Maid Power owner-operator profit and loss-Continued 2D YEAR OPERATION Income Cost of operation: Labor (employees only)--- Service agreement (10 percent). Total cost of operation----- Total profit------ Less financial expenses: Loan payment (6 percent; 25-year loan). Depreciation reserve for replacement of bus and equipment_-_. Total financial expenses-- Profit less financial expenses-- 18 maids at $1.65 per hour; 8 hours per day, 5 days per week. CAPITAL ASSET REQUIREMENTS Maid Power capital asset requirements $46, 234 127, 460 4, 623 5, 406 37, 489 8,745 1, 028 1,200 2,228 6, 517 8,500 7,500 Material handling equipment for dispensing supplies (includes washer and dryer for rags).. Maintenance, wash racks, and gasoline pumps for upkeep of transportation... Senator JAVITS. The hearings of the subcommittee will be closed. The record will be kept open through July 12 for statements and other documents ordered to be filed. (Whereupon, at 5:20 p.m., the subcommittee adjourned subject to call of the Chair.) APPENDIX PREPARED STATEMENT OF THE AMERICAN FEDERATION OF LABOR AND CONGRESS OF INDUSTRIAL ORGANIZATIONS When the AFL-CIO testified before this Committee two years ago we noted that the war on poverty would not be a new war for the American labor movement. Raising the standards of work and of life of all Americans has long been the primary concern of organized labor. The AFL-CIO is deeply committed, therefore, to the effort to make the war on poverty a success. In the less than two years since funds were first appropriated to implement the Economic Opportunity Act, Mr. Shriver and his associates have brought imagination, enthusiasm and hard work to their task. A good beginning has been made. What is more, as we stated a year ago, we are not dismayed by problems that inevitably have emerged. Mounting an all-out war on poverty is a difficult undertaking involving not only experimental and untried programs but also new and complex relationships between governments at all levels and between private groups. Since the effort launched by the Office of Economic Opportunity is a pioneer undertaking, it is appropriate and necessary that its progress and problems be periodically reviewed by the Congress and that desirable changes in the Act be made as experience dictates. Before discussing any of the proposed amendments, however, we must emphasize once again that the ultimate success of all O.E.O. undertakings-no matter how well launched and financed-is closely linked with the success of other efforts that also are a vital part of any all-out war on want. If poverty is to be reduced quickly and permanently, O.E.O. projects must be meshed with these other programs, particularly those that seek jobs at decent pay for the millions of working poor and those that seek adequate income-maintenance payments for millions of other impoverished families without a member in the labor force. While O.E.O. concentrates its major effort on education, counseling and job training-particularly in behalf of needy children and youth-and on a variety of other useful programs which seek to help break the poverty cycle, it must be remembered that more than half of America's poverty problem is directly related to the lack of enough jobs at decent pay. More than half of the poor families in the United States already have a member who is in the labor force; indeed, 30 percent are headed by persons with full-time, year-round employment. Millions of others are working on part-time jobs or are employed only a portion of the year. These are the "working poor" and their impoverishment is due mainly to low wages, under-employment or unemployment. The key to the solution of this major aspect of the poverty problem is essentially the creation of enough job opportunities, and at decent pay, to meet the needs of all Americans willing and able to work. We are greatly encouraged by the recent increase in employment. Yet, over 3 million Americans still remain jobless, the unemployment rate for non-whites is almost 8 percent-more than twice as high as the white rate-and the jobless rate for all teenagers is over 13 percent. The effort to ensure full employment must continue until it finally is achieved. To aid the working poor, the minimum wage and its coverage must be substantially improved. Moreover, unemployment compensation benefits and coverage must be updated to provide adequate family protection whenever workers find themselves deprived of jobs. A meaningful attack on the causes of poverty also must deal effectively with the vital need for adequate income-maintenance when old age or the absence of a breadwinner destroy a family's ability to be self-supporting. According to recent studies of impoverishment among Americans, about 20 percent of the poverty problem reflects the needs of the aged, most of whom are too old to work. In addition, among about 30 percent of our poor families the husband is disabled, dead or absent. While recent social security benefit increases and the enactment of Medicare are encouraging steps in the right direction, social insurance benefits are still far too low and the level of public assistance remains inadequate. In short, adequate work opportunities at decent wages for those who are willing and able to work and adequate income maintenance for those who cannot be self-sustaining are central to the success of any war on poverty. What is more, improved standards of health, of housing, and of general education, and the elimination of every vestige of racial prejudice are also essential parts of any meaningful war on want. As the AFL-CIO Executive Council recently pointed out in its Report to our Sixth Convention: "A successful campaign against poverty will automatically do more for America's Negros than for the population as a whole, because they are such a disproportionate number of the nation's impoverished families; although Negroes are about 10 percent of the population, they are some 20 percent of the poor. But more than that, by taking the necessary measures to reduce poverty, America will create the environment that can make possible an early end to the ugly fact of discrimination in