Mr. DANIELS. When you use the word rewarding, just exactly what do you mean and how would you reward? What is the meaning of your term?

Mr. CONWAY. Exactly what the Secretary of Labor is trying to do now by cutting out programs that don't work and moving funds over to programs that do. It is that kind of thing that I mean when I talk about rewarding-go with the good success.

Mr. STEIGER. The Administration's bill, as you know, has a progressive means of the Secretary turning over "X" percentage of the funds for the development and then if they have an exemplary performance, they can go up to a higher level.

In section 11 of my bill I have tried to provide some incentive for either of these reasonable alternatives.

Mr. CONWAY. As I say, I was confronted with this kind of question in the Senate side by Gaylord Nelson, who in addition to being a Senator, is a former Governor. His concern was how can you get the States in the business of doing the right thing in this whole area of manpower training, and job development, and public employment, and so on. I am very sympathetic to that. I think it ought to be made possible for the States to become much more active and much more effective. But that can be done by having the States compete for those funds by doing the right thing- by doing something. I think that the Governor of Wisconsin would probably react differently to the manpower programs than the Governor of Mississippi.

The problems are essentially the same in both States, maybe different in some particulars. But why give the Governor of Mississippi and the State employment agency in Mississippi the right to control everything that goes on in that State in this area. I think it would be a mistake. It is that kind of thing that I am worried about. But I don't want to shut the door to effective State participation in the manpower field. Mr. STEIGER. Let me go on to some other points and get back to that briefly.

What do you think the cost of the public service employment program is?

Mr. CONWAY. I think the rule of thumb now would be about $5,000 a year per person.

Mr. STEIGER. How do you handle the problem that I see, at leastand which I intend to pursue over a period of time-on the question of disincentive, both for transferring it from the public to the private, as well as, I think, the very real question that has to be raised about what the impact of a public service employment program is on the wage scale in the private sector?

Mr. CONWAY. I would peg it as Mr. Levitan said, at least to the minimum wage and allow for the prevailing wage concepts to operate in a public sector job.

I am not really concerned. I think it worries people too much, this question of disincentive. I happen to have been very intimately associated with the automobile workers union in contract negotiations over the years on this whole question of the supplementary unemployment benefit program. We called it the guaranteed annual wage when we started out.

As you probably know, we agreed in the first go-around to a figure of 85 percent of wages, and gradually that has been increased. Now,

for all practical purposes, an auto worker who is laid off gets almost the equivalent of his full wages for a year.

That happens from time to time and the guys come back to work as soon as the jobs are available. I don't think there is any experience that would indicate that there is a disincentive that has been the result of that experience. I don't think there would be in the public sector employment program.

I think the one thing that the National Commission on Automation and Technology did that has been grossly overlooked is to advocate what in effect would be a system of social accounts. The employed person has an awful lot of positives going with him and the unemployed person has an awful lot of negatives going with him, just starting with the simple business of paying taxes. The employed person is paying taxes, the unemployed person is not. The employed person is not on welfare and the unemployed person frequently is. He is drawing unemployment insurance for a long time and then goes on to public welfare. There are a lot of negatives eliminated when you institute a system of positives. So I think that if we could institute some thinking about what the positives would be with an employment program, an awful lot of that $5,000-per-person cost would be absorbed by the elimination of a lot of negatives that are being paid for now through some other system.

Mr. STEIGER. Would you recommend, that if this is to be done, that we provide not just for public service employment, but for public works employment as well?

Mr. CONWAY. I would like to see that. Maybe you can't do both at the same time. But if you would consider that, I would certainly urge it. We need public works all over the country, too.

Mr. STEIGER. You have indicated that you oppose what you call monopoly.

Mr. CONWAY. That is right.

Mr. STEIGER. I assume that that would be as true for the employment service as it would be for a community action agency?

Mr. CONWAY. Yes, absolutely.

Mr. STEIGER. That being the case, and I happen to agree with you, I hope that we can draft something that would enable a degree of competition and openness. How do we go about providing some mechanism for what Torres was talking about in his testimony and which you highlighted-participation.

