that I used are the figures that we have taken from the plan itself, this plan is doomed to failure. Only 22.4 percent of the welfare clients served will obtain unsubsidized employment. This very low job placement rate, something I am sure that this committee and certainly we have never envisioned, is apparently permitted under the act.

One recommendation that I wish to put into the record is that the testimony of this subcommittee hearing in this city may be used as a basis to cover up some of these holes in the national plan. Los Angeles County actually plans to fail 78 percent of the welfare recipients to whom it provides job training services.

While this plan may be within the legal parameters of JTPA, it is clearly bankrupt. It is an obviously inefficient use of scarce job training resources. The Los Angeles County plan forecasts the waste of nearly $5.5 million, more than three-quarters of the money available for training adults in the Los Angeles County service delivery area. These dollars could be used and directed to more productive job training, either by targeting funds to necessary services that will give people the tools they need to succeed in the world of work, or by selecting from a larger portion of the economically disadvantaged community those most likely to succeed in terms of their need and be job-ready within the service areas.

This waste is not only a disservice to the individuals themselves, it's a disservice to the system; it's a disservice to the law and certainly it's a disservice to taxpayers.

Seventy-eight percent of the welfare participants will receive nothing from this plan but a false promise of economic opportunity. At best, these people will wind up back on welfare; at worst, they will be driven back into the streets. This plan does not train people for jobs and it does not get them off welfare.

How did this happen? JTPA gave the Federal job training money to the Governor and the State job training coordinating council to parcel out among the services delivery areas, but it gave the State administration very little quality control over job training plans. Now, I am certain that the members of this committee will look to all of those of us at the State level to effectively administer these Federal funds. But we do not have the tools that we need, gentlemen, and I think that what we are digging into here this morning is an example that you should take its being a bit more pervasive than it might appear at the moment because our digging around in our information tells us that there are county welfare directors in other areas of this State who are watching very closely what happens as a result of Los Angeles County's action. We know of six counties that, if there is the slightest hint that this at least will not be denounced by Congress or a congressional committee, or if there isn't some attempt made to change it or to alter it, we have very valuable information that we have confidence in that there are six counties that are going to duplicate what Los Angeles County has done.

So what we are seeing is just the beginning, not an isolated incidence now, but not to remain that way unless you and we and other persons who are concerned with this say, "This is not what was intended and this is not what we'll be delivering."

Basically, as long as Los Angeles County shows that it can adequately administer the funds and plans to serve a few specified portions of the unemployed and economically disadvantaged population, the State must give them the JTPA money. Because of the free startup year and the 2-year planning process, we predict that it will be at least 2 and perhaps 3 years before the State job training coordinating council is in a position to say, "No, this plan is unacceptable because it does not put people to work on jobs in the private sector."

At the State level, in the Family Economic Security Act, we tried to create a strong and truly coordinated State training council. While we provided for flexibility in planning job training, we established the direction and priorities by statute. FESA, by contrast with the Los Angeles County plan, gives first priority in job training to unemployed parents and other recipients of aid to families with dependent children. Focusing job training in this way has the added advantage of removing a whole family from welfare and not just a typical single male on general relief.

Now under FESA, as it was conceived, and under the right administration, the critical flaws apparent in the plan need not have been endorsed. The State council could have set strict qualitative standards for plans and rejected those plans that did not meet those standards. Present JTPA standards in California are largely procedural in nature. If the plan is touched by the designated hands, it is approved and funded. Under FESA, a county that did not adhere to its plan could lose its funding. This was to encourage both thoughtful planning and careful implementation, neither of which is apparent in the Los Angeles County example.

In implementing JTPA, the Family Economic Security Act would have required critical review of the plans by the council and effective monitoring by the State administration. FESA even today allows the State administrator to bring noncomplying counties to a hearing before the State job training council, which may withhold funds in order to achieve compliance.

Now FESA, in a sense, has been subsumed by the Job Training Partnership Act to the extent never contemplated by members of this committee and certainly not by our general membership in the California Legislature.

Some of the compliance methods that I mentioned are available to the Governor should he choose to use them. Apparently Governor Deukmejian has chosen to relinquish his responsibilities and allow local government free rein under JTPA. He and his council are ignoring the direction of the State legislature for coordination and efficient use of job training funds.

I see the Los Angeles County plan as the distorted reflection of the job training coordination envisioned by myself, by all the members of this committee, and certainly by the bipartisan majority vote of the members of the California Legislature.

But I have one other serious concern about the Los Angeles County plan that I have not heard anyone discuss this morning and I would like to bring it to your attention.

I wonder how the Private Industry Council could have approved this plan. I wonder how much private sector thought went into a plan so poorly drafted that it specifies 31 skilled or semiskilled oc

cupations that industry needs, and for which people could be trained under the Job Training Partnership Act, but provides training for only 11 of these occupations.

