. A steering committee of the ENJSC also conducts quarterly sessions to help guide and support local committees. The New Federalism The Job Training Partnership Act of 1982 marked a growing trend for decreasing federal control and increasing state and local involvement in determining the type of employment and training services needed for given locales. This act sought to strengthen the role of governors and of local Private Industry Councils, comprised largely of employers, in determining what employment and training services are needed and how, where, and by whom they will be provided. The act also made significant revisions to the Wagner-Peyser Act, expanding the role of governors and private employers in matters relating to unemployment and the develop- ment of a skilled work force. Under the amended Wagner-Peyser Act, the ~ The terms Employment Service and Job Service are used interchangeably in this report.

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58 BACKGROUND ID CONTEXT federal role is no longer specific and prescriptive; the act now provides that funds allotted to the Employment Service may be used for a variety of programs. Within this flexible design, veterans continue to receive priority services, in accordance with federal statutes. In summary, several major pieces of federal legislation significantly affect the employment security system. The Wagner-Peyser Act (as amended) provides for the national system of Employment Service offices and determines the distribution of funds for its administration. The Social Security Act (as amended) established the national system of unemployment insurance and set up the administrative funding mech- anism for employment security, including the Employment Service, through the Federal Unemployment Tax Act. Title 38 of the United States Code (as amended) and supporting legislation mandate that eligible veterans be given preference in all employment services pro- vided by the Job Service. The Job Training Partnership Act of 1982 provides for employment training for the economically disadvantaged and dislocated workers who become unemployed due to plant closing and mass layoffs. Other federal laws affecting the Employment Service include the Migrant and Seasonal Agricultural Worker Protection Act of 1983 and laws related to the Food Stamp Program, the Work incentive Program, and Alien Certification. Recent federal legislation, including the Economic Dislocation Worker Adjustment and Assistance Act, the Worker Adjustment and Retraining Notification Act, and the Family Assistance Act of 1988 will clearly affect the Employment Service in the future. Other federal legislation, although not directed primarily at the Em- ployment Service, has an erect on its activities. Most important, the Civil Rights Act of 1964, discussed in Chapter 2, has very specific implications for the state Employment Service system. To fail or refuse to refer for employment or otherwise discriminate against any individual because of race, color, religion, sex, or national origin is a violation of Title VII of that act. To rectify past discriminatory practices, affirmative action may be required of employers who seek applicants through the Job Service, particularly applicants who are members of a specific group that, for reasons of past custom, historical practice, or other nonoccupationally valid purpose, have been discouraged from entering certain occupational fields. When the Job Service is requested by an employer to assist with recruitment in such cases, the job order is identified as an affirmative action order and the specific needs of the employer are stated on the job order. In addition, applicants are informed that it is an affirmative action job order. Table 3-5 summarizes the federal laws affecting the U.S. Employment Service system.

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THE PUBLIC EMPLOYMENT SERVICE 59 TABLE 3-5 Federal Laws Affecting the U.S. Employment Service Legislation U.S. Employment Service Program Wagner-Peyser Act of 1933, as amended Job Training Partnership Act of 1982 Social Security Act of 1935 Federal Unemployment Tax Act (FUTA) Emergency Unemployment Insurance Compensation Act Federal Supplemental Compensation Act Special Unemployment Assistance Program Trade Readjustment Act Omnibus Trade and Competitiveness Act of 1988 Civil Rights Act of 1964, as amended Fair Labor Standards Act 38 U.S.C., Chapters 41, 42, 43 Veterans Employment, Training and Counseling Act of 1987 Immigration Reform and Control Act of 1986 Revenue Act of 1978 Tax Reform Act of 1986 Farm Labor Contractor Registration Act of 1963 Fair Labor Standards Act Occupational Safety and Health Standards Act Migrant Seasonal Agricultural Worker Protection Act of 1983 Rehabilitation Act of 1973 Older Americans Act Food Stamp Act of 1977 Employment Service (labor exchange); Occupational Analysis Field Centers; Test Development Field Centers; and State Test Research Units Special programs involving employment training; Dislocated Worker Program Unemployment Insurance (UI) system; Wagner-Peyser, and the Title 38 U.S.C. programs for veterans through the Federal Unemployment Tax Act Services, including UI, to individuals who are unemployed due to imports USES administration of services; Labor Exchange Administration; wages and child labor provisions USES involvement with the preferential treatment of military veterans in job training and placement ES involvement with alien certification, employment, and I-9 requirements ES responsibility for administering the Targeted Jobs Tax Credit Program at the state and local levels ES services to migrant/seasonal farm workers (includes inspection of migrant workers' housing) USES involvement with handicapped and older workers USES involvement with employment and training of food stamp recipients

