EQUAL OPPORTUNITY AND FULL EMPLOYMENT ACT

Part 4

SATURDAY, NOVEMBER 15, 1975

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON EQUAL OPPORTUNITIES

OF THE COMMITTEE ON EDUCATION AND LABOR,

Boston, Mass.

The subcommittee met at 9:30 a.m., pursuant to call, in Faneuil Hall, Boston, Mass., Hon. Augustus F. Hawkins (chairman of the subcommittee) presiding.

Members present: Representatives Hawkins, Benitez, and Buchanan.

Other Members present: Representative Moakley.

Staff present: Susan D. Grayson, staff director; Carole Schanzer, clerk; and Nat Semple, minority legislative associate.

Mr. HAWKINS. Ladies and gentlemen, the Subcommittee on Equal Opportunities is called to order. It is the intent of the committee to proceed as expeditiously as possible. We have a very tight schedule and a long list of witnesses. We will accomodate all those who wish to testify, whether they are scheduled or not. We promised to start promptly in order to accomodate witnesses and their schedules. We feel as if we should now proceed with the hearing itself.

The Subcommittee on Equal Opportunities is pleased to be in Boston for the eighth in a series of hearings which we have held around the country on the subject of full employment.

When we began these regional hearings in March of this year, the national unemployment rate was 8.7 percent. Today, despite declarations by the administration that the economic situation is improving, unemployment remains at the intolerable level of 8.6 percent.

In Massachusetts the official unemployment level of 12.5 percent far exceeds the national average. We know that this official level for the State is only the tip of the iceberg for it fails to take into consideration those discouraged workers, persons who have accepted part-time work because they have been unable to locate full-time employment and housewives and others who would like to return to the job market. H.R. 50, the Equal Opportunity and Full Employment Act, would provide the executive, judicial, and legislative machinery to implement full employment in the Nation's economy and end the tragic and wasteful idleness of millions of workers.

This legislation which Congressman Henry Reuss and I have introduced along with 109 other Members of the House of Representatives, does away with the present concept of defining full employment as a tolerable level of unemployment. I am pleased to say that five

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Members of the Massachusetts delegation, Congressmen Boland, Drinan, Harrington, Moakley, and Tsongas, are cosponsors of this bill. For months now there has been increasing national discussion on the concept of full employment. Unfortunately the call for full employment by the Nation's political, business, and labor leaders has too frequently been more rhetoric unaccompanied by concrete proposals for implementing such a national policy.

While I am in no way suggesting that this bill is perfect and I welcome suggestions to strengthen it, I feel that it is important to challenge those who espouse full employment yet do not support the means to achieve it.

I look forward to this opportunity to hear from the officials and citizens of this great State and the city of Boston, their views on the potential impact of such legislation on the people of Massachusetts.

The subcommittee is honored to have appearing before us this morning the Governor and four Members of Massachusetts' outstanding congressional delegation. We are pleased to hear first from the Honorable Michael Dukakis, Governor of Massachusetts.

[Applause.]

Mr. HAWKINS. It is a privilege to have you before us as the first witness. To my left is the Honorable Jaime Benitez of Puerto Rico. The ranking Republican member of the committee, Mr. Buchanan, has been slightly delayed.

STATEMENT OF HON. MICHAEL DUKAKIS, GOVERNOR, STATE OF

MASSACHUSETTS

Mr. DUKAKIS. Thank you, Mr. Chairman. As you well know, Democrats work harder anyway.

It is a great pleasure for me to be here. Thank you for your work in drafting this critically important legislation and your tireless efforts both in the Congress and around the country in focusing attention on the economic stagnation that affects us and the national effort that is urgently needed to put Americans back to work.

I welcome Congressman Benitez to Boston as well. I am a long-time admirer of his and his work.

Let me begin at the outset by saying that I wholeheartedly endorse the goals and objectives of this legislation. It is 30 years since the Congress of the United States enacted into law legislation which committed this Nation to full employment.