Now I realize that the Los Angeles Private Industry Council has barely been formed-or it had barely been formed when this plan was developed. I would urge that the council in the future do all it can to help the county develop a plan that trains workers whom business will hire.

I would also note that, under FESA, those groups most likely to benefit from successful job training had mandated representation on the Private Industry Council. JTPA's less clear direction has allowed PIC's to ignore participant input. An increased willingness by a business to listen to participant concerns and an increased willingness by the county to listen to businesses' concerns I'm sure would have resulted in a better job training partnership and a better Los Angeles County plan.

Let me say that there are several fallacies—and I'm certain that you've caught them, but I would like for them to be in my testimony. In speaking of the county's input of dollars into training and general relief, members of the committee, there has been no training program in general relief. This is the first time. So that statement is-they started from zero and they put $1 in. They were putting in more than they had ever put into training in general relief in the history of the State of California. We've researched it. General relief is basically no different from what it was when it was first established on the books here in the State of California in terms of what it provides. General relief for many, many years was a very temporary situation. For example, many of our refugees that came over before the refugee laws were really in operation, qualified under general relief. That was to tide them over, to get them started.

So we have to be careful. I cannot, just in good conscience, permit those figures to be used without pointing out the fallacies in them.

Now they speak of meeting the Los Angeles County's goal, that they will have met that goal by the end of the year. Well, when we look at the Los Angeles County's plan, their goal is only 35 percent, so they mean that they will have accomplished 35 percent in training, not a mark that I'm sure was envisioned by yourself, Congressman Hawkins, by other Members of the House, in developing the JTPA.

Also, in their figures where they stipulate that the general relief portion of the JTPA funds does not use up the percentage that is generally believed, the manner in which they are able to make it appear that way is that, in the figures showing the total population of need-the total population for which the JTPA funds appropriately could and should be used-they include youth. There are no youth on general relief.

So there are many fallacies in the testimony that has been given here. I'm certain that the members of this committee spotted it, but I wanted it to be a part of my testimony.

Let me close my remarks by noting that the two main improvements on CETA that have been created in the Job Training Partnership Act are the direction, in our opinion, and certainly for

those of us here in California who are intimately involved with this, except for the Los Angeles situation-this involvement of private industry and the administration by the Governors of the States are, as we see from the example here in Los Angeles, direction from private industry has yet to mature and State administration is, in both design and performance, weaker than it ever should be.

In our role in the State legislature, we will continue to be vigilant in this regard and to supply you with any and all of the information that you would need and want.

With that, I ask that Mr. Schmidt be given an opportunity to make a few remarks on behalf of Senator Lockyer, and then we'll entertain any questions that you might have.

[Prepared statement of Senator Bill Greene follows:]

PREPARED STATEMENT OF BILL GREENE, CALIFORNIA STATE SENATOR

Mr. Chairman and members of the committee: I am Bill Greene, chairman of the Industrial Relations Committee of the California State Senate. I want to express my gratitude to Congressman Hawkins and Congressman Dymally for holding this hearing to review the Los Angeles County Job Training Plan. It is important that those of us who are committed to the private-public job training partnership maintain vigilance over the program that we as legislators worked so hard to create. Having consulted with Congressman Hawkins on numerous occasions while he was creating the improvement in CETA that became the Job Training Partnership Act [JTPA], and as one who worked closely with State Senator Bill Lockyer to put together California's parallel legislation, the Family Economic Security Act, I am pleased to assist the committee in its fact-finding mission.

As Mr. Hawkins and Mr. Dymally are aware, I am chairman of the State Senate Policy Committee that approves all job training legislation created in California and I am chairman of the Finance Subcommittee that reviews California's disbursement of Job Training Partnership Act funds. I have carefully reviewed the Los Angeles County job training plan and would like to focus the committee's attention on certain aspects of this plan that clearly stray from the course envisioned by the State Family Economic Security Act, and unfortunately confirm my worst fears of what JTPA could become.

It is my considered opinion that the Los Angeles County plan does two jobs badly. It does not train people for jobs and it does not get them off welfare. I believe that under a properly administered Family Economic Security Act the excesses of the Los Angeles County plan could be curbed; however, these excesses apparently cannot be controlled under JTPA.

Mr. Hawkins, Mr. Dymally, the Los Angeles County Supervisors, and myself can all agree on one of the goals of both the Family Economic Security Act and JTPA: targeting job training funds to recipients of public assistance. Los Angeles County intends to refer over 10,500 county welfare recipients to its 10,000 adult training slots. However, only 3 percent of the adults served will be recipients of Aid to Families with Dependent Children [AFDC], the federal-state family welfare program. Instead, up to 97 percent could be recipients of General Relief, a program funded entirely by the county. This means that in a service delivery area with over 282,000 economically disadvantaged adults, and over 100,000 unemployed, JTPA funds will be almost entirely reserved for about 9,000 recipients of General Relief, nearly one-sixth of whom have not worked in the last 5 years.

