Mr. BATT. I am sorry we were cut off. I thought the Congressman and I would have an extension of time.

Mr. THOMAS. You were both enjoying it too much.

Mr. BATT. I would love to continue with you, Congressman. Mr. JENSEN. I would love to do it publicly, on TV if possible. Any time you can get the time I will be glad to meet with you.

PROJECTED ACTIVITY OF REVOLVING FUND

Mr. THOMAS. In the revision of your remarks, Mr. Batt, would it be possible for you to set out the probable cost projected for 2 or 3 years, not only your own cost but that of Labor and Small Business and so forth. Put it in the form of a table in the revision of your

remarks?

Mr. BATT. One table for 2 or 3 years?

Mr. THOMAS. Yes, Interior, Agriculture, Labor, HEW

Mr. BATT. All agencies involved.

be

Mr. BOZMAN. We can do it for 1962. I am not sure we can go yond 1962. There is no approval by the administration of any budget after 1962.

Mr. THOMAS. Your loans and grants.

Mr. BOZMAN. That much we can do; yes, sir.

(The information requested follows:)

AREA REDEVELOPMENT ADMINISTRATION REVOLVING FUND

Projected activity of the revolving fund

[In thousands of dollars]

Since this projection was made amendments to the Housing Act make it unlikely that this rate of reservation will be achieved.

Mr. THOMAS. Thank you very much, gentlemen.

TUESDAY, AUGUST 15, 1961.

DEPARTMENT OF LABOR

AREA REDEVELOPMENT ACTIVITIES

WITNESSES

JAMES J. REYNOLDS, ASSISTANT SECRETARY OF LABOR

ARYNESS JOY WICKENS, ECONOMIC ADVISER TO THE SECRETARY ROBERT C. GOODWIN, DIRECTOR, BUREAU OF EMPLOYMENT SECURITY

V. S. HUDSON, DEPUTY ADMINISTRATIVE ASSISTANT SECRETARY BLUE CARSTENSON, ASSISTANT TO THE UNDER SECRETARY, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE

W. P. BEARD, ASSISTANT DIRECTOR, VOCATIONAL EDUCATION, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE

Mr. THOMAS. The committee will please come to order.

We have with us this morning our friends from the Department of Labor. We are delighted to welcome Mr. James J. Reynolds, the Assistant Secretary of Labor; Aryness Joy Wickens, economic adviser to the Secretary; Robert C. Goodwin, the Director, Bureau of Employment Security; and Mr. V. S. Hudson, Deputy Administrative Assistant Secretary.

GENERAL STATEMENT

Mr. Reynolds, have you a statement for us? (The statement follows:)

STATEMENT OF JAMES J. REYNOLDS, ASSISTANT SECRETARY OF LABOR, ON LABOR DEPARTMENT AREA REDEVELOPMENT

A major objective of the Area Redevelopment Act is to provide job opportunities in those areas which have experienced substantial unemployment over a considerable period of time. Achievement of this goal calls for more than balanc

ing newly created jobs with available unemployed workers. It means that thousands of idle workers must have or acquire the skills which the new jobs will require.

For this reason, the act contains important provisions for the training and retraining of unemployed and underemployed workers so they may acquire the skills which available jobs demand. As we all know from our personal experience, training is always an important factor in the worker's ability to get a job and keep it. Rates of unemployment are usually much higher for those who are unskilled and untrained than for those who have skills in ready demand. In addition, trained manpower is essential to a healthy national economy with high levels of employment, production, and purchasing power. Thus the sheer necessity for us, as a nation, to take constructive remedial measures for the full utilization of our manpower resources is readily apparent at this critical time. Sections 16 and 17 of the Area Redevelopment Act vest in the Secretary of Labor specific direct responsibilities for seeing that the occupational training needs of workers in redevelopment areas are met insofar as available resources permit. These responsibilities include appropriate skill surveys of the areas to determine training needs, the testing and counseling of individual workers to determine their occupational potentialities and the selection and referral of such unemployed or underemployed individuals for training in vocational institutions, onthe-job, apprentice, or other appropriate methods of training. Provision is also made, in section 17 of the act, for the payment of retraining subsistence benefits to eligible workers receiving training. Such payments to individuals may not exceed 16 weeks' duration.