American life." The record of important measures enacted by the Congress over the last five years that relate to the effort to eradicate want is heartening. Yet, even after five years of prosperity for most Americans and the achievement of a staggering production of wealth, 32 million of our fellow citizens still live in abject poverty and millions more hover at its fringe. In our judgment, even as we fulfill commitments in Vietnam and elsewhere overseas, we can and must work much harder to end dire want here at home. This is a national commitment that we have made; the American people are pledged to it. Yet, the resources we are allocating toward this purpose are altogether insufficient in terms of both the need and of our abilities. In turning to the specific proposed amendments, we shall discuss only those that we view to be most important. We are encouraged by the proposal in H.R. 15111 to increase the funds available for two of the anti-poverty programs that already have proven their very great worth-the Neighorhood Youth Corps and Operation Head Start. The special purpose of the Neighborhood Youth Corps is to help as many as possible of the more than 3 million young people aged 16-21 from impoverished homes to stay in school or to become usefully employed. It is noteworthy that young people in this age group now account for about one-third of the total unemployed. The response of needy young people to the opportunity provided by Neighborhood Youth Corps was immediate and has been sustained. The proposed new amendments would permit the Neighborhood Youth Corps more flexibility in increasing vocational training and would increase the authorized funds for the program during fiscal 1967. These steps are highly commendable, however, projects involving on-the-job training should be coordinated with the Manpower Development Training Act. The proposed increase in funds for Operation Head Start-through which several hundred thousands of the over 3 million poor children aged three to five are receiving educational, health and nutritional benefits-also is highly desirable. Yet, as in the case of the Neighborhood Youth Corps, the demand for funds for Head Start will probably far exceed the amount which will be available. Although the increased authorizations now proposed surely are moves in the right direction, we feel that even greater resources should be allocated for these two vital anti-poverty programs. We also commend H.R. 15111 for its proposal to expand the antipoverty effort geared to the special needs of chronically jobless and impoverished adults. Under this proposal, demonstration projects combining jobs-in areas of needed public service-with training, health aids and other special assistance for the long-term-unemployed poor would be undertaken. These "Public Service Employment Training" projects would be tailored to meet the requirements of men and women with competitive disadvantages that now prevent their employment by private enterprise. They would work at useful nonprofessional jobs that would help communities meet their backlog of public service needs-in recreation, health, education, public safety and other public and private nonprofit undertakings. These jobs, of course, should pay no less than the federal minimum wage and should be work that would not otherwise be performed. Moreover, in our judgment, since these are basically training projects, they should be closely meshed with the manpower programs administered by the Department of Labor. This kind of program to help the hard-core unemployed enhance their opportunity to become self-sustaining citizens was unanimously endorsed by the National Commission on Technology, Automation, and Economic Progress in its Report to the President five months ago. This kind of project also has been endorsed by many members of the Congress as one of the most promising undertakings in the war on want. We also commend H.R. 15111, for its proposal to extend the 90 percent federal contribution for Office of Economic Opportunity projects during the course of the present fiscal year. Experience has demonstrated that local organizations, particularly neighborhod groups, have substantial difficulty in raising their 10 percent matching share. Unfortunately, extension of 10 percent local matching is only proposed to June 30, 1967, and thereafter the House bill would increase it to 20 percent. It is likely, however, that such a proviso inserted into the Act at this time will discourage the planning of new programs, particularly those that are privately operated at the neighborhood level and closest to the poor. H.R. 15111 also proposes an amendment to the Act that would allow no more than 5 percent of total community action funds to be used for research, demonstration and training projects, in contrast to the 15 percent now allowed. Moreover, it is also specified in the House bill that the 5 percent also would have to cover the costs of two new proposed programs-to cure narcotic addicts and to provide emergency family loans. During the course of the last twenty months some of the greatest successes of the anti-poverty effort-such as Head Start, Foster Grandparents, and Operation Green Thumb-have evolved from funds available for experimental demonstration projects. What is more, training funds are of great importance in developing personnel competent to effectively serve in anti-poverty work. For these reasons we feel that the 5 percent limitation on expenditures for demonstration and training programs is inadequate. We also must express our concern about two other amendments incorporated in H.R. 15111. The proposal to arbitrarily limit to $12,500 a year the federal funds which may be used to pay any community action employee would be unwise in our judgment. Despite some just complaints about past salary payments, it should be recognized that complex skills and a high degree of talent are essential for effective anti-poverty executive leadership. In our view, O.E.O. should set realistic salary standards and take corrective action wherever appropriate. But to single out anti-poverty personnel for special treatment not applied to personnel