tracting for independent evaluations, with a view to measuring specific benefits, so far as practical, and providing information needed to assess the relative potential of the various approaches employed in such programs for contributing significantly to the solution of employment and employment-related problems of the economically disadvantaged. In formulating plans for the implementation of this section, the Director shall consult with the Secretary of Labor and, as appropriate, with the heads of other Federal agencies.

"SPECIAL CONDITIONS

"SEC. 124. Participants in programs under this part shall not be deemed Federal employees and shall not be subject to the provisions of law relating to Federal employment, including those relating to hours of work, rates of compensation, leave, unemployment compensation, and Federal employment benefits, except that participants designated by the Director in projects and activities carried out by the Director pursuant to section 121 (b) of this Act shall be deemed Federal employees to the same extent and for the same purposes as enrollees in the program conducted by the Secretary of Labor pursuant to title II of the Manpower Training Act of 1969."

(d) The amendment of the provisions of title I-B of the Economic Opportunity Act of 1964 and the repeal of the Manpower Development and Training Act of 1962, as amended, provided for in this section shall not affect any grant or contract entered into pursuant to such statutes prior to the effective date of this Act. Unexpended appropriations to carry out the authorities repealed under subsection (a) and the authorities provided in title I, part B of the Economic Opportunity Act of 1964 prior to its amendment by this Act shall, except as directed by the President, be made available to carry out the provisions of this Act.

EFFECTIVE DATES

SEC. 617. (a) Titles I, III, IV, V (except section 502 (a)), and VI shall become effective on July 1, 1970.

(b) Title II shall become effective on July 1, 1971, except for section 201 (a), which shall become effective on the date of enactment of this Act.

Mr. DANIELS. The Select Subcommittee on Labor will come to order. We meet this morning for the purpose of considering H.R. 10908, H.R. 11620, and H.R. 13472, bills to establish a revised national comprehensive manpower program.

The Employment Act of 1946 adopted as a national policy the commitment to strive to maintain a total supply of jobs in the Nation. Since that time numerous legislative enactments have implemented this important goal.

Originally it was widely believed that the fault in being jobless rested almost exclusively with the unemployed. But experience has revealed that if people were deficient, s), too, was the system.

The unemployed or underemployed not only lack basic job skills and education, but also are often trapped in the slum-ridden core of inner cities and poverty-stricken rural areas.

Ironically, the most disadvantaged of our citizens are those least likely to know about manpower services. Thus, many of the present unemployed and underemployed are disillusioned. Their training and placement in jobs are compounded by many obstacles such as family and child care problems and legal and credit questions.

According to the 1969 manpower report, about 11 million people were jobless at some time during 1968. Of this great pool of unemployed about 4.5 million are nonwhite. Half are women. Four million are youth under 21 years of age. Three million live in urban slums and 3 million live in rural depressed areas. About 2.8 million persons were without jobs in an average week.

One of the purposes of these hearings is to reexamine our Nation's manpower policy in a rational and unbiased manner. There are many

questions which must be asked during these extensive deliberations before we will be able to determine the wisest course of action.

We will want to know the proper roles of the Federal Government, of the States, of local communities, and of the private sector in formulating and implementing manpower policy.

Does the administration bill sufficiently detail how potential participants should be involved in planning or implementation of manpower programs?

And, how can existing educational and training resources be tapped, rather than investing new moneys in wasteful duplication?

On August 12, President Nixon stated in his message to Congress: Manpower training is central to our commitment to aid the disadvantaged and to help people off welfare payrolls. Intelligently organized, it will save tax dollars now spent on welfare, increase revenues by widening the base of the tax-paying public, and-most important-lift human beings into lives of greater dignity.

During the course of these hearings we intend to seek the advice of the professional expert and also to reach out to those people who seldom have a voice in the development of legislation which so vitally affects them.

I pledge that these hearings will not deal in broad generalizations that can conceal critical differences. Assessment of labor planning and policy will have little meaning unless focused upon particular occupations, industries, and individuals.

