students identify with programs in which they can be successful and to monitor their progress toward a job satisfying to the individual and useful to society.

How good are the programs? We really need a comprehensive national study. In the meantime, the Illinois Community College Board tracked some 27,000 occupational students from 1974 through 1977. Here are some results:

1. 97 percent employed.

2. 82 percent of graduates were pleased with the jobs they got.

3. 67 percent took jobs in the community college district where they were prepared a direct return to the community that helped finance the training program.

4. Students who completed two years or more of occupational preparation averaged $216 more per month than those with one year.

5. Some median salaries six months after graduation are:

Our own local follow-up studies of some 3,000 graduates, more than two-thirds of whom are minorities, show no substantial differences in full time placement among minorities as contrasted with majorities.

The community colleges accept the challenge of providing employment training in the 1980's to prepare minorities for white-collar employment. They are already doing it on a large scale. They can do it better for more of our people. The Federal Government can assist with full recognition of the community college role in legislation, eventually in an all-inclusive Community College Act, but currently in the vocational educational legislation, the Comprehensive Employment Training Act and the Higher Education legislation. Such recognition should take the form of:

1. Liberalization of financial aids legislation to accommodate the typical part time community college student.

2. Increased funding, preferably with substantial minimum level guarantees for community colleges in recognition of their expanding role in relation to elementary and secondary education on one hand and traditional higher education on the other.

3. Legislative support for increased community college involvement in the local planning, design, and operation of CETA programs through prime sponsors. 4. Increased direct Federal support for basic literacy training.

5. Substantial recognition of the maturity of community colleges through better community college representation in Federal and State administrative agencies such as was provided in Title X of the 1972 Educational Amendments.

A full slate of detailed legislative positions are currently being prepared by the American Association of Community and Junior Colleges.

Thank you for your interest in the students who make up the community colleges.

Representative BROWN. Professor Martin, thank you for your patience. We will see that you also get a reward for brevity.

STATEMENT OF DONALD L. MARTIN, RESEARCH PROFESSOR OF ECONOMICS, LAW AND ECONOMICS CENTER, UNIVERSITY OF MIAMI, MIAMI, FLA.; AND SPECIAL STAFF, NETWORK INQUIRY, FEDERAL COMMUNICATIONS COMMISSION, WASHINGTON, D.C.

Mr. MARTIN. I've got about 5 minutes; is that right? Thanks very much for inviting me to share my views with the committee this morning.

I'm going to be somewhat radical and try to stick directly to my prepared statement and I'll try to stay within the 10-minute limitation.

The prospects for higher employment rates for minority groups in the first half of the 1980's are threatened less by economic and demographic forces than they are by institutional ones.

If we can assume that the impending recession will be relatively short, if not mild, and that current efforts to slow the rate of inflation are successful, so that the period 1980-85 will be one of moderate real economic growth, employment rates for minority members of society should improve for at least two reasons:

First, the age distribution of the population is changing. By 1985, the slowdown in birth rates that began in the 1960's will produce absolute declines in the teenage labor force, 16 to 19 years of age.

It has been estimated that between 1980 and 1985, the teenage labor force will decline by as much as 14.1 percent.

For similar reasons the participation of young adults between the ages of 20 and 24 will also fall, though not as dramatically. Since these groups register relatively high quit rates, the decline in their imporance in the labor force should raise employment rate statistics generally, including those for minority groups.

This result is strengthened by projections that show a positive increase of 23 percent in labor force participation for the 35 to 44 age group.

Moreover, the decline in this decade in the participation of persons 45 to 55 should slow down in the first half of the 1980's. The last two demographic groups, 35 to 44, and 45 to 54, represent the most stable element in the American work force.

Thus, as the minority labor force matures, quit rates should fall and employment rates should rise.

The second positive element advancing the prospect of higher employment rates for minorities is the anticipated growth in human capital for these groups, that is in the educational content of that group.

In 1970, 57.2 percent of nonwhites completed less than 12 years of education, while only 36 percent of the white civilian labor force could be assigned to that category.

Estimates for 1985 suggest that only 38 percent of nonwhites will ave completed less than 12 years of education. The drop in this statistic is expected to be even greater for nonwhite males from 60.5 percent in 1970 to only 40 percent in 1985.

If we examine the projected educational achievements of minorities beyond high school, a similarly optimistic outcome is predicted. Almost 27 percent of nonwhite labor force participants will have completed 13 or more years of schooling by 1985, compared with 16.4 percent in 1970.

We may draw two conclusions from the anticipated improvements in minority group human capital:

First, the significantly higher fraction of minority group members staying in school in the 1980's will reduce the number of nonwhites in the labor force with a relatively low chance of securing employment. Poorly educated job seekers, in today's labor market, find it more difficult to attain employment than better educated job seekers.

The second conclusion focuses on the kind of jobs better educated workers are likely to obtain. It has been estimated that in the period 1980 to 1985, there will be a decline in the supply of persons to both

tunities appears to fly in the face of committee's interest in minority emp been triggered by the dramatically h enced by minorities in the last decade.

As we close out the 1970's, we do so ployment rates for nonwhites have ay In fact, nonwhite teenage unemplo cent during the same period, climbin lent white unemployment rates dur dramatically lower by almost 50 perce As we enter the new decade, unemp tinue to register at double-digit level only worsen these statistics.

What has caused these rates to be s about the barriers minorities face in Surprising as it may seem, the un alarmed all concerned Americans can to employment opportunities for mind Unfortunately, the statistics of the to minority groups, are grossly mislea This is so because, quite perversely flated by the work registration requ stamp program as it has been amend our aid to families with dependent amended in Public Law 92–233.

