Madam Secretary, the Labor Department has wide ranging responsibilities in the area of unemployment, support, in job training and placement services, workers' safety and health, protection of pension and welfare plans, black lung, and workers compensation. Its regulatory and enforcement activities touch the lives of all Americans. You have assumed an important job, and we urge you to pursue it with vigor.

Today, I would like to focus attention on what is happening in the American work force with particular emphasis on the urgent problems being created by the economic recession; 1 million people have lost their jobs in the last year, and unemployment is still rising at an accelerating rate. We hope the recession will be over quickly, but in the meantime, we cannot ignore the stark reality of long lines in unemployment offices and desperate people waiting up to 6 weeks to get their unemployment checks.

I might just note, I do not have it here in my remarks, but yesterday I was informed that the unemployment rate in Iowa went up 1 percent last month; 1 percent. For us that is 20 percent, from 4 percent to a little over 5 percent.

You have asked for a $100 million supplemental to speed up the processing of unemployment claims, and I commend you for that. Yet I understand the Labor Department now estimates a shortfall of $201 million. In the upcoming supplemental, we will address the funding need as fully as possible. Our concerns also must go beyond the immediate need to cushion the impact of joblessness. We need to look at the whole picture of worker dislocation, and how our programs can help those facing long-term unemployment. Unfortunately the President's budget request seeks a retrenchment in worker readjustment assistance at a time when the need is greater than ever. There are an estimated 4.2 million people who have lost their jobs due to plant closings and mass layoffs in the last 5 years, yet only a small fraction are being retrained.

Madam Secretary, there are other long-range problems that are just as real and just as urgent. According to a recent study, "America's Choice: High Skills or Low Wages," produced by a committee cochaired by former Secretary of Labor, Bill Brock, and Ray Marshall, average weekly earnings in the United States have fallen 12 percent since 1969. One-third of our front line work force is made up of school dropouts.

American employers invest less in worker training than most industrialized societies in the world. And 92 percent of the Nation's workers receive no formal training once they are on the job. This study proclaims that America may have the worst school-to-work transition system of any advanced industrial country resulting in millions of our youth drifting unproductively for years after leaving high school.

An estimated 70 percent of our future work force will not require a college education. And failure to address the needs of these workers could severely damage our Nation's competitiveness in world markets. The study warns that unless we take action and become a nation of high skills, we risk further declines in wages for the majority of our workers.

Madam Secretary, I know you are concerned, as we all are, about these problems. This morning's hearing will permit us to discuss

these problems and also to hear about your Department's funding requirements for fiscal year 1992.

PREPARED STATEMENT OF SENATOR ADAMS

Before we get into that, I would yield to the ranking member of the subcommittee, Senator Specter of Pennsylvania and other members of the subcommittee for any opening statement that they may wish to make.

[The statement follows:]

STATEMENT OF Senator BROCK ADAMS

I would like to welcome Secretary Martin. It's a pleasure to have you with us today. I regret that I must raise an issue with you that you have inherited.

As a Chair of the Subcommittee on Aging of the Labor and Human Resources Committee, I am very disturbed by the substantial funding cuts in the employment programs for older Americans which President Bush's budget proposes.

The President's budget calls for a more than 12 percent reduction in the Senior Community Service Employment Program (SCSEP) which is authorized by Title V of the Older Americans Act (OAA). This is the only OAA program categorically for low-income seniors.

For fiscal year 1991, Congress appropriated $390.36 million for the program, and the Administration proposes to reduce the funding to $342.814 million in fiscal year 1992. This would mean 7,805 fewer positions in the program nationally, from 64,405 jobs to 56,600. The State of Washington, my home state, will lose 131 positions (from 926 positions in program year 1991 to 795 positions in program year 1992). The notion of a "kinder and gentler nation" rings hollow when a program which provides part-time job opportunities for low-income individuals aged 55 and older is slated for such a substantial cut. The program currently provides employment for only about 1 percent of eligible low-income individuals. Why would we want to reduce that even further?

The proposed funding cut follows a recent reduction of 525 job slots (from 64,930 to 64,405) due to the increase in the Federal minimum wage in April 1991.

The Senior Community Service Employment Program is a very visible and successful program of the OAA. It authorizes enrollees to work in a wide array of community service jobs benefiting the general community. These jobs include social, health, welfare, and educational services.

