The federal government must undertake action to direct and speed the transitions of dislocated workers to new employment. Dislocated workers comprise only 1 or 2 percent of the nation's 11 million currently unemployed workers. Cyclical macroeconomic factors are responsible for the high unemployment rate, not structural factors such as new technology or changing patterns of international trade. The total number of manufacturing jobs is steady, although constant change occurs. Research does not indicate that a displaced worker will experience greater reemployment difficulties than another unemployed individual. The level of funding for supportive services to dislocated workers appears appropriate, but the funds should not be used for retraining in specific occupational skills in high technology occupations. Instead, the federal government should (1) concentrate on the problem of functional illiteracy and provide the prerequisites for skill training, (2) persuade the private sector to invest more in training their current employees, (3) train dislocated workers in job searching and career management, and (4) provide short-term assistance teams for communities experiencing large-scale employment dislocation. (YLB)