The Congress in enacting this legislation authorized the appropriation of an amount not to exceed $4,500,000 annually for the purpose of determining area and individual training needs and to assist in financing the actual training of qualified individuals. The Congress likewise, in section 17 of the act, authorized an annual appropriation of not in excess of $10 million for retraining subsistence benefits.

The Department of Labor is requesting approval, in its budget under consideration by your committee, that the amounts indicated by the Congress-$4,500,000 for the discharge of its responsibilities under section 16 and $10 million for the payment of benefits to workers under section 17 be authorized. These two amounts, plus $642,000 to cover the costs of disbursing benefit payments make up the total budget request of $15,142,000 sought for fiscal 1962.

In our opinion these funds are the minimum amounts necessary to tackle the pressing problems of these hard-hit areas which now, for the first time, have an opportunity to seek constructive solutions to the difficulties which have plagued them and their citizens for years.

Some magnitude of this task can be gained from the following: More than 700 labor market areas, rural counties, and Indian reservations have thus far been designated as redevelopment areas. Practically every State is represented.

In the 184 labor market areas certified by the Department of Labor as eligible for designation as redevelopment areas over 900,000 men and women are currently out of work. The average rate of unemployment in these areas is almost twice as great as for the Nation as a whole. In some especially hard-hit areas the unemployment rate has been averaging three to four times the national rate of unemployment which we all agree is still too high. More than 1 million non-farm workers, according to the Department's latest figures have been continuously out of a job for 6 months or more. Hundreds of thousands of additional unemployed or underemployed individuals are living in smaller communities, rural areas, and Indian reservations and are also covered by the provisions of the Area Redevelopment Act.

In the aggregate these workers-and these areas-make up the chronically economically distressed communities where typically the traditional sources of livelihood have disappeared. Workers have exhausted their unemployment benefits. Their prospects for jobs depend upon a revival of the local economies and their preparation through training or retraining to take new types of jobs which the communities hope to provide through the introduction of new enterprises, the expansion of existing businesses, and by other recovery methods. It is to this task of alleviating conditions of substantial and persistent unemployment and underemployment in economically distressed areas that the Federal Government, together with the States and the communities themselves, must now address themselves in light of the legislation the Congress has approved.

Our primary role in the Department of Labor is to assist the communities to come forward with programs of economic revival which will help their unemployed acquire skills and training so that they once more can be gainfully employed. This must of necessity be a cooperative effort. The Department of Health, Education, and Welfare will also be deeply and vitally involved since it is through their services, and the facilities of the State vocational school systems, that the bulk of the actual training will be undertaken. In other instances, as the act provides, the kind of training to be afforded will be apprentice or on-thejob training where the facilities of the Department's Bureau of Apprenticeship and Training can be effectively utilized.

All feasible sources and method of training will be used. The task admittedly is a large one, and candidly, its complete accomplishment should not be expected within the time and resources at our disposal. For example, the $10 million in retraining subsistence payments will permit but approximately 308,000 man-weeks of benefits. At an average weekly benefit of $32.50 for a training period of approximately 16 weeks-the maximum benefit period allowed by the law-approximately 22,000 jobless workers could expect to derive sustenance. To the extent shorter periods of training will provide adequate preparation, the number that can receive subsistence payments will be somewhat greater. But, in any event, the total number of individuals will be only a small fraction of the substantially more than 1 million unemployed or underemployed in these areas.

Nor are we sanguine that the $4,500,000 will permit us to appraise effectively the training needs of all the areas and individuals who deserve the opportunity to be selected for job training or to get the instruction and to have the school facilities required for accomplishment of the task that lies ahead. In order that the limited resources available under section 16 of the act can be used flexibly and prudently to the greatest advantage, we are requesting that the $4,500,000 permitted by this section be appropriated to the Secretary of Labor for allocation in accordance with needs to the various services of the Department of Labor and to the Secretary of Health, Education, and Welfare for provision of additional vocational education facilities and services.