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60 BACKGROUND AND CONTEXT Funding Levels Although the 1980s have brought many new responsibilities to the Employment Service system, during this same period massive cutbacks in funding have occurred. At the beginning of the decade, federally funded staffing for the U.S. Employment Service was 30,000, but current federally supported staffing nationwide is less than 17,000. These funding cuts put a premium on productivity and have led states to aggressively seek more efficient methods of operation for the Employment Service. Nevertheless, the system has been forced to close over 500 full-service offices and severely reduce its programs supporting counseling, testing, employer services, and related activities. STRUCTURE OF THE SYSTEM The Public Employment Service exists as a labor-market intermediary to help employers find workers and to help job seekers find work. It is a cooperative federal-state program that has grown over the years to include a network of 1,800 local employment offices administered by the states. In essence, the Employment Service serves as a "no fee" employment agency, or what an earlier generation called a labor exchange. Although there is great variety in plans and procedures from state to state, and indeed from local office to local office, the basic function of the Employ- ment Service system is to take job orders from employers, to take applications from job seekers, and to make referrals of applicants to employers. The Employment Service views itself in this role as an honest broker, providing employers with access to a larger pool of potential employees than might otherwise be available to them and providing job seekers access to information about many job openings at a single location. USES: The Federal Partner The federal part of the Employment Service system, the U.S. Employ- ment Service, is a division of the Employment and Training Administra- tion of the U.S. Department of Labor. It provides research and technical support to State Employment Service Agencies as well as program monitoring and fiscal oversight. USES has carried out a variety of research programs over the years. In 1939, USES produced the first Dictionary of Occupational Titles (DOT), the basic tool for matching workers with jobs that is now in its fourth edition. In 1947 it developed the General Aptitude Test Battery (GATB) and made the test available to the

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THE PUBiLiC EMPLOYMENT SERVICE 6] states for use in vocational counseling and employment screening. Ongoing research on the GATE is conducted through a series of Test Development Field Centers, and the Dictionary of Occupational Titles and occupational codes are maintained through several Occupational Analysis Field Centers. Although located at State Employment Service Agencies, these centers receive programmatic direction from the national USES office. The Employment and Training Administration oversees the adminis- tration of the Employment Service system through the USES national office and 10 regional offices. Guidance is provided to the states by the regional offices, primarily by requiring an annual plan from each state and then monitoring the state's activity. There is no specific instruction given as to how to accomplish goals and objectives: each state develops its own strategies to accomplish its plan, and there is much resulting diversity. State-Level Activities At the state level, the Employment Service is considered a major part of the State Employment Security Agency, which also administers unemployment insurance and labor-market information programs. Each State Employment Security Agency has its own particular character. Some are independent departments within state government; others are housed under the administration of higher-level or umbrella departments. All are staffed by state employees, but the specific organizational desig- nation and location are determined by individual state legislatures and governors. Even the names are different from state to state, as reflected in Table 3-6. These variations in organizational location of the Employ- ment Service within state governments add complexity to the federal- state partnership. The geographic and industrial makeup of the states further complicates the picture. Large population centers require different approaches to service delivery and mix than do rural or smaller urban areas. Agricultural employers require different services than manufacturing plants or govern- ment agencies. Agriculture itself is changing, as traditional family farms are replaced by agribusiness. The relationship of the unemployment insurance and the employment referral functions is also viewed differently by different states, resulting in variations in office structure and location. Some states operate two autonomous programs housed in separate local offices; other states combine management and location of the programs. Whatever the specific structure, statute and regulations mandate that services be coordinated and state work test requirements be met by the Employment Service.