He talked about participation of the poor. I will be very honest with you. I don't want this to be limited just to the participation of the poor. It seems to me that the underemployed-who may or may not be poor-or those who would be employed would be eligible for training, ought to be as eligible for some degree of influence in terms of the policy decisions that are made. What do we do about this?

Mr. CONWAY. I think you are right. I think Ed Torres in his testimony laid emphasis on the poor but his main concern is the MexicanAmerican community in East Los Angeles that is generally underprivileged. Even the employed, in that community relatively speaking to the whole of the larger communities, are disadvantaged-so that I would hope also that the manpower legislation enacted by the Congress would be broad enough to cover other situations than just hardcore unemployment.

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I think again we probably are approaching that point where most of us ought to be going to school in one form or another most of our lives, learning new skills, new technologies, new approaches. I think private industry is rapidly approaching that point where it is constantly replenishing the knowledge of its work force. Certainly, the military does this all the time and has to.

I think, generally speaking, school teachers and doctors and lawyers have to go back and refresh and update in order to be able to stay current. So I would favor an open ended kind of manpower policy that would encourage a constant upgrading of the whole of the work force.

One of the most successful programs that we ever adopted in this country was the GI bill of rights after World War II. That was a social investment that really paid off. The number of people that got an education, and as a result of that education improved their lot in society and became effective citizens, we forget. But that was an enormously successful program.

It is the quality of that which has also got to be brought into a manpower policy. Again, I don't want to hold you up here, but I think this committee deserves a great deal of credit for having moved the art, so to speak, from where it was 10 years ago to where it is now, and I simply urge that you keep that up.

Mr. STEIGER. Let me ask one other question, Mr. Chairman. I again appreciate your patience.

What is your factual basis for the criticism of the JOBS program? I must admit I just read the annual report of the National Alliance of Businessmen. It seems to me the figure in there is like a total of 268,900 trained, 142,800 still on the payroll and a total of 338,307 basic job pledges as of September 30, 1969.

Mr. CONWAY. There is very little information available. One of the things that the Department of Labor doesn't do very effectively is evaluate its own programs. We have offered to do a little evaluating for them but they don't seem to have too much of an interest in this. There is some evaluation going on.

You might ask Mr. Garth Magnum to come up and testify on the effectiveness of the JOBS program. He probably knows more about it than anybody else. He has written recently. Is it published yet? You have seen the manuscript, I know.

Mr. GINSBERG. Mr. Steiger, the figures that Mr. Conway and we have put in this testimony on the 35,000 are the number of jobs which contracts have actually been written with corporations under which they have gotten the M.A. 5 money. The 200 to 300,000 figure, which many groups of businessmen associated with the National Alliance of Businessmen put out is a figure which they say represents the number of persons they have hired on their own including the 35,000 who were hard-core unemployed before they were hired.

So the JOBS program, job opportunities in the business sector, sponsored by the Labor Department, has actually resulted in-these are Labor Department figures in their regular releases—I think the figure is slightly over 30,000 who are on jobs for which funds have been provided by the Department of Labor.

This does not mean that the National Alliance of Businessmen are not accurate when they say over the year and a half they have

hired an additional 300,000 people but they are persons who are hired in the normal course of business operation.

Mr. CONWAY. Or they could be 15 people on the same job as a result of turnover.

Mr. STEIGER. Dr. Magnum, I hope will be one of the people here as a witness. I must say that I have held back from either praising or criticizing the JOBS program. I remember when Stanley Ruttenberg was before this subcommittee last year. I was deeply concerned and I am still deeply concerned about the fact that there is not an awful lot of hard factual public information on which to make a judgment as to the effectiveness of that operation.

Mr. GINSBURG. One other thing that has come up too, is very relevant to this. You are asking businessmen to hire persons whom typically they would not hire, and unless their employment demands expansion, no industry is going to hire a person unless they know that person will be on the rolls for a full 9 months to a year in order to get the full benefit of the contract. Also, that person will be the first one who will be laid off in any kind of a down-turn.

So there is quite a commitment to hire under a JOBS type program and it does mean an involvement with the Government. It does mean a lot of arrangements which many businessmen find just don't work out for them.

But I think the crucial question is the ability of JOBS as such, to create new opportunities over and above those which are normally created. That is why I think Mr. Conway emphasized the expansion in public service to add to what industry already does in providing new jobs each and every year, but unfortunately not enough to absorb many of those who are still hard-core unemployed.

