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cause the operation of the economy well below its potential. Were the economy functioning at a full employment level, it would generate substantial added tax revenue. Government would be spending less money on unemployment compensation and welfare programs. In fact, it has been estimated that each percentage point of unemployment accounts for $16 billion in federal deficit. It is instructive to recall that in the days of those terrible, spendthrift Democratic Presidents, John Kennedy and Lyndon Johnson, the annual deficit averaged $9.6 billion.

The Administration's budgets have consistently been deficient. Despite our dire economic straits, despite the more than eight million Americans desperately seeking any kind of employment, the Administration has submitted budgets that would have a negligible affect on unemployment. The Administration has submitted budgets that would do little to recoup the losses from our more than $230 billion in idle capacity, that would do little to spur manufacturing production beyond its current pitiful 69 percent utilization rate.

Restoration of our economic health demands a sharply stimulative budget. Execution of the Employment Act of 1946 directs stimulative programs. Most importantly, decency and common sense dictate that we put Americans back to work. Despite substantial opposition from the President, the 94th Congress has enjoyed some success in moving the country in this direction. Were it not for the initiatives of the Congress, we would be in much worse economic shape than we now are. It is Congress that has arrested the economic downtrend. It is Congress, in my opinion, that will keep the Nation on the road to economic recovery.

The measure under consideration here today fits firmly within the context of efforts to restore our nation's economic health. But it does more. It is a reflection of what must be our constant dedication to the need for full employment. If we are to fulfill our moral calling as a nation, we must provide that every American who wants to work, can. A national commitment to full employment must be our number one priority. Aside from the practical advantages, a commitment to full employment would be completely in step with those values that have made our nation so great. It would do much to enhance our effectiveness as an exponent of democracy and reaffirm our belief in ourself, as a nation.

Mr. HAWKINS. Hon. Paul Tsongas, U.S. Representative of the Fifth District, is present. Mr. Tsongas, we are delighted to have you. We welcome you to join the committee in its hearing today. At the present time, however, we welcome you as a witness to present your statement before the committee.

We certainly wish to commend you also as a co-author of H.R. 50 and as one who has cooperated with the committee in every way possible. We are delighted to have you and to receive your testimony at this time.

STATEMENT OF HON. PAUL E. TSONGAS, U.S. REPRESENTATIVE, FIFTH DISTRICT, MASS.

Mr. TSONGAS. Thank you, Mr. Chairman. Welcome to Boston and Massachusetts.

I spent yesterday where you are now when Congressman Udall, Congressman Benitez and myself got together on nuclear energy. There will be very few people here tonight at 6:30.

I am not going to read my prepared text. I would request that it be inserted in the record at this point.

Mr. HAWKINS. Without objection, it is so ordered.

[The prepared statement of Hon. Paul E. Tsongas follows:]

PREPARED STATEMENT OF HON. PAUL E. TSONGAS

I would like to express my appreciation for being permitted to address the Subcommittee on Equal Employment Opportunity today. The subject of my testimony, The Equal Opportunity and Full Employment Act, is a matter of grave concern to my Congressional District, and indeed, Massachusetts.

The state of the nation's economy and the extent of unemployment in the United States today is intolerable. In my own district, two major industrial

cities are experiencing run-away unemployment. In September of this year ununemployment in the city of Lowell registered 12.6 percent; in the LawrenceHaverhill area, it was 13.9 percent. The jobless rate in the Lawrence-Haverhill area this summer reached 16.4 percent in July.

For Lowell, July unemployment was up to 14.4 percent. The most recent jobless statistics for the State of Massachusetts registered 12.5 percent for the month of September. While it is clearly unacceptable that so many persons are out of work with little or no means of support, it is even more appalling that the nation-in response-has not established a policy of full employment to insure its realization. As a co-sponsor of H.R. 50, the Equal Opportunity and Full Employment Bill, I believe that the key to economic recovery and productivity in this nation is the guarantee of every citizen's right to "useful, paid employment." I am well aware that the Republican Administration is opposed to the goals of the Full Employment Bill. General Counsel to the Dept. of the Treasury, Richard Albrecht, has said that such a proposal is "inflationary." According to Mr. Albrecht, the legislative guarantee of full employment would, and I quote, “require that total demand never fall short of the full employment productive capacity of the economy." Mr. Albrecht concludes that "the absence over time of any such gap would clearly be inflationary." Noted New Deal economist Leon Keyserling has said that such economic theorizing is not applicable to the United States in 1975, nor has it been applicable to our economic situation since 1952. Instead, the country has been the victim of falling demand, the resulting wage-price spiral, and international influences such as grossly inflated energy and food prices. In effect, we can have no genuine economic recovery if we tolerate a continued high level of idleness in our labor force and in our industrial centers, along with a decrease in the flow of money and skyrocketing interest rates.