Unless otherwise exempt, would-be ents must first register as eligible for ment service.

These people are, however, involun less they find work, their numbers m All the evidence clearly shows that the to place more than 10 percent of wor

My colleagues at the University of Meiners, estimate that in 1976 the offic was inflated by as much as 2,023.000 employment rate was inflated by 2 pe

Of course, it is no secret that minority groups are heavily represented in both the food stamp program and AFDC. In June of 1977, 23 percent of food stamp recipients and 42 percent of AFDC recipients were nonwhites.

Clarkson and Meiners found that when they corrected the black unemployment statistics for involuntary work regulation, the unemployment rates for this group fell from 15.2 percent to 9.2 percent.

Interestingly, once white unemployment statistics were corrected for the work registration requirement, their unemployment rate fell by only 1.2 percentage points from 6.6 to 5.2 percent.

Although an unemployment rate of 9.2 percent may nevertheless be cause for concern, it is particularly striking to realize that Government programs can so distort unemployment statistics as to make them unusable for policy purposes.

The measured unemployment rate is not a policy variable to gage the employment prospects of minority groups or the height of barriers to jobs. In the 1970's, and soon in the 1980's, the unemployment rate is just as much a bureaucratic phenomenon as it is a manifestation of the marketplace.

In my opinion, the three most significant barriers to minority employment in the last three decades have been racial prejudice, poor education, and the minimum wage law.

The Civil Rights Act of 1964, together with dramatic increases in Federal, State, and local spending on education, have done much in the way of mitigating the most blatant abuses and wasted opportunities arising from the first two barriers.

Unfortunately, the minimum wage law, as it pertains to employment prospects for minorities remains perverse.

Over 40 years of experience with the minimum wage law has convinced the majority of economists that higher real minimums and expanded coverage contribute to lower employment. At the present time, the basic minimum wage is about 50 percent of the average, straight time wage in manufacturing.

Coverage extends to 84 percent of nonsupervisory employees in private nonagricultural industries. In 1974, coverage was extended to domestic workers and some agricultural workers are also covered by the act.

There have been countless studies of the effect of the minimum wage on a wide variety of variables including firm size, choice of production inputs, business failures, worker productivity, market shares, labor force participation, unemployment, employment and discrimination. Only the last four topics are of immediate relevance here. Before discussing the barriers to employment erected by the Fair Labor Standards Act and its amendments, it is instructive to inquire about the influence of minimum wages on measured unemployment.

Even if no worker were fired from his job due to a rise in the minimum wage rate and employers continued to hire at the same rate as before the minimum was raised, measured unemployment might rise, anyway, because the higher wage will attract new entrants to the labor force who would have otherwise remained at home or in school.

On the other hand, a rise in the minimum will cause employers to reduce the number of job openings they wish to fill. Would-be workers searching for jobs will find fewer openings per search period.

This is equivalent to a reduction in the probability of finding employment or a reduction in the expected value of finding a job.

Lower expected earnings will cause some searchers to drop out of the labor force, thus lowering the rate of unemployment. Once again, the measured unemployment rate is a poor index of employment opportunities. The minimum wage could either raise unemployment or lower

it.

As it pertains to minority group experience, recent evidence shows that minimum wage increases measured employed significantly for nonwhite males aged 20 to 24. Nonwhite teenagers also experience increased unemployment due to minimum wages, but the higher rates appear to cause this particular group, that is, nonwhite teenagers, more than others, to drop out of the labor force.

In my opinion, the minimum wage law not only narrows economic opportunities for inexperienced teenagers and adults with few skills and little education, it also narrows job opportunities for blacks and other easily identifiable minorities.

A floor on wage rates makes rationing jobs by discriminatory criteria more attractive since the wage criterion is prohibited. Significant employment reductions have been found to be associated with rising minimum wages and expanded coverage for nonwhite teenagers, nonwhite males aged 20 to 24 and nonwhite females 20 and over. The adverse employment effects of the minimum wage on teenagers is especially troubling. And let me cite some statistics on this.

Two economists, Finas Welch and Robert Cunningham from the University of California at Los Angeles, in studying the combined effect of the Federal minimum, State minimum wage rates and the expansion of coverage in the 1970's, concluded that the added cost of hiring 18- to 19-year-olds due to the minimum wage was 11.3 percent. Employment for that group fell 15.2 percent. It fell 26.9 percent for ages 16 to 17, and 45 percent for ages 14 to 15 years old.

Many of these young teenage workers receive on-the-job training, and acculturation to the world of work, through their first jobs. Since this type of training will be useful on other jobs, the initial and subsequent employers are reluctant to finance such training by themselves.

As a result, teenagers often contribute to their own on-the-job education by accepting lower wages. Rising minimum wages and expanding coverage prevents financial participation by younger workers, discouraging their employment and, more importantly, discouraging investment in on-the-job training.

Declining birth rates and rising educational achievements could make the decade of the 1980's one of enhanced employment opportunities for minority groups in this country.

The prospect for such opportunities has been improved by the decline of racial prejudice in the marketplace brought about by legal and social changes.

The one barrier that has not yet been assaulted is the minimum wage law. It is and will continue to be a significant bar to achieving employment goals for minorities as long as the minimum rate is raised and coverage of the law is extended to more and more sectors of the economy.

Thus, employment opportunities for minorities in the 1980's will be inversely related to the effectiveness of the minimum wage law.

Thank you.