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62 BACKGROUND AND CONTEXT TABLE 3-6 State Employment Security/Employment Service Agencies State Agency Title Alabama Department of Industrial Relations Alaska Employment Security Division, Department of Labor Arizona Department of Economic Security Arkansas Employment Security Division California Employment Development Department Colorado Department of Labor & Employment Connecticut Connecticut Labor Department Delaware ~ Department of Labor District of Columbia Department of Employment Services Florida Department of Labor & Employment Security Georgia Georgia Department of Labor Hawaii Department of Labor and Industrial Relations Idaho Department of Employment Illinois Department of Employment Security Indiana Department of Employment & Training Services Iowa Department of Employment Services Kansas Department of Human Resources Kentucky Department for Employment Services Louisiana Once of Employment Security Maine Bureau of Employment Security Maryland Department of Economic and Employment Development Massachusetts Division of Employment Security Michigan Employment Security Commission Minnesota Department of Jobs ~ Training Mississippi Employment Security Commission Missouri Department of Labor & Industrial Relations Montana Department of Labor & Industry Resources are initially allocated to State Employment Service Agencies on the basis of civilian labor force and the unemployment rate. State administrators allocate those resources according to local conditions. Administrative costs vary from state to state as well as within each state. Computer automation has begun to have an impact on organization and efficiency. The degree to which states have automated is variable, and there is no standardization in this endeavor, although USES has approved software packages geared to networking local offices and states together for the exchange of employment placement opportunities. Local Offices The 1,800 local Employment Service offices vary in size from one- or two-person operations to offices with dozens of employees. The locations vary from temporary trailers in remote areas to high-rise city offices, with each size and location attempting to be an efficient labor exchange

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THE PUBLIC EMPLOYMENT SERVICE 63 TABLE 3-6 Continued State Agency Title Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Puerto Rico Rhode Island South Carolina South Dakota r ~ ennessee Texas Utah Vermont Virginia Virgin Islands Washington West Virginia Wisconsin Wyoming Department of Labor Employment Security Department Department of Employment Security New Jersey Department of Labor New Mexico Department of Labor New York State Department of Labor Employment Secunty Commission of North Carolina Job Service North Dakota Bureau of Employment Services Employment Security Commission Employment Division Department of Labor tic Industry Bureau of Employment Security Department of Employment Security Employment Security Commission South Dakota Department of Labor Department of Employment Secunty Texas Employment Commission Department of Employment Secunty Department of Employment ~ Training Virginia Employment Commission Employment Security Agency Employment Security Department Department of Employment Security Department of Industry, Labor, and Human Relations Employment Security Commission serving the people and employers in that area as well as exchanging information with other offices and other states. The basic function of the local office is to match workers to jobs. Employers send or phone in job orders to a local office of their state Employment Service, specifying the type of jobs they need to fill; any special requirements for the job, such as educational credentials, work experience, or test results; and, if they choose, the number of applicants they would like the Employment Service to refer for each position. Each job order is assigned an occupational code drawn from the Department of Labor's Dictionary of Occupational Titles, which classifies jobs accord- ing to a scheme of broadly defined performance requirements. In day-to-day operations, it appears that the pool available to fill a particular job order is usually determined by the people who come into the office while the job order is current as well as any applicants who are in the office's active applicant file. But when an employer needs a large number of workers-for example, to put on an additional shift or to staff