under other federally funded programs is not a desirable or justifiable procedure. In addition, the proposal to add strict "Hatch” language to prevent political activity by any person "whose compensation is paid in whole or in part from sums appropriated to carry out this Act" is both objectionable in principle and probably unconstitutional. It can be argued that the interest of the government in maintaining a nonpartisan public service justified restricting the political rights of public employees. Yet, to argue, as does the House Committee Report in support of the proposed amendment, "that anyone who is compensated out of federally ap propriated funds occupies a position of public trust so close to that of a public employee that he should be required to act with political neutrality. . ." is an unreasonable proposition. Farmers receive federal compensation, as do doctors and federally supported researchers and scholars. Yet none of these private citizens are, or should be, barred from politics. And neither should private citizens who enroll in the war against poverty, so long as they remain private citizens. Under existing law, any ban on political activities extends only to public employees, and not to employees of a private institution or agency even though it gets public funds with which it pays its employees. Increasingly larger numbers of Americans are paid "in whole or in part" from sums appropriated by the federal Congress. If all of these people are to be barred from being active politically, increasingly more and more of our population will be eliminated from full participation in the democratic process. What is more, in our judgment it is highly unlikely that the Supreme Court would hold that persons who are not government employees should be barred from political activity, even though their compensation comes from federal appropriations. 65-922-66-33 The AFL-CIO finds it necessary to reiterate that in all jobs in work-related anti-poverty projects the highest standards should be maintained. This is necessary both to provide the best possible assistance to the poor and to protect the job opportunities and standards of other workers from being undermined. There are several basic principles that should apply: On all anti-poverty projects that involve work, enrollees should be paid no less than the federal minimum wage for each hour worked or the prevailing wage for comparable work, whichever is higher. As the AFL-CIO stated in its testimony in behalf of the Act two years ago, any lesser pay would involve "a concept which this country rejected a generation ago, that it is all right to pay starvation wages to people who desperately need money." We urged them, and we now urge again, that the term "appropriate and reasonable" as it applied to wage rates in the Act specifically be amended to start with the federal minimum and go up from there. The character of the jobs in work-related anti-poverty projects should involve work that would not otherwise be done, should involve no displacement of regular labor, and should not impair existing collective bargaining contracts. The operation of these projects, moreover, should involve no reduction of normal new hirings of regular employees or the normal expansion of the regular work force. It is our view that the Act should be amended in a manner that spells out specifically that these safeguards shall be rigorously applied both in behalf of the poor themselves and to protect members of the regular work force. Finally, we must express our deep concern that the war on poverty not be slowed down. In the scant twenty months since O.E.O. funds began to go to work, a large part of this program has been in the developmental or "tooling up" stage. Not only have the American people become aware as never before of the full extent of poverty in the midst of our affluence; we have begun to get to work as never before on programs to eradicate this cancer. Now is not the time to lose our momentum in this war. We must face the fact that many of the hopeful O.E.O. efforts are in, or only slightly beyond, the pilot operation stage. Most, as yet, operate in only a few of the 650 communities that already have set up active community action programs. Overall, only a small percentage of the 32 million poor have begun to receive assistance from any of the anti-poverty programs brought into being by this legislation. To make the already proven projects available to the millions of impoverished in communities already organized to begin to implement them and to those who live in additional communities that even yet are not so organized; to undertake new demonstration projects that may reveal additional ways to help the poor; to more adequately finance all Titles of the Act, more funds now should be provided. When President Johnson launched the war on poverty, he urged that it be waged unconditionally, "here and now". It is our judgment that the proposed $1.75 billion expenditure for the Economic Opportunity Act for fiscal 1967barely $250 million more than the expenditure for 1966-is far less than the American people are willing to invest in the pursuit of victory in this war. If, for lack of financing, the forward momentum of this war is lost and the reasonable expectations of the poor are frustrated, incalculable harm will be done. Therefore, as you review the proposed authorizations for all Titles of the Act for 1967, we urge you to insist that funds be made available that are more equal to the need. We would propose, at a minimum, a 25 across-theboard increase in all H.R. 15111 authorizations. PREPARED STATEMENT OF RICHARD W. BOONE, EXECUTIVE DIRECTOR, CITIZENS' CRUSADE AGAINST POVERTY We believe that the War on Poverty has already borne its first fruits. The Nation is finally becoming aware that amidst our unparalleled affluence there exist in the United States great numbers of poor people. Yet, the more that we come to know about poverty, the more apparent it is that our efforts have been miniscule compared to the size of the problem. As the Director of the Office of Economic Opportunity has stated on more than one occasion, only 5 million |