Three decades later we have failed to meet that commitment. In fact the Nation's inability to achieve prosperity and full employment over the past few years makes me wonder just why Congress passed the Full Employment Act of 1946 if we have been so incapable of making its lofty rhetoric a reality in 1976.

Let me also say that it is about time this Nation and its Government began to put first things first. As the Governor of Massachusetts I am confronted every day by a bewildering array of Federal grant-in-aid programs, each of them carrying with it its own bureaucracy, forms, and regulations.

I am not objecting to these programs. In fact we are taking full advantage of every one of them that can help us with our own serious

financial needs. The Lieutenant Governor is very active in the Washington office, taking advantage of every one of them. Obviously they help us in our financial need and with certain program commitments that we cannot afford simply from State funds.

Mr. Chairman, before we adopt any more of these programs, isn't it about time that we committed ourselves as a matter of national policy to the simple proposition that every man and woman who is ready, willing, and able to work is entitled to a job?

And if we made that commitment then I can assure you that the financial problems of the States and the cities of this country would vanish and we could begin to direct our energy and initiative toward the implementation of important social goals which we have been forced to defer or abandon by the burdens placed on us by the current

recession.

Let me illustrate the meaning and significance of this in the case of Massachusetts.

Last January this State was a fiscal basket case. It was beset by the twin evils of rapidly increasing expenditures, particularly for welfare and rapidly decreasing revenues. True, we had been making commitments and raising expectations without having the slightest idea how we were going to pay for them. But unquestionably our situation was exacerbated by the impact of the national recession, particularly here in the Northeast.

Faced with the most difficult financial problems of any State government in the Nation-Governor Carey had not yet been faced with the fiscal problems that he now confronts-I and a progressive and liberal Democratic legislature were forced to review our entire human services and welfare programs and reluctantly support cuts in those programs to avoid near bankruptcy. Even with the cuts-and in this State we are spending some $300 or $400 million less than we spent last year and I know of no other State in the Nation that can make that statement-we have been forced to increase taxes in Massachusetts by some $400 or $450 million at a time of serious recession. But the cuts themselves have a direct bearing on the legislation which we consider today.

For one of the things we were forced to do was to enact into law legislation eliminating single, able bodied, and employable people from our general relief rolls. Now some of these people may in fact have been riding the system. We have some evidence in the form of declining caseloads that for some perhaps this was the case. Others unquestionably want to work and are having great difficulty finding jobs.

Had the United States of America committed itself as a matter of national policy to insuring that there was a job for any one of these citizens of Massachusetts who wanted work and couldn't find it, not only would so drastic a change have been unnecessary but the talent and energy of thousands of our citizens would now be utilized for important public tasks.

The same is true of our unemployment compensation system. At the present time over 350,000 Massachusetts citizens are collecting unenployment compensation. Many of them have been collecting for weli over the 13 weeks which represent the average unemployment claim. In fact our division of unemployment security informs me that ap

proximately 100,000 of these recipients are currently in their 39th to 65th week of benefits. If we had a guaranteed job program in this country and if Government was the employer of last resort then business and industry would not be burdened with the enormous cost of our unemployment compensation system and thousands of our citizens would now be engaged in gainful employment instead of standing around in unemployment compensation lines week after week after week.

What then is needed? Quite simply a basic national commitment, that we as a nation will provide a job for every man and woman who wants to work. These jobs should preferably be in the private sector. But if the private sector cannot provide them then Government should be the employer of last resort and sufficient public service jobs should be provided to make sure that we meet that national commitment. What benefits would flow from this policy? The answer seems obvious.