Mr. STEIGER. It is my understanding that there is work now going on under M.A. 5 to expand the concept, to enable a company to go at a higher level of those presently employed, so as to open up a legitimate job for somebody at a lower level.

I think, and I know Jim O'Hara has been concerned about this always, in terms of this whole question, how we move up so that you really have a job that is there, real and can last. Because I am afraid these are people who are going to be the first to go. I don't know whether the Labor Department has completed their negotiations but I know that at least under the JOBS concept they are attempting to go under that direction.

Mr. DANIELS. We are pressed for a little time. I would like to call on Mr. O'Hara again.

Mr. O'HARA. Mr. Conway, I think you have been too charitable about the JOBS program. I think it is worse than you suggested. I was one of those who, with you, at the time the thing was first announced, had grave reservations about the concept of the program. I might just say that nothing that has happened since then has lead me to change my mind. I am really convinced that we have to give that program a very thorough and hard review.

Then, finally, to say to Mr. Steiger and joining in Mr. Conway's response, again, our public service employment program clearly does not envisage simply the usual paraprofessional type of job. What we are talking about is jobs of all kinds at many different levels. We are talking about employment and training. There will be some minimal

training needed for some of these jobs, I am sure. But essentially, what we are talking about is employment rather than just training. Thank you.

Mr. DANIELS. Mr. Conway, I earlier indicated you would submit to the committee your recommendations with reference to the three bills that are before this committee, the Steiger bill, the Adminisration's bill and the O'Hara bill. Perhaps you will find in each of these bills something that merits the consideration of this committee and we appreciate having your views on that. They will be incorporated in the record.

Could you submit such a statement and furnish us about 15 copies so I can give each member of the committee the benefit of your views? Mr. CONWAY. Yes.

(The information follows:)

COMMITTEE FOR COMMUNITY AFFAIRS,
February 13, 1970.

Memorandum to: Hon. Dominick V. Daniels, Chairman, House Select Subcommittee on Labor.

From: Jack T. Conway.

This memorandum contains several suggestions on manpower legislation which are supplemental to the testimony I presented before the Committee on January 28, 1970. It has been prepared in answer to the request from the Committee for an elaboration of ideas which might strengthen the proposed legislation.

There has been a great deal of discussion on the need to give local government officials a greater voice in the implementation of manpower programs. It is our opinion that under the bill proposed by Congressman O'Hara the Secretary of Labor has the power to contract with either public or private agencies for the administration of manpower programs.

Under Section 103 of Title I of H.R. 11620, the Secretary's authority would encompass entering into agreements with public officials which would call for the development of manpower programs. Since the O'Hara bill, like the other manpower bills under consideration, calls for the decategorizing of manpower funds, a local public official, consistent with the contract negotiated with the Secretary of Labor, would be able to structure manpower programs necessary in the community with the assurance that such programs would have the flexibility which decategorizing provides.

Since the. concern for local participation is shared by me, perhaps it would be well for the O'Hara bill to make explicit through some elaborating provisions that the Secretary should enter into contracts with local public officials where appropriate. Also, those provisions might call upon the Secretary to meet with the local officials submitting the plan to work out any revisions in such plan the Secretary deems necessary for the plan to be completely consistent with the objectives of the legislation.

The above suggestions would apply, not only to the public service employment section of the O'Hara bill, but equally to other manpower programs authorized by the bill.

Another feature of the O'Hara bill which might be strengthened is Title IIManpower Programs Relating to Upgrading. The shortages which exist in higher rated classifications in various industries-for example, in hospital and medical services could best be closed by promotion from among employees at lower-rated jobs. Typically, however, periods of training lasting from six months to a year and a half or more are required to obtain the necessary credentials to move into a number of these more skilled classifications. A few experiments have indicated that where financing to compensate workers for the loss of earnings while attending educational and training courses is not a problem, there is a strong response to the offering of such training.

Funds should be made available to institutions which wish to upgrade employees into needed skill categories to compensate for time off the job which would be required for training.

As I mentioned in my testimony, one of the constructive effects resulting from local community groups becoming involved in manpower programs has been to