This job training plan affects people who live in the 29th State Senate District I represent, and in Congressmen Hawkins', and Dymally's districts too. We are well aware of Los Angeles County's concern with General Relief costs and the direction of this plan to cure that problem. Members of this committee and the Los Angeles County Board of Supervisors may count me among those who believe that welfare should be a temporary program for people in need and that effective job training is an important component of keeping welfare temporary.

However, I have grave concerns about this particularly misguided attempt at using job training funds to reduce welfare costs. By its own description (and all of the figures I use are from the plan itself), this plan is doomed to failure: only 22.4 percent of the welfare clients served will obtain unsubsidized employment. This very low job placement rate-something I am sure this committee never envi

sioned—is apparently permitted under U.S. Department of Labor regulations implementing JTPA. Los Angeles County actually plans to "fail" 78 percent of the welfare recipients to whom it provides job training services.

While this plan may be within all the legal parameters of JTPA, it is clearly bankrupt. It is an obviously inefficient use of scarce job training resources. The Los Angeles County plan forecasts the waste of nearly $51⁄2 million-more than three quarters of the money available for training adults in the Los Angeles County Service Delivery Area. These dollar could have been directed to more productive job training: either by targeting funds to necessary services that would give people the tools they need to succeed in the world of work, or by selecting from a larger portion of the economically disadvantaged community those more likely to succeed with the services available.

This waste is not only a disservice to the taxpayers, but to the poor as well. Seventy-eight percent of the welfare participants will receive nothing from this plan but a false promise of economic opportunity. At best these people will wind up back on welfare, at worst they will be driven into the street. This plan does not train people for jobs and does not get them off welfare.

How did this happen? JTPA gave the Federal job training money to the Governor and his Job Training Council to parcel out among the service delivery areas, but gave the state administration very little quality control over job training plans. You, Mr. Hawkins, look to us at the state level to effectively administer these funds. But we do not have all the tools we need. Basically, as long as Los Angeles County shows that it can adequately administer the funds and plans to serve a few specified proportions of the unemployed disadvantaged population, the state must give it the JTPA money. Because of the "free" start-up year, and the 2-year planning process, it will be at least 2 and perhaps 3 years before the State Job Training Coordinating Council is in a position to say “No, this plan is unacceptable because it does not put people to work on jobs in the private sector."

At the State level, in the Family Economic Safety Act [FESA], we tried to create a strong and truly coordinating State Job Training Council. While we provided for some local flexibility in planning job training, we established direction and priorities by statute. FESA, to contrast with the Los Angeles County plan, gives first priority in job training to unemployed parents and other recipients of Aid to Families with Dependent Children [AFDC]. Focusing job training in this way has the added advantage of removing whole families from welfare, not just the typical single male on General Relief.

Under FESA as it was conceived, and under the right administration, the critical flaws apparent in the plan need not have been endorsed. The State Council could have set strict qualitative standards for plans and rejected those plans that did not meet those standards. Present JTPA standards in California are largely procedural in nature: if the plan is touched by the designated hands, it is approved and funded. Under FESA a county that did not adhere to its plan could lose its funding: this was to encourage both thoughtful planning and careful implementation, neither of which is apparent in the Los Angeles County example. In implementating JTPA, FESA would have required critical review of plans by the Council and effective monitoring by the State administration. FESA even today allows the State administrator to bring noncomplying counties to a hearing before the State Job Training Council, which may withhold funds in order to achieve compliance.

FESA is not dead, but it has been subsumed by JTPA to an extent never contemplated by members of this committee or by the California Legislature. Some of the compliance methods I mentioned are available to the Governor should he choose to use them. Apparently Governor Deukmejian has chosen to relinquish his responsibilities and allow local government free rein under JTPA; he and his council are ignoring the direction of the State Legislature for coordination and efficient use of job training funds.

I see the Los Angeles County plan as a distorted reflection of the job training coordination envisioned by myself and Congressman Hawkins in JTPA.

I have one other serious concern about the Los Angeles County plan that I would like to bring to the committee's attention. I wonder how the Private Industry Council could have approved this plan. I wonder how much private sector thought went into a plan so poorly drafted that it specifies 31 skilled or semi-skilled occupations that industry needs and for which people could be trained under JTPA—but provides training in only eleven of these occupations. While I realize the Los Angeles Private Industry Council had barely been formed when this plan was developed, I would urge this coun