in your testimony urging a Federal wage supplement for individuals employed in workshops, why could this not be accomplished by requir

the payment of the Federal minimum wage to these individuals? Mr. HARMON. That is the question that usually comes up on the part of the public. First of all, the Wage and Hour Act of course does apply to employment of handicapped individuals in workshops. It does provide however an exemption so that they can be paid according to their productivity as affected by their disability in relation to the going rates in the community.

Oftentimes this may work out to be only 50 cents an hour, 75 cents an hour, or $1 an hour. Anyone knows this is not alone enough to keep bly and soul together.

Suppose that you did say that each workshop should pay $1.60 an hour to everybody within that workshop. We have one member, Good.. that does this. We find on examination that this limits the level of d.sability of those served because after all the money has to come from somewhere. It has to come out of the production; it has to come out of the United States; it has to come out of individual gifts.

It is not enough to say to the workshop, "You should improve your production, raise your prices." We have tried this. We have done. this to the fullest extent we feel we can. We have attempted to pay the highest level wage, but this is not enough.

We know there is a need out there. Therefore, we feel the only answer is to provide some type of work supplement which is outlined in a specific recommendation in our testimony. We know that this could range in cost between $50 million and $100 million, but we believe that no money could be better spent.

We have some experience to go by. The training services program under the Vocational Rehabilitation Act has been in use since 1965. It provides up to $65 a week for an individual who is in a workshop going through a course of training. In my own conversations with Some of those individuals who have taken those courses, I have asked the question: Could you be here without it? The answer comes back: I would not be here, first; second, the fact that I am, enables me, through it, to make better use of my time. I do not have to worry about problems as to where the dollars are coming from to live.

We feel that many people are in workshops because the families support them, yet many people who do not have family support need this service just as well.

Senator CRANSTON. This is the second question from the minority staff director. To what degree do you believe the recently enacted Javits-Wagner-O'Day Act which came through the subcommittee, will be helpful in that workshops for the handicapped will now have special opportunities to receive Federal contracts for goods and services!

Mr. HARMON. We think that is an excellent piece of legislation which of course the chairman of this committee, Senator Randolph and Senator Javits were so actively engaged in, because it will provide some of the kind of work which is necessary to develop a person's ability.

We find subcontract work, is quite often the best way of getting a person placed in a job, for example, such as at Lockheed in San Jose. There we had an individual who came in there who no one had any hope whatsoever for, and after a short term there, in subcontract

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work, which related to similar work being done at Lockheed, he went over there and became one of the top persons in his department.

So we believe that this act will provide the work it takes to make a workshop. However, we do think at this stage of the game that there is much to be done on the part of the workshops in tooling up to get ready for it.

We pointed out in our prepared testimony this is where a strong Rehabilitation Act becomes exteremely helpful. The Wagner-O'Day amendment is rather slow in getting off the ground. A committee was finally appointed after a long time. The regulations are not yet written. So we have some problems, but we think it is going to offer a tremendous future to the workshops.

Senator CRANSTON. Thank you very much.

Can you give some examples of types of actual work done in the training aspect of your workshops?

Mr. HARMON. Those who would run from normal assembly jobs and contract work to what we call the used goods operation of Goodwill. In the latter the individual has an opportunity to work with material which is not quite as expensive, so if he happens to ruin it, there is not the problem as if he were working on a contract job. So that this type of work is useful. We do have a realistic work situation with an idea of the item being sold. It is something more than just taking some tests.

Senator CRANSTON. Can you name some specific activities you are talking about?

Mr. HARMON. You mean in terms

Senator CRANSTON. Work done in the training aspect and the specific product that would result.

Mr. HARMON. I can think of fishing tackle assembly contracts. Of course you are familiar with the process of taking a suit and putting the buttons back on it, repairing ít, and dry cleaning it, so that when it goes into the store it is a clean, usable piece of merchandise.

Senator CRANSTON. How does all this relate to later-on job activity? Mr. HARMON. This is the point I was making about the act. The on-the-job activity in the used goods could lead to a job working in a dry cleaning establishment or a laundry establishment.

