DESPITE RECORD PEAKS IN EMPLOYMENT AND PRODUCTION, THE ECONOMY IS FAILING TO UTILIZE FULLY THE POTENTIAL OF ITS MANPOWER RESOURCES AS COMPARED TO THE 1950'S. IN 1965, THE EMPLOYMENT OF MEN BETWEEN THE AGES OF 25 AND 64 WOULD HAVE BEEN ABOUT 725,000 HIGHER IF THEY HAD WORKED AT THE RATE WHICH EXISTED FOR WHITE MEN IN 1951-53. THE GAP BETWEEN THE ACTUAL AND POTENTIAL EMPLOYMENT REPRESENTED A LOSS OF ALMOST $7 BILLION IN GROSS NATIONAL PRODUCT. TWO-THIRDS OF THE EMPLOYMENT GAP, 484,000, WERE CAUSED BY A HIGHER PROPORTION OF MEN OUTSIDE THE LABOR FORCE. THE REST, 238,000, REFLECTED HIGHER UNEMPLOYMENT. THE DECLINE IN THE UTILIZATION OF NONWHITE MANPOWER PERVADED ALL AGE GROUPS. OLDER MEN BETWEEN THE AGES OF 55 AND 64 ACCOUNTED FOR TWO-FIFTHS OF THE EMPLOYMENT GAP. EDUCATIONAL DIFFERENCES ARE ONE OF THE FACTORS OF MANPOWER UTILIZATION. POORLY EDUCATED WORKERS WILL HAVE GREATER DIFFICULTY IN FINDING WORK AND ADAPTING TO CHANGE AS LABOR FORCE EDUCATIONAL LEVELS RISE AND TECHNOLOGY REACHES NEW LEVELS OF COMPLEXITY. AN EXPANDING ECONOMY GENERATING EMPLOYMENT OPPORTUNITIES IS NOT ADEQUATE TO SOLVE THE PROBLEMS. ACTION IS NEEDED TO ATTRACT THOSE WHO ARE NOT CURRENTLY IN THE LABOR FORCE. FURTHER USE OF MANPOWER DEVELOPMENT AND TRAINING ACT PROGRAMS COULD RESTORE OLD AND DISABLED WORKERS TO THE PRODUCTIVE ROLE. DISCRIMINATION MUST BE ELIMINATED. BECAUSE SOME FACTORS IN UNEMPLOYMENT ARE STILL UNKNOWN, POLICY APPROACHES MUST BE FLEXIBLE AND RESPONSIVE TO NEW INFORMATION RELATING TO INDIVIDUAL NEEDS AND CAUSES OF LABOR FORCE BEHAVIORS. (FP)