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d Labor Committee, point to a Congressional intent that was ar more concerned with equitable allocations based on total employment than with considerations of severity.

This argu

ent appears particularly persuasive, since Congress authorized ection 6 specifically to deal with areas with high rates of employment. The Senate, which had included a severity fac

or in its bill, accepted Section 6 as a fulfillment of its oncern about the severity of unemployment.

The double formula introduced by the Department has reated a marked disparity in the funding of various states Table I illustrates some of these differences.

nd cities.

*Labor Department data on cities disaggregated by state employment agencies from labor market area data. The figures are for May 1971, the date used in making the Section 5 allocation.

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V OPERATION OF SECTION

Congress included Section 6 in the Act to provide funds specifically for counties, cities and areas with excessively high unemployment rates (over 6.0 percent).

The importance of the term "area" is critical in assessing the Section 6 program. The Labor Department's Guidelines stipulate that applications "will include a specific definition of the areas to be assisted and the basis upon which these recommended areas were selected."1

In any city where

the over-all unemployment rate exceeded 6 percent, the Program Agent still was obliged to select and specify those neighborhoods or other special "areas" in which unemployment was particularly high, or at least identifiably higher than other areas under the sponsor's jurisdiction.

The Department's Regulations require that where a city or county experiences an unemployment rate over 6 percent and where the rate in sub-areas within that city or county is appreciably higher, the sub-areas will be recipients of greater amounts of Section 6 funds. No section of a city or county receiving funds under Section 6 which has less than 6 percent unemployment is to provide employment for participants. Nor should funds be spent to hire participants in any sub-area which has less than 6 percent unemployment.2

1. Guidelines Section 6 IV D.

2. Guidelines Section 6 III B Eligible Areas.

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Malcolm Lovell, Assistant Secretary of Labor for Manpower,

is quoted as having said in August 1971 that "preference will be given to programs where area residents serve their own neighborhoods." This would have been a most laudable approach

to utilization of the Section 6 funds. However, there is no evidence, either in the Section 6 proposals or in the information from the Urban Coalitions, that a preference was given by the Department or that Program Agents tried to develop such a program.

The proposals and the local survey instruments indicate that in most of the cities involved in this study, no effort was made, nor was any system established, to introduce an area emphasis for Section 6 programs, where the entire city or county had an unemployment rate above 6 percent. Nor is there any indication that attempts were made to recruit area residents for jobs that would serve unmet public service needs in their Own neighborhoods.

The proposals and surveys show that, where designated areas received Section 6 funds, participants were selected or were being selected from the designated areas of highest unemployment. In those cases where the entire city was designated to receive Section 6 funds, only one city indicated that target areas were defined on the basis of severity of unemployment or that participants were being selected from these areas as required in the Guidelines.

76-736 72 - pt. 5- 34