Intelligent action on a national level depends to a great extent upon careful attention to details on a local level. We can no longer abide the trial and error process of identifying problems and grasping at solutions based upon misconceptions or faulty information.

It is my sincere hope that, after careful and conscientious study of these proposed bills, our efforts will make it possible for all who wish to be employed to work at an occupation of their choice with complete dignity.

Our first witness this morning is Hon. George P. Shultz, Secretary of Labor.

Secretary Shultz, I extend to you a most cordial welcome.

I note you have a prepared statement. Before you proceed, I am quite sure that you are acquainted with my colleagues on this subcommittee. They are Mr. James O'Hara, Mr. Hawkins of the State of California, Mr. William Ford of Michigan and Mrs. Edith Green of the State of Oregon, and to my right one of my minority colleagues, Mr. Quie of Minnesota.

Also on my right is Mr. Marty LaVor, and on my left is counsel for the subcommittee, Mr. Dan Krivit.

STATEMENT OF HON. GEORGE P. SHULTZ, SECRETARY OF LABOR; ACCOMPANIED BY ARNOLD R. WEBER, ASSISTANT SECRETARY FOR MANPOWER, AND MALCOLM LOVELL, MANPOWER ADMINISTRATOR

Secretary SHULTZ. Thank you. May I introduce my colleagues here, Arnold Weber, Assistant Secretary for Manpower, and Malcolm Lovell, Manpower Administrator.

I am very privileged to appear before this committee to discuss the general subjects of manpower legislation. That is especially so

because I am aware of the creative and innovative role that this committee and counterpart in the Senate have played over the past few years in the development of this whole field which has been a very rapidly moving effort. I am also aware of the fact that Congressman O'Hara has developed a bill, as has Congressman Steiger, to put our efforts into what we see as a continuing evolution and effort to make the large sums that are now devoted to this purpose really effective in helping the people to whom they are directed.

So it has been in the spirit of continuing development and creative effort in this field that I especially welcome the opportunity to appear

here.

Of course, I am going to devote my attention in my statement to the proposed Manpower Training Act of 1969.

Mr. Chairman and members of the committee, I welcome the opportunity to discuss with you the proposed Manpower Training Act of 1969. Through this legislation we hope to lay the foundation for a comprehensive national manpower system-one that can serve the needs of the individual while affording States and localities a major role in manpower planning and program administration.

The Manpower Training Act has evolved from a careful review of our experience with the policies and procedures that have guided national manpower training efforts over the past 8 years. At the same time, the proposed legislation consciously seeks to break new ground. The act will create a new framework for a constructive partnership between Federal, State, and local governments in the spirit of the New Federalism.

We are confident that this new approach will greatly benefit the individual who needs manpower services. It will also strengthen the institutions of State and local government that have heretofore lacked the tools to cope with critical manpower and economic problems.

This morning I would like to outline the major features of the proposed Manpower Training Act. However, to underscore the significance of the legislation, I think that it is important to describe briefly the development of our national manpower policies and problems that have arisen in the implementation of specific programs.

BACKGROUND AND GROWTH OF MANPOWER POLICIES AND PROGRAMS

From modest beginnings in 1961, manpower programs have grown to major dimensions. They now encompass classroom skill training for the unemployed, work experience for the young and the unskilled, onthe-job training for the disadvantaged in our urban slums, and a variety of other services.

The way these programs arose and the form that they took contributed to a set of problems which have intensified with each passing

year.

In looking back we can recognize that the multitude of manpower programs developed around three distinctly separate sets of concepts, objectives, and constituencies.

The first modern manpower programs, the Area Redevelopment Act of 1961, focused on the economic development of depressed areas. The ARA sought to improve local public facilities and provide incentives to attract and establish new economic enterprises.

Limited in scope, the training of depressed area residents was viewed as a supportive service to the process of economic redevelopment.

In 1962 Congress addressed itself directly to the needs of the unemployed worker through the Manpower Development and Training Act. The MDTA was a response to the persistent unemployment that characterized the economy at the time. Such unemployment was largely felt to be the result of pervasive technological changes that were wiping out old jobs and creating new ones.

