As commissioner of the Social Security Administration, Bruce Cardwell oversees 84,000 federal employees working across the country. Their jobs more directly affect the lives of more Americans than those of any other federal agency. In this segment of a conversation with Haynes Jonson, Cardwell gives an appraisal of his agency today.

No other agency har enjoyed a better reputation for general efficiency of operation, sensitivity to the public interest, than Social Security. The image always has been it was an agency that had a considerable esprit, a good feeling about itself, a healthy self-respect. I don't think that's any longer true. I don't want to be pessimistic about it, but I doubt that it's healthy today.

I think what is occurring is the result of a multiplicity of very complex developments in and around the agency. One of them is Watergate, and the general public dissillusionment with and cynicism toward government in general. Others involve such things as the rapidity with which new assignments have been given Social Security; the complexity of those assignments, the failure to appreciate the complexity of those assignments by the agency itself and by the people who made those assignments in the legislative and executive branches.

But also there's the theoretical - and to me it's not theoretical, it's real - change in the attitude of the American work force toward what they want out of and from work.

The concentration of so much of the agency's work in urban areas - and I've got to be careful how I say this because it could seem offensive to a lot of people - but it's highly probably that these urban areas no longer produce through their educational systems workers who are really qualified to do the work required. Yet they're the only workers you have. And those workers have now been mixed in with the original workers. Today, they're probably dominant. They just behave differently about their work . . .

Then the federal classified system - how you pay people, what you call them, how you title them - which was devised many years ago and reached its peak in the 1940s and 1950s, hasn't changed. It hasn't kept pace with these demands. Agencies like Social Security have a problem because that outside system determines what salaries they can pay, whom they can pay, what titles they can apply. The general working conditions under which they work have not kept pace with the changing fabric of the American work force.

Just take the union movement.The government doesn't know anything about government-management relations. It'd made one mistake after another. Today a supervisor of 100 people doing repetitive work should know something about management-labor relations. He should know something about how to motivate people, why people behave as they do, know something about the process for dealing with disciplinary problems. It's very complex. He isn't up to his job. And he isn't up to his job because the people you can hire for those salaries haven't been prepared for those jobs.

I'm not trying to indict anybody but I really think it's a very serious problem. And it's a problem we're really going to pay for down-stream.