I am confident that with the concurrence of your committee, and the Congress, the funds requested will yield satisfying and salutary returns, even if on a relatively limited basis. Such resources will unquestionably enable us to help many communities. More importantly, some thousands of workers-at long last-will now get an opportunity to lift themselves from the depths of despondency and the deterioration of their skills which, through no fault of their own, have cast a pall over their lives and their families for far too long a time. Accordingly, your favorable consideration of this request is respectfully urged.

EVALUATION OF SKILLS AND TRAINING FACILITIES

Mr. THOMAS. I notice you are looking for $15,142,000 to implement your jurisdiction and activities in the area redevelopment field, and you earmark $4,500,000 for training. I notice that is the exact amount some of our other friends wanted yesterday, and it is the exact amount set out in the statute. I just wonder if that is an easy figure to write, or what. I hope your breakdown is better for this $4,500,000 than the one we had yesterday.

Mr. REYNOLDS. The amount which the Congress placed in the statute for the administration of section 16 is $4,500,000. Our responsibilities under this particular section, Mr. Chairman, are to evaluate the job skills in these particular areas where economic distress has visited a particular part of the country, to make skill surveys in depth as to the available skills in the area, and to determine the skills that will be potentially needed in terms of an overall plan for the economic development.

Mr. THOMAS. I notice you go one step further with that $4,500,000. Not only are you going into the schoolteaching business, but you are going to buy some facilities and equipment. Where are you spending that money?

Mr. REYNOLDS. The facilities would be the responsibility of the Health, Education, and Welfare Department, Mr. Chairman. It would be our responsibility to evaluate the existing facilities to determine their suitability or their adequacy for the job which we conclude must be done, and then to make recommendations to the Secretary of Health, Education, and Welfare as to actions we deem necessary to be taken. The actual responsibility for those facilities and their administration will be that of the Secretary of HEW.

Actually, the $4,500,000, we feel, will be very tight to do this job, but it is what the Congress has stated is suitable for the job, and we shall make every effort to handle it within the limitations which have been set forth.

Mr. THOMAS. Let me read to you one paragraph. This is set out at page ARA-6.

Since no valid previous experience or advance knowledge of the trainee requirements of redevelopment areas exists, the dollar cost can only be estimated as requiring the full amount of $4,500,000 authorized in the legislation.

That is a pretty strong statement. We shall give you whatever you need. According to your own statement, you must be a little bit more definite.

Mr. REYNOLDS. Actually, Mr. Chairman, careful analysis of our responsibilities under section 16 of the statute supports the view that we would need considerably more than the Congress has given us here. Mr. THOMAS. On what do you base this?

Mr. REYNOLDS. We base this on the very careful study through our Bureau of Employment Security of the costs of making skill surveys throughout the Nation through the facilities of the various State agencies which will be employed for the task, the State employment agencies. To the best of our ability, actually to do our portion of the job would probably cost us in excess of $3 million.

INDICATION OF NUMBER OF UNEMPLOYED TO BE TRAINED

Mr. THOMAS. Let me read you another statement of yours concerning that thought, too. I also read from page 6:

Although it is not possible to estimate the precise number of individuals who will be considered for training and will be referred for occupational training courses, some overall indication of the magnitude of the unemployed and underemployed workers in redevelopment areas can be given. For example, in 184 labor market areas certified by the Department of Labor as eligible for designation as redevelopment areas, over 900,000 men and women are currently out of work.

Does that mean you will attempt to retrain all of these people?

Mr. REYNOLDS. No, I would hardly say that. The administrator of the statute has already, designated some 700 labor market areas, and the 184 are only the ones that we in the Department of Labor have certified to him under the criteria set forth in the statute. Additionally, you may recall, Mr. Chairman, under section 5(b) the Department of Agriculture and the Department of the Interior have responsibilities here, too

Mr. THOMAS. Everybody all over the place has responsibility. Mr. REYNOLDS. For determining the extent of unemployment in distressed areas. In these distressed areas, either we have the primary