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64 BACKGROUND AND CONTEXT a new facility-one or perhaps several local offices in a region will compile a large referral pool through advertising and file searches. People in search of work who register at a local Employment Service office are generally interviewed by staff who assess their qualifications, recording information about education, job experience, and preferences.2 In addition to being interviewed, a small number of applicants are given aptitude tests. On the basis of this information, one or more DOT codes are assigned to each registrant to reflect job experience. These codes are the major means of matching people to jobs, although the Employment Service interviewer will also decide who to refer on the basis of an employer's special requirements. In order to identify the most qualified available workers, the interviewer may also make additional judgments about the suitability of the individual registrant for the job. Local-office personnel may also provide a variety of other services in conjunction with state or federally mandated programs. This array can include providing a work test for claimants for unemployment insurance, Aid to Families with Dependent Children, food stamps, and other benefits. The work test is a process through which a registered applicant is offered employment (the criteria are specified by the regulations for each benefit paying agency). If employment is refused. loss of applicant benefits may result. -- r In addition, pursuant to Title 38 of the United States Code, the Employment Service extends preference to veterans, especially disabled and Vietnam-era veterans, in referrals for jobs and other services. Employment opportunities for veterans are enhanced through the Federal Contractor Job Listing Program, the Targeted Jobs Tax Credit, and the Veterans' Job Training Act. The local office may also provide specialized services for youths, people with handicaps, minorities, women, older workers, released prisoners or parolees, and others who may be disadvantaged in the job market. This may include special drives promoting the hiring of Vietnam- era veterans, cooperative arrangements with schools to serve dropouts and high school seniors planning to enter the labor market, and cooper- ative efforts with military recruiters to try to interest young people in the various branches of the Armed Services. There may also be occasional needs for special recruiting, such as recruiting workers with hard-to-find skills for employers who have vacancies and are unable to fill them. Recruiting can be done locally, within the state, and across states. The office may also recruit seasonal 2This report uses the generic term counselor to refer to the positions of interviewer and counselor in the Employment Service system.

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THE PUBLIC EMPLOYMENT SERVICE 65 and year-round farmworkers needed by farmers and food processors. To the extent that resources permit, local offices will provide specialized services for migrants and seasonal farmworkers. The Employment Ser- vice office may have to certify that employer-provided housing meets standards when workers from other states are recruited. A staff member may have to make random checks to determine if working conditions are as specified. The office may also recruit and select qualified job seekers for referral to openings in other areas when local offices in those areas are not able to fill the openings from the local labor supply. A major activity of Employment Service offices is to provide occupa- tional and labor-market information and data for myriad purposes: for unemployed workers for their job search purposes; for employers in planning recruitment, in considering a plant location, and in marketing plans; for employment and school counselors in assisting applicants in need of counseling and career guidance; for school administrators to assist in curriculum planning and for vocational schools in determining occupations with reasonable prospects of employment; for administrators in human resource program planning; for classification of service delivery areas according to level of unemployment; for economic development planning by regional commissions and other planning bodies; for devel- opment of affirmative action plans; and for Employment Service planning to help reduce the impact of mass layoffs. An office may also engage in research. For testing, the task may be to participate in collecting information used in developing aptitude and performance tests that are valid for job seekers, including minority job seekers. For occupational analysis, the local office may complete on-site observation and job analysis in order to describe occupations not covered or covered by obsolete descriptions in the Dictionary of Occupational Titles. The more current information can then be made available nation- wide for use with job seekers by employers, schools, government agencies, and other users of occupational information. For specific federal programs, a local office may have to prepare preference certificates for and obtain new-hire reports from employers in areas with high unemployment who agree to hire a certain percentage of disadvantaged workers and meet other criteria for contract preference. The office may have to complete the preparation of appropriate forms under the Immigration Reform and Control Act, as well as process alien labor certification applications and forward them to the Department of Labor for final action. When required, a local office will establish prevailing rates of pay through salary surveys and/or testing of the labor market through job orders and advertisements. The office also may have to provide certification of applicant eligibility and vouchering under the Targeted Jobs Tax Credit Program.