The fact is that if you go through the routine of evaluation and work adjustment, this can be carried over into other job families, and this of course is done.

Of course again in subcontract work, which we have a growing amount of, this lends itself very specifically to learning a specific skill. However, I think that generally speaking the aim in the workshop is to get the person to the point where he can actually get to work on time, he can work with people, he comes out of his shell, so to speak. The skill training is, for example, more directly covered in one of the training service projects under the present act. There he gets not only the work adjustment, the evaluation, but, for example, instruction in the use of photographic equipment, accounting procedures in office work, we have two or three Goodwills using automated equipment. We have a growing number of skill areas, but not yet as much as we would like to have.

Senator CRANSTON. Does Goodwill, in working with State agencies, do evaluations of vocational rehabilitation clients?

Mr. HARMON. This is one of the most dramatic parts of the recent history of Goodwill. I pointed out in our testimony that it had gotten

to the figure of a total of $8 million in fees from State agencies back in 1970. Recent figures for 1971 show this is $10 million.

We in fact have one of the best working partnerships at the State level where the counselor makes use of our facilities. In fact in many places we have office space available for the counselor at Goodwill. You know there is a problem of loss of time, a problem of the individual getting to the service.

We feel that this type of working relationship with the counselor, so that the handicapped can immediately get counsel after his medical testing, psychological testing, all that, this can be put into effect. immediately.

Senator CRANSTON. What proportion of these Goodwill evaluated persons would you estimate end up being referred to a sheltered workshop Could you supply that for the record, if you do not have it? Mr. HARMON. I can give you some general figures, but perhaps I should give you more specific figures on it.

Senator CRANSTON. Fine. Would you also include in the material you supply for the record how many of your clients are military veterans?

Mr. HARMON. I am not sure we

Senator CRANSTON. If you have it available, we would like to know how many veterans you have.

If you could also supply us with information on what percentage of your clients are welfare recipients, how many receive social secuty, and how many receive supplementary incomes under other Federal or State programs, we would like to have that.

Mr. HARMON. We will supply that. I might point out this is an example of the outgrowth of one of the research projects funded under the act.

For the first time there is a computerized statement which lists under code names-and incidentally we have worked these out to coincide with the codes which RSA uses in its reporting systemso that we can as of the end of March, the first 3 months of this year, be very specific as to the numbers of people in each category of d.sability.

Senator CRANSTON. Thank you. If you would submit that for the record, I would appreciate it.

What needs to be done to upgrade the type of training modalities employed in workshops?

Mr. HARMON. I suppose the greatest problem always is to have adequate staff to do the necessary job. The supervisor, often largely concerned with the productive side, needs to have training, perhaps more than anyone else, if his attitude is to be appreciative of what the primary responsibility or aim of the workshop is

Senator CRANSTON. I was speaking mainly of what needs to be done in jobs at the lower levels.

Mr. HARMON. You are talking about the training of the individual? Senator CRANSTON. Yes.

Mr. HARMON. I think that the training services project where the workshop is asked, What do you need to do quality training, what kind of personnel, and then funds it through the project, is an exampe of the fact that if you do have adequate instruction, then the rate of placement is much higher.

We did find that we had to put placement people on the staff along

with all this because we could not rely on the normal placement sources. We have some specialists in this field.

Varied types of work are necessary in order to provide the kind of skilled training needed.

Senator CRANSTON. What percentage of Goodwill's clients leave the sheltered environment per year?

Mr. HARMON. Last year-perhaps you want an exact percentage on that. We do have the number that we place outside each year. Senator CRANSTON. Could you supply for the record the figure over the last few years?

Mr. HARMON. Yes.

Senator CRANSTON. Do you think it is a satisfactory figure?

Mr. HARMON. No; it is not satisfactory. We never are satisfied. Senator CRANSTON. Is a large proportion of your clientele severely physically disabled?

Mr. HARMON. It is, at a very highly increasing rate.

Senator CRANSTON. More and more are severely physically disabled? Mr. HARMON. One of the major problems is in the field of mental disabilities where we find that this is a group which a few years ago was not in such large numbers.