The solution was to provide the displaced workers with the opportunity to acquire new skills and increased occupational mobility. The persons initially served by the MDTA had a history of occupational attachment and active participation in the labor force.

In 1964 a new set of policy considerations was applied to manpower programs with the national commitment to a war on poverty. The Economic Opportunity Act of 1964, particularly title I-B, made manpower programs not only an instrument of labor market policy but of social policy as well. In essence, this act created a mandate to expand work and training opportunities for the disadvantaged member of our population.

În 1967 special attention was given to the welfare recipient as a target group for manpower services through the enactment of the work incentive program under the authority of the Social Security Act.

Thus since 1961 a complex set of manpower programs has been established, funded by different acts and aimed at different client groups. Together they affirm a national commitment to manpower policies and programs and have resulted in assistance to some 4.5 million individuals.

However, this pattern of development has also created major problems of concept and administration.

First, there has been a proliferation of categorical programs, each with its own statutory base, funding source, and eligibility requirements.

Such categorization has built-in rigidities that frustrate efforts to allocate resources so that the overall manpower program can be geared to local needs and circumstances. There is an overriding concern with filling available slots for a particular program rather than developing the mix of services the individual needs to become a productive worker and the community requires to cope with local problems.

Second, there has been an excessive duplication of administrative systems for the delivery of manpower services. Some programs are operated by public agencies, others by nonprofit private organizations, and still others by profitmaking companies.

Although some competition and experimentation is heathly and desirable, the duplication of services and agency responsibilities can become counterproductive. In addition, we have also been overwhelmed by the sheer numbers of different sponsors-some 10,000who deal directly with the Federal Government.

In a typical State, for example, we deal with individual school districts in the Neighborhood Youth Corps in-school program; with city halls and independent community action agencies in the Neighborhood Youth Corps out-of-school programs, and new careers programs: with rural county governments or agencies in the operation mainstream program; State employment services and vocational education agencies

in the MDTA-institutional program; the Employment Service and welfare departments with regard to the work incentive program; and with individual employers and unions for MDTA-OJT preapprenticeship and JOBS programs.

Multiply this by 50 States and the dimensions and complexity of the problem become apparent.

Third, I believe that there is an overcentralization of manpower program administration in Washington. To the present, manpower programs have largely reflected Federal initiative and control, with little effort to tap the capabilities of governmental units at the State and local level.

This problem is particularly acute at the local level. The chief elected officials our mayors and county commissioners-have little control over fiscal resources, program administration, or those mechanisms that do exist for coordination of manpower programs.

Fourth, there have been few effective attempts to coordinate manpower programs with other complementary programs and institutions such as vocational rehabilitation, vocational education, and welfare. The absence of effective coordination has made it difficult, if not impossible for a State or a community to develop a plan that will encompass all the resources that are available-from various sources—to assist the unemployed and underemployed.

Last, manpower policies have not been used effectively to support fiscal and monetary policies in dealing with fluctuations in national economic activity.

By attacking skill shortages and creating constructive alternatives for unemployed workers, manpower programs can help to mitigate some of the undesirable consequences of changes in any dynamic economy.

THE MANPOWER TRAINING ACT

The proposed Manpower Training Act attempts to build upon the past commitments and achievements of the Congress in this area, while addressing itself directly to the major deficiencies described above. The legislation is far reaching and complex but the salient features may be clearly identified.

1. Program Consolidation.-The Manpower Training Act will con solidate manpower programs now administered by the Department of Labor, including those funded under the Manpower Development and Training Act and Title I-B, Community Work and Training Programs, and I-A, Job Corps, of the Economic Opportunity Act.

The Office of Economic Opportunity will continue its role in manpower research and program development through a new part B of title I of the Economic Opportunity Act. This authority will strengthen OEO's role in working with the Department of Labor to develop innovative approaches to manpower training.

The Work Incentive Program has been omitted from the bill because it is an integral part of the family assistance plan presently under consideration by the Congress as an amendment to the Social Security Act.

However, reciprocal language has been proposed for the Social Security Act and the Manpower Training Act to insure that the