To begin with, unemployment compensation taxes would be drastically reduced. So would welfare burdens on national, State and municipal governments. In all probability there would be less need for medicaid and the food stamp program. The crying public needs which we face at the State and local level would, to a very great extent, be satisfied by large numbers of new public service employees. Such employees need not be relegated simply to streetcleaning and leafraking, although most of our States and cities could use plenty of people for those and related tasks. We have mental hospitals, schools for the mentally retarded, day care centers and many other important public services that are seriously strapped for lack of funds and we at the State and local levels cannot provide them with the level of financial support they need. A guaranteed employment program and the public service jobs that would go with it would help us immensely.

Finally, of course, such a program would have a dramatic effect on the people themselves. It is a terrible waste of human resources for States like this one and the Nation as a whole to continue to carry millions of people on welfare and unemployment rolls, the vast majority of whom would much rather be engaged in gainful employment. The opportunities for training, new careers, and new vocations are obvious. And the need has never been greater.

I suppose the immediate response to this legislation and to testimony like mine is to say that legislation of this kind and the national commitment I am urging would be inflationary. But that is not necessarily the case. For the Congress has a very important choice to make. If a program of this kind is not to be inflationary then clearly it cannot be provided at the same time that we are approving some $30 billion in new tax cuts. So the choice, Mr. Chairman, that you and your colleagues have to make is whether or not public funds will be used to meet the national guarantee of employment contained in this bill or whether the funds needed to implement this guarantee will be granted in part in the form of tax cuts.

We all know as politicians that promising people tax cuts is the easy and popular thing to do. But I am convinced that if the American people knew that some portion of promised future tax cuts would be used to create jobs for every citizen who was ready, willing, and able to work, they would support that use of their funds and support it enthusiastically.

Furthermore the effect on the economy, in addition to reducing our unemployment rate to a negligible level, will be just as dramatic, if not more so. For our unemployed most assuredly will spend the wages they receive. Those expenditures would benefit all of us in the form of increased economic activity and growth. Moreover the unemployed will once again become taxpayers, thereby reducing the tax liability of all of us.

Come to think of it, Mr. Chairman, I am not even sure the choice before you is that difficult. Because unequestionably a program of this kind would be a reduction in the costs of welfare and medical assistance and the food stamp program.

The President was in town the other day, extolling the virtue of a large defense budget. I am not sure that is a compelling need at the present time. Tax loopholes are discussed endlessly. I think it is time a Democratic-controlled Congress did something about them. The closing of those loopholes would go a long way in providing the funds for this program.

I must say that after 10 months of squeezing and cutting as Governor and nickel and diming people to death that I suspect that somewhere in that $300-billion budget of yours there might just be $10 or $12 billion wasted on unnecessary expenditures that might be squeezed out for the purpose of financing this program.

Let me conclude by saying simply this.

The vast majority of the people of this Nation are not looking for handouts. They are not looking for the easy way out. They are not interested in easy womb-to-tomb security.

They are however vitally concerned and deeply distressed over this Nation's inability to provide productive and worthwhile employment for all of its citizens.

I know of no program that Congress could approve which could link liberals, moderates, and conservatives together because I don't know anyone in this State or this country who doesn't support the goal of this legislation.

Moreover they know that a national commitment of guaranteed employment for all of our citizens is not simply a moral imperative. It is absolutely essential if this country is to rescue itself from the baffling, unsettling, and disruptive gyrations of the business cycle.

Melville Ulmer, the University of Maryland economist, has put the case for a guaranteed national job program as a critical element in any economic recovery policy as effectively as anyone I know.

He argues:

Employment of the jobless today, in the national service, would function as one major and critical element of an integrated plan for maintaining economic stability, for avoiding inflations as well as recessions.

It would be deliberately shaped to satisfy the glaring, unfulfilled needs of the public sector, much more conspicuous now than they were 40 years ago.

It would be creatively organized to match techniques of production to the available talents and learning abilities of the jobless.

Mr. Chairman, this legislation and its goals are the first priority for America. [Applause.]

Mr. DUKAKIS. I commend you for your work and leadership and assure you that I, and the people of Massachusetts, stand ready to assist you any way we can, and if I, Mr. Chairman, personally can work