This report addresses the degree to which retraining has met the challenge of ensuring that the American work force has adequate skills to cope with the changing world of work. Chapter 1 sketches economic, social, and technological changes that help explain why the current reactive approach needs to be more active. In chapter 2, the extensiveness of permanent job loss is discussed with particular emphasis on the correlates of prolonged unemployment--lower levels of education and training. Chapter 3 reviews data relevant to the retraining initiatives begun under the Job Training Partnership Act. Chapter 4 deals with the skills and capacities that employers regard as essential now and in the future to allow their employees to maintain and increase productivity and thereby prevent obsolescence. Chapter 5 investigates efforts of employers and institutions to remedy the situation, in terms of educational and training programs and learning opportunities made available to employees. The final chapter summarizes results and discusses critical issues that require attention. Specific suggestions are provided for desirable features of retraining programs and desirable aspects of organizational development. (SK)