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66 BACKGROUND AND CONTEXT As this brief description suggests, the activities that engage the local Employment Service offices cover a tremendous range. The constraints of limited resources, especially cutbacks in staffing during the past decade, have made the conduct of these activities extremely difficult. OPERATIONS AT THE LOCAL LEVEL Local Employment Service offices across the nation are as diverse as the communities they serve. The previous section listed services that may be available through local offices. Because of constraints in funding as well as conscious decisions related to labor-market needs, each office will differ in the mix and degree of services offered. Because each local office coordinates its plans with its Private Industry Council and local elected officials, this alone may cause wide variances in service mix and delivery from one local office to another. To provide a context for the issues discussed in this report, in this section we provide a common profile of the local Employment Service office and describe three prototype local offices. Our purpose is to give a general picture of what happens when a job seeker comes to an Employment Service office. Taken together, the three separate local office environments explored are a sampling of the various operational procedures used to provide the same basic service. Activities Common to All Offices Job seekers register with their local Employment Service office by providing information about their work history, skills, education, train- ing, and employment interest. Employers list job openings by providing information to the local office about the job, including a detailed descrip- tion of the work involved, minimum screening requirements, and referral instructions. This information is matched, using varying degrees of automation. Selected applicants are called in, and referrals of qualified applicants are made to the employer. The ratio of referrals made to openings received depends on employer specifications, or the available pool of qualified applicants, or both. The basic function of every local office (all other legislative responsibilities notwithstanding) is the recruit- ment, screening, selection, and referral of job applicants to employers. The Employment Service does not make the hiring decision. Every local office maintains a Job Information System, which enables applicants to peruse the lists of open job orders, albeit without employer identification. The job openings are listed by DOT job category and are presented in a number of ways. In some offices the lists are compiled in loose-leaf binders; in some the system is automated; in some the lists are available over the telephone. Most state agencies still require that an

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THE PUBLIC EMPLOYMENT SERVICE 67 interviewer conduct screening prior to making specific referral informa- tion available to the applicant. However, some states are beginning to provide nonsuppressed listings (employer's name and application infor- mation provided) for applicants' self-service use. Employer relations are promoted at the community level by each local office. Depending on available resources, personal visits and promotional telephone contacts are made to employers to solicit job orders and to inform employers about the services available. Since the system is funded through employer taxes, and since service to applicants depends on employers' willingness to list openings, this is a crucial aspect of the local once operation. Marketing strategies are localized to match the activities available in the local office. In other words, if the GATE is emphasized, then the benefits of test selection are promoted to the employer commu- nity. Conversely, if relatively few applicants are tested, then the local office uses programs other than testing to promote the Employment Service. Job Service Employers Committees, developed over the past 16 years, assist by advising local offices on how they can better serve the community, as well as by promoting use of the system to other employers. Every local Employment Service office has statutory responsibilities with regard to veterans. Preferential service to veterans is clearly defined by Title 38 of the United States Code. Furthermore, Public Law 100-323 increased the number of Local Veteran Employment Representatives and clarified the roles and relationships between federal and state personnel. The Employment Service's responsibility to veterans represents an exception to the flexibility with which local offices administer programs. Within this common framework there is enormous diversity among the local offices~iversity in size, in program emphasis, and in the human and other resources available. The profiles of three local office operations that follow illustrate this point. Profile One: A Traditional Office Local office one is in a medium-sized metropolitan location. The work-force population is over 300,000 and the employer population is 13,000. A total of 84 percent of the employers have fewer than 10 employees. The employment makeup is varied, with a high number of service jobs as well as a good diversity of manufacturing and industrial jobs. There is also a great deal of white-collar employment in the immediate metropolitan area. Due to the high volume of intake, applicants are received by appoint- ment only and are scheduled for group orientation, or intake, usually within two to three days after the appointment is made. Veterans are given priority service. All applicants fill out an employment application,