A recent study supported by Families USA shows that the Senior Employment Program is vital to income security and the well-being of minority and low-income elders. The study, Part-time Employment for the Lower Income Elderly, provides strong support for the Title V program. The study concludes that the elders who seek employment through the Title V program are persons whose retirement incomes alone are not sufficient to lift them above the poverty threshold. Not only do the Title V jobs provide a crucial supplement to limited income for older individuals, but they also provide a crucial means to remain socially connected. For lowincome elders, both economic and social needs are partially met through Title V employment.

I am also disturbed by the lack of funding for another program which assists older Americans. That is the Job Training Partnership Act (JTPA). Older workers55 years and older-are eligible for training under Title IIA and Title III of the JTPA. According to the President's budget, the block grants authorized by Title II are maintained at $1,744.808 million. Consequently, no increases for cost of living were made for 1992. Although the President's budget proposes an increase of $12.385 million (from $514.601 million for fiscal year 1991 to $526.986 for fiscal year 1992) for Dislocated Worker Assistance (Title III), this increase will be largely offset if the Trade Act adjustment assistance program for dislocated workers is repealed as President Bush also proposes.

These proposed cuts in the programs which affect older Americans come at a time when our country is in a recession and many companies are downsizing and laying off workers. The Office of Management and Budget forecasts that in 1992 unemployment will linger as high as 6.6 percent. Unfortunately, older workers whose employment has been terminated face barriers to re-entry into the workforce that younger workers do not face. Because of age discrimination, many older workers suffer long periods of unemployment or never find another job. The hard economic times for

our country together with the practice of age discrimination portend very dismal employment opportunities for persons 55 years and older.

I would hope we reject these callous and ill-advised reductions. Secretary Martin, I look forward to working with you and hope the Administration will reconsider these proposed reductions.

OPENING REMARKS OF SENATOR ARLEN SPECTER

Senator SPECTER. Madam Secretary, I join my colleague, Chairman Harkin, in welcoming you to your first testimony before this appropriations subcommittee. I compliment you on your outstanding career in public service and on your confirmation by the Senate for this important job, and very much look forward to working with you.

The position of Secretary of Labor is always an important one, but I think never more important than in 1991. We are faced with a recession and faced with budget curtailments at many levels, and more than ever the need for self-help and employment opportunity in America so that people may care for themselves. The budget in this past decade, now my 11th year in the Senate, has been reduced very materially. And at a time of economic recession, there are an enormous amount of problems which grip the country and they are certainly evident in my stay.

At the top of the list are the problems relating to job training and the necessity for bringing the hard-core unemployed into employment. I have discussed this with you privately, and hope to work with you both on the record and off the record on many issues. But as I say, at the top of my list is the issue of job training. I was surprised, really shocked, a few years ago to see a headline in the Philadelphia Inquirer that Philadelphia was a labor shortage area in light of the fact that there are 300,000 unemployed people in the city. It is the need for job training-not just training for those people who are the easiest to train, but to provide training to the hard-core unemployed to solve the problem of labor shortages. And I believe it is a matter which requires leadership by Government with a heavy participation by the private sector.

In my judgment, from what I have seen after talking to many, many people and viewing the situation at many levels, there is a vital self-interest on the part of business America, corporate America, small business America, to provide job training, to find people to take care of important jobs. But it requires more participation by Government to provide the leadership and coordination. That is why I am hopeful that on these issues, where we have had some real national leadership by you and by Vice President Quayle, that we can get these flags of leadership flown and encourage people to undertake this line of activity.

And it is especially troublesome now with the recession, but I think the signs are hopeful with the end of the war, energy prices, oil prices are coming down, are down now. And I think we see sunshine fairly close, now, at the end of the tunnel.

There are many important issues that will be confronting you. The issue of mine safety is a very important one in Pennsylvania, the black lung claims, adjudication and administration issue, unemployment insurance administration, the Job Corps, the fairness of the National Labor Relation Board hearings, are all issues which

I would like to discuss with you both on the record today and off the record in the future.

As you know from years on the Hill in the legislative branch, we have to move around to many committees. I am going to have to excuse myself to attend a Veterans Committee meeting, where I am the ranking Republican. But I will return in about 25 or 30 minutes to take my turn at the questioning.

Thank you very much, Mr. Chairman.