What we are confronted with is an Administration which believes that the money we spend to combat the effects of 8.6 percent national unemployment will be more fruitful and better invested in the long run than the efforts we could expend in assuring every citizen who is willing and able to work a right to a job. In Massachusetts alone, state unemployment benefits paid during the fiscal year 1975 totaled close to $500 million. In the city of Lawrence for the week ending November 8, 1975, $497,212 in state unemployment benefits was spent in checks paid to 7,175 persons. Because unemployment is paid every two weeks, this represents only 59 percent of the total number of persons receiving unemployment compensation. Under the same formula in Lowell, $625,617 was expended in the payment of 8,891 checks to State unemployment recipients. Overall, the State of Massachusetts spent $15,761,898 in unemployment compensation for the week ending November 1, 1975. Again this represented only 59 percent of the total spent in jobless benefits.

The statistics I have quoted are specifically related to unemployment compensation as paid by the State of Massachusetts. However, there are many other factors to consider when we calculate the cost of high unemployment. Not only is government paying for a fraction of a worker's previous wage, but it must also absorb the cost of social repercussions of unemployment. Food, health care, and essential social services remain real needs. The toll that unemployment takes in neighborhood deterioration, the rise in crime, drug and alcohol addition, and physical and psychological ills all cost the government in the long run. The State of Massachusetts estimates that Welfare monies are now being expended at an annual rate of $1.3 billion. This includes such expenses as 110,000 cases of Aid to Families with Dependent Children, 130,000 cases of Supplemental Security Income, 90,000 Medicaid cases, and 26,000 General Relief Cases. In two major cities in my district, over one an a half million dollars in total was spent in Welfare costs during the month of October. In the city of Lawrence, approximately $716,000 was paid out in October to 6,860 recipients. For that same month, 8,225 Lowell welfare cases cost the State approximately $894,000.

I applaud the goals of the Equal Opportunity and Full Employment Act. There is not a city or state in the nation which can tolerate long-term unemployment as we have experienced. The cost of such a trial is too high economically and socially. As the authors of the bill have stated, there is no need to have talented citizens out of work and unused industrial and technological resources when all of our needs are far from realized.

The Nation clearly needs a mechanism to insure that jobs do exist for those who seek them. I am currently drafting legislation to establish a Youth Employ

ment Office as one way of reducing present and future unemployment among the youth in my district and nationwide. In October the unemployment rate for youths ages 16 through 19 was 19.9 percent; the jobless rate for minority youths in the same month was 37 percent. Our economic situation presently discourages employment among persons entering the labor force from high school, particularly those in urban areas. Employment in the trades where many of these young people seek jobs has been severely reduced. Nationwide, the October jobless rate in the construction industry was 17.9 percent; in the manufacturing industry, it was 10.2 percent. The Youth Employment Office, of course, would be one small step toward the attainment of a broader national goal, that of full employment.

I believe that the Equal Opportunity and Full Employment Bill answers our national need for drastically reduced unemployment and the right of all persons to gainful and productive employment.

Mr. TSONGAS. I want to make two quick points. Then I will refer to those who will speak after me.

The unemployment rate in Lowell is 12.6 percent. In Lawrence it is 13.9 percent. When you are talking about aid to New York, when you are talking about the right to have a job, the right to food, indeed there is regionalism in this country perpetrated by the administration. My statement talks to that. I would hope that that would in due course be looked at.

The other point as raised by Mr. Buchanan and yourself, Mr. Chairman, is the whole question of the defense budget. My district depends on the defense industry to survive. In my district if the defense budget were cut drastically unemployment instead of being 15 or 16 percent will be 25 or 30 percent. So when there is an attempt to cut the budget it is my people who are cut as well.

An individual Congressman, whether he comes from the Lockheed district or Raytheon district or the Boston Naval Shipyard district, you know he represents those people. They are human beings. He has to fight for them. So perhaps we cannot fault those Congressmen. It presents really a Hobson's choice between what he knows is right and what he knows is best for the country on the one hand and his own people.

I don't think there is a district in the country that is more defenseoriented than mine. It is a very real dilemma.

It seems to me that if we can vote for the B-1 bomber as we did in June and say we feel it is in our Nation's interest to have a $40-billion instrument-what is the B-1 bomber? The B-1 bomber is an airplane that flies lower, faster over to the Soviet Union to deliver the nuclear warheads once we have had an all-out exchange of nuclear missiles. So by the time it gets there hours after everything has been obliterated they can then unload their payload of weapons over whatever piece of rubble is left called Moscow, return to a completely obliterated United States and then land and perhaps if there are women in the crew begin to repopulate the country. That little toy is costing $40 billion.

So you take the $40 billion for the B-1 bomber and you ask the question that if we didn't have the B-1 bomber what could we do? Read the newspaper. Did you see that in Illinois there are mountains. of corn piled up because we don't have the rail capacity to move the damn stuff east? There are a lot of people in this world starving.

We are going to mine coal in Wyoming and Montana, hopefully, with this strip-mining bill. That is coming. So why spend the $40 billion on this B-1 toy and not spend it for the rail system? The same people who do the B-1 bomber could be employed to do the rail system and make it viable. Maybe it will be that some people won't starve. It seems to me that it is not a bad alternative. [Applause.]