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68 BACKGROUND ID CONTEXT including personal and work-related information. Personal information is primarily collected for the identification of target groups (e.g., handi- capped, economically disadvantaged, veterans) and for labor-market information reporting. Job registrants who wish to file for unemployment insurance are assigned to an unemployment insurance group session following registration for work. Veterans are assigned to separate intake groups for employment registration, but they file for unemployment compensation with the general applicant population. During the group intake, applicants are identified for special services that may be available, including counseling, testing, or other programs deemed appropriate. Typically, each applicant completes the group intake process; speaks briefly with an employment interviewer for the assignment of DOT occupational codes and to determine if a job order is currently listed for which the applicant is interested and qualified; and then is released. Occasionally applicants are referred to jobs on the spot, but usually job referral comes in the form of a call once the applicant's DOT code is matched to an open job order that comes in after the applicant has registered and is in active status in the files. For applicants with special needs (e.g., applicants with handicapping conditions, disabled veterans), counselors will make job development contacts with likely employers. Testing is conducted on a very limited basis in this office, due to the limited staff available for test administration. Employers who use GATB testing have all applicants tested before they are referred. Applicants considered for referral to these employers are scheduled to take the GATB. Testing is not actively marketed to the employer community. Applicants who demonstrate difficulty in making occupational choices, changes, or adjustment decisions are referred to the employment counselor, who uses the GATB for diagnostic and assessment purposes. Those tested represent a small percentage of the overall applicant flow through the local office. Profile Two: A VG-GATB Office Local office two has geared its entire operations around the adminis- tration of the GATB. This is referred to as the "full-blown" approach to testing. Group intake is conducted as in local office one However, in this local office, which is located in a small town with a strong base of manufacturing employment, all applicants are encouraged to take the GATB. Similarly, activities involving employer relations center around the promotion of test-based job referrals. Local-office staff time is spent to a large extent on test administration. The GATB, which takes approxi- mately two and a half hours to administer, is given twice daily, four days a week. Test scoring and job matching are automated. About 75 percent of all applicants are given the GATB. The reasons applicants give for not taking the test range from handicap limitations or

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THE PUBLIC EMPLOYMENT SERVICE 69 literacy problems to a simple refusal to take any test. These applicants receive normal services without benefit of test selection. With such a strong emphasis placed on testing, however, there are few resources left to serve these applicants. Profile Three. The Single-Employer Office The third office profiled is located in a rural area. There is one major manufacturing plant in the area, and the local office primarily serves that employer. The skill and education levels of the applicant population are generally low. Turnover is high in the area, particularly with the major employer served; entry-level job orders with this employer are virtually constant. The local office is highly automated. Applicants and job orders are placed in the computer and are automatically matched, using any number of variables, for referral. The VG-GATB program was adopted statewide as the primary screen- ing and selection tool to be used by local offices, but this local office requested to discontinue the full-blown approach due to the strain on staff time. The local office manager felt that it was not a significant tool, considering the labor-market and labor-force makeup of his service delivery area. Unlike larger offices (such as local office one), where specialists serve different applicant needs, staff members in local office three are, by necessity, cross-trained to handle all applicant and employer needs, including unemployment insurance administration. Implications of Local-Office Procedures The offices briefly profiled above illustrate how heterogeneous the Employment Service system must be if it is to be responsive to local labor-market needs. Although the goal of all local Employment Service offices is essentially the same, each office works within the framework of the individual state's philosophy of employment service and the needs of the local economy it serves. This report evaluates one particular plan for Employment Service operations, which we call the VG-GATB Referral System. No matter how attractive VG-GATB referral turns out to be in general, its suitability for any particular focal office will necessarily depend on local conditions. The decision on whether or not to adopt test-based procedures is made at the state and local levels. Although this report can help federal and state officials arrive at some basic decisions about the future of the VG-GATB Referral System, the ultimate determination will no doubt come from 1,800 local-office administrators concerned with the practical management of available resources.

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PART II ANALYSIS OF THE GENERAL APTITUDE TEST BATTERY In order to answer the questions posed by the Department of Labor, the committee took as its first task a thorough examination of the General Aptitude Test Battery itself. Chapter 4 summarizes the development of the test, describes its component subtests, discusses its reliability and convergent validity, and compares it with other test batteries. Chapter 5 discusses in detail several shortcomings of the GATE that need immedi- ate attention if the test is to become the centerpiece of the Employment Service system: problems with test administration, the highly speeded nature of the test and its consequent vulnerability to coaching, and the paucity of available test forms and the test's consequent vulnerability to compromise.

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