Senator CRANSTON. Could you also supply us for the record statistics on how many of those who are severely physically disabled are placed in nonsheltered employment?

Mr. HARMON. We can give you the figures for the first 3 months of this year in the categories.

Senator CRANSTON. Fine. Do your workshops lay major stress on removing the physical barriers there which might pose a difficulty to those in wheelchairs?

Mr. HARMON. They certainly do. In fact, we failed to hold our annual meeting at one hotel because they refused to meet our requirements in that area.

Senator CRANSTON. I am talking about in the actual workshop.

Mr. HARMON. In the actual workshop, again this is one of the places where the Vocational Rehabilitation Act has been helpful. Where we used to have old wornout rented buildings, we now have more adequate new buildings, ramps, wide doors, and halls-proper toilets.

Senator CRANSTON. Does any particular type of disability make up a major portion of your clients?

Mr. HARMON. Not at this time. I was looking at these figures last night, and they are probably almost equal in many workshops between the mentally handicapped and physically handicapped.

Senator CRANSTON. Could you provide for the record a breakdown of your clientele by general types of disability?

Mr. HARMON. Yes. That will be included in the general statement. Senator CRANSTON. What types of work are done on a contract basis? Mr. HARMON. Subcontracts provide types of work that are, first of all, simple assembly-it may be to take salvage sweepings and separate the usable stuff from it which the machine throws out.

Second, the more skilled requirement jobs. For example, in many workshops I am trying to think about some of the specific illustrations-we have photographic work. We have a number of workshops that can put out a printed book. We have other workshops that do electronic assembly work. It covers a pretty wide range of activity. Senator CRANSTON. Are any of your contracts with Government agencies, Federal, State, or local?

Mr. HARMON. We have had a small percentage, and that is where we hope that the Javits amendment will increase this.

Senator CRANSTON. Could you give us a detailed breakdown of what you do have for the record?

Mr. HARMON. I am not sure we can furnish the figures that would really be meaningful on that. We can try.

Senator CRANSTON. If you can give us some specific examples, it would be helpful. How have some of the Labor Department programs, such as the "Jobs '70's" program, been implemented within your workshops?

Mr. HARMON. I suppose our greatest disappointment has been with the various programs in the Department of Labor. It could have been our fault. It could have been their fault.

The fact is we have a small number of programs but nowhere near the kind of working relationship we have with HEW. This is true of the war on poverty program under the Office of Economic Opportunity.

One of the problems that has made this difficult has been this whole matter of wages paid in workshops. Under the Department of Labor project, the employer has so many individuals to be trained and emploved, and he pays the minimum wage as part of the project cost.

If we could get enough money in order to pay that much, we would do the same thing. I suppose again the different uses for this kind of facility are, of course, governed by the local community needs.

We have found that the greatest needs are in the area of service to the severely disabled. In fact, when we discussed this at one of the recent Goodwill national board meetings, it was agreed that the primary purpose of Goodwill Industries is to serve the severely disabled. There are a lot of other areas of service we could get in, a lot of things we could get into, but somebody has to serve this specific group, the severely disabled.

Senator CRANSTON. What role do the handicapped themselves have in policymaking and management of Goodwill Industries?

Mr. HARMON. I suppose you can say never do they have the roles that they ought to have. We have handicapped people on boards. We have grievance procedures that involve handicapped people.

Senator CRANSTON. How many are on the board actually?

Mr. HARMON. Probably one or two.

Senator CRANSTON. Out of how many? 50 percent?

Mr. HARMON. No. Probably out of 35 people on the board, two.
Senator CRANSTON. One or two, you say?

Mr. HARMON. Yes.

Senator CRANSTON. How many hold office in your organization? Mr. HARMON. What do you mean by "handicapped"? If you mean a person who has some kind of disability, then that is one thing. If he is handicapped by his disability, that is another.

Now, we have blind executives. We have wheelchair executives. We have many people not only on the board but throughout management who do have disabilities.

Senator CRANSTON. How many are on the staff of the workshops? Could you supply the figure for the record?

Mr. HARMON. We could probably give you an estimate. (The information referred to follows:)