Mr. TSONGAS. You have my sympathies for a long day ahead of you. There are a lot of people here who don't have a chance to see you as we see you. Iwould defer to them and ask at this point unless you have questions that I be allowed to

Mr. HAWKINS. Thank you, Mr. Tsongas. Can you people hear? We will try to keep our voices up. May I announce that the reason we don't have a second microphone is that it would have cost a great deal of money I am told.

Mr. Tsongas, I notice in your prepared statement that you do speak of the employment of youth and you refer to a bill which you introduced that I want to commend you for, the Youth Employment Office Act. I may not have the correct title. Would you explain to us and the audience the operation of such an office for achieving employment for youth? I think it has a relevant connection.

Mr. TSONGAS. Outside of the building right now there are a number of people who are distributing literature who feel that your efforts are a response in the wrong direction and feel that indeed the system does not respond. Those people presumably for the most part are reasonably well-educated and reasonably articulate. We may disagree. But what they are expressing is that they feel the system doesn't work. We can dismiss that perhaps as some people have said, as a "fringe element of academia." I don't think it is that simple because in my district there are a lot of people who are young, the same age, who are not as articulate, who have never been to college, but who are just as turned off. They won't stand outside and confront us when we come in with interesting dialectics. They are simply turned off.

If you go to Lowell High School or Lawrence High School and you try to find a job it is not that easy. People have decided that there is simply nothing in the system for them, that everyone is doing well but them. And so the only response is dissent. Here the dissent is people outside, distributing literature. But in other parts of the country dissent is more violent, in other parts of the world, where dissent indeed is terrorism.

We who are in the inside do benefit from the system if for no other reason than that we are recipients of that dissent. The dissent is greater with the young because that is when your expectations are higher. That is where the disappointment is greater.

The purpose is to set up a mechanism wherein a young person coming out of school will have a mechanism available for employment. What is the point of being docile if the system simply suppresses you? I don't think it is a question of ideology. It is a question of getting one's piece of the pie. That is what the jobs bill is about.

I think, Mr. Chairman, that you have really done a good job. You are not from this State. You are not from this area. But I think vou have done as much for the people of my district and New England as any Congressman in the Congress and should be commended for that and what you are doing here today. [Applause.]

Mr. HAWKINS. Mr. Tsongas, I did not realize that you are short of time. Otherwise I would not have asked what appears to be the only question. The committee wants to accommodate you. We regret that you can't remain with us. Thank you again for a very excellent statement. [Applause.]

Mr. HAWKINS. Is Mr. David Rosenbloom in the audience?

Is Mr. Bill Spring in the audience?

I understand that several of the witnesses who were scheduled for this afternoon are present with us at this time. In order to facilitate the proceedings as rapidly as possible, let us begin to call on some of them with the undertanding that the other witnesses will be put on as soon as they arrive.

Is Mr. Frank Manning, president, Legislative Council of Older Americans, Boston, Mass., present?

[Applause.]

Mr. HAWKINS. Mr. Manning, we are very pleased to have you here today. You certainly represent a group that is very much involved in this subject of employment. We welcome your testimony. You may proceed.

[Prepared statement of Frank J. Manning follows:]

PREPARED STATEMENT OF FRANK J. MANNING, PRESIDENT, LEGISLATIVE COUNCIL FOR OLDER AMERICANS

The Equal Opportunity and Full Employment Act represents a commitment by this nation that every man and woman able and willing to work is entitled to a productive job. Moreover, it provides the mechanism to achieve this goal. The transformation of our economy to a complete technological state has taken a heavy toll on the workers and retirees of America. Chronic unemployment is one of the worst by-products of our new society because it cuts deeply in the lives of millions of our fellow citizens. It deprives them of the material necessities of life and plays havoc with their mental and physical well-being. It is encouraging, therefore, that a group of congressmen and senators are concerned with this problem. It is a refreshing contrast to the attitude of many in high places who regard unemployment with a casual or indifferent posture.

The summary of this legislation notes that the personal right to employment at a fair rate of compensation is assured by explicit legislative, executive and judicial machinery, and is implemented through utilizing existing structures and frameworks. The Bill requires a comprehensive national economic program, a program to achieve full employment, and stipulates that other economic goals, such as price stability, shall not limit the pursuit of full employment. The inclusion of a National Purpose Budget as a guide to "integrate" National Action to meeting the nation's great national priorities, such as development of natural resources, adequate health care for all, decent housing, mass transit construction, represents a full-scale attack on poverty and deprivation. It is a national disgrace that we have not yet done these things in a land which is rich in material, manpower and money.

I am here today as the representative of the Legislative Council For Older Americans which is affiliated with the National Council of Senior Citizens, and which has fraternal connections with retiree groups all over the country. We have witnessed the devastating effects of inflation, longevity and involuntary retirement on the lives of a majority of our older population. I cannot conceive of an act more cruel than the forced retirement at age 65 of a human being who lacks the resources for a long period of retirement. He no longer has a role in society and suffers, in most cases, a sharp drop in income. In effect, the government has sanctioned discrimination in employment against retirees by adopting age 64 as the age at which the anti-discrimination laws end.

In the year 1968 official Social Security statistics reported that only one-fifth of the Social Security recipients reported earnings. At that time there were about nineteen million two hundred thousand retirees on Social Security. The

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