Senator HARKIN. Thank you, Senator Specter.
Senator Hatfield.

OPENING REMARKS OF SENATOR MARK O. HATFIELD

Senator HATFIELD. Thank you, Mr. Chairman. Madam Secretary, I am also delighted to see you here, and welcome you to our committee. Just as sort of a brief opening, let me express a concern of mine, and then I may followup during the question period. The problem of retraining dislocated forest products workers is illustrated very graphically in my State. In Oregon, about 51 percent of the real estate is owned by the Federal Government-the largest timber-producing State in the Union, as far as housing materials are concerned. Federal policy governing the use of public lands in my State has a tremendous impact upon jobs, and the timber industry is a cornerstone of our economy.

Due to the changing character of Federal policy governing the utilization of that material, raw material, we find a significant reduction, probably over the next 5 years it will be about a 50-percent reduction. We have 80 communities in our State that have a one- or two-mill economy. So when you consider the indirect employment as well as the direct and the related employment, we have potential ghost towns in our State. We are estimating that the job loss will rise as high as 25,000 out of the 77,000 currently directly employed in the industry.

Therefore, I put a lot of focus on support for the dislocated worker, and would urge your attention to this particular issue. I urge your expeditious consideration by the Department of any applications for emergency discretion grants. I note, for the record, the Department recently awarded Oregon a $2 million discretionary grant under the title III program. In addition, I urge you to provide technical assistance, and a measure of regulatory flexibility as the State feels its way along, so to speak, in a new area. And of course, to perhaps look at some possible demonstration projects under title III. That is the thrust of my interest at this point, and I will reserve other remarks or other comments until we get to the question period.

Thank you, Mr. Chairman.

Senator HARKIN. Thank you, Senator Hatfield. And again, Madam Secretary, I want to welcome you here in your first appearance before this subcommittee. And as I said in my opening statement that I look forward to working with you this year. We are going to have a lot of problems with our budget, as you know, and trying to get our job done. I also want to thank you for sending your testimony up early, which I like to read over beforehand, and I appreciate that very much.

I would recognize, before we start, Senator Gorton for any opening statements.

Senator GORTON. Thank you, Mr. Chairman. No opening statement.

Senator HARKIN. Well, Madam Secretary, again, welcome to the subcommittee, and please proceed as you so desire.

SUMMARY STATEMENT

Secretary MARTIN. Thank you, Mr. Chairman. Two things-when I walked into the room, I wondered if perhaps the temperature was evidencing a coolness, but the warmth of your welcome indeed warms the spirit, and that is the important thing. Because I am relatively new on the job, you were kind enough to be helpful to me both at the committee and on the floor. I would like to say that I bring with me some of the assistant secretaries today, who have some direct insight into areas that I know members of this committee have some special views on. I thought it appropriate that they join me today. And even though this is traditional-as you know, members of legislatures are really very used to testifying by themselves, and so for me this is a little unusual to have these fine people with me-I would like to introduce them.

INTRODUCTION OF ASSOCIATES

The Assistant Secretary for Employment and Training, Bob Jones, who has spent a lot of time before your committee on the authorizing end, you know. Tom Komarek is the Assistant Secretary for Administration and Management. I also brought Jim McMullen, who is with our Budget Office. So that if there are particular questions I am not familiar with, they can help. I should also add, Mr. Chairman, that, for the first time that we know of, I have already recently testified before the Senate Budget Committee. The Department, for whatever reason, has traditionally not done that, but we are trying to make very sure that we are as open as possible to Members of the Senate and of the other body. Thank

you.

I would like to have my full statement entered for the record and just go to highlights, so we can better answer your questions.

I am pleased to appear before you, and again, thank all of you for the help you gave me. Mr. Chairman, I am also grateful for the solid foundation left to me in the Department by Secretary Dole and by her predecessors. During her stewardship, and she is my immediate predecessor, she built upon the actions of outstanding secretaries that had gone before her and moved the Department in many new and exciting directions. So it makes me extraordinarily fortunate to take the handle of a department which has such a rich history, and I believe has made a positive contribution to the lives of Americans.

It is our working men and women in factories, farms, ships, businesses, Government offices, health care facilities, schools, and everywhere else, who have been the backbone of the great economic machine that is America. We have built a democracy which continues to inspire mankind. During my years in public service, I have stood squarely in the corner of America's working men and women.