public service employment in its more idealistic sense; that is, in the sense of the jobs in public service that are ordinarily required regardless of whether or not we have a recession or a boom period. I think that there has been some finding of prestigous groups that have indicated the need for anywhere from 3 to 5 million such jobs that are permanently required in the public service field, jobs of a very high quality nature.

It was our thought, however, that where these jobs are of a temporary nature, even under CETA—and I think that both Congressman Reuss as well as myself have introduced bills to provide for much better even transitional or temporary jobs. Even the transitional jobs in many instances some of us at least feel should be those jobs that eventually lead to high quality jobs-they should lead some place, they should not simply be leaf raking or the jobs that possibly Arthur Burns spoke of to us in his Athens, Ga., speech but even those jobs somehow should be built into their education and training such as we have not had under CETA, for example, but I don't know whether we really differ too basically from the point that you made.

I just simply wanted to indicate that both types of public service employment have been discussed by the committee and maybe we have not made that again clear in the bill. I think it should be understandable that any particular proposal is not going to be a panacea, is not going to contain everything that has been spoken of.

We have had five conferences in academic climates-that is, at the University of Columbia, at the University of California, at Ohio State and many others-in which we have received a tremendous amount of I think advice, criticism, and whatever you would like to classify it as from those in the academic world. I think most of it has been helpful, and as a result of that we are in the process of making certain changes.

I think it is in that spirit that we accept your criticism today. Basically, however, I think we certainly appreciate the fact that we agree on the principle and it is just a matter of coming to some closer understanding as to some of the provisions in the bill.

I don't know whether you wish to react to my statements or not or if you wish to accept other questions and react to them in general. Dr. Perlman.

Mr. PERLMAN. I would just like to react to your statements. The first, I stand corrected, is on the definition of adult Americans. A more careful reading of the proposed bill would have averted that error on my part but on the issue of discrimination I still think that we are not talking exactly about the same thing. Given the sponsors of the bill, their political leanings and supporters, I have no question or doubt that discrimination in the classical sense will be averted and antidiscrimination would be strongly supported, but I am talking about the need for categorical programs and policies to attack unemployment among those who, because of past discrimination have been susceptible to high rates.

I don't think, as perhaps Dr. Somers said, a blanket statement that we want a 3-percent rate. We are going to set up programs to get that rate, encourage private industry. I don't think you will get it without some specific manpower or other programs designed to

attack the particular unemployment problems of those populations or subgroups that are characteristically high.

Mr. HAWKINS. This has been given to me as somewthat of an explanation in that regard. On page 19 of the bill, the committee print dated March 20, it is paragraph (d) on page 19 beginning on line 18 and extending over on to the next page. We spell it out.

Each Job Guarantee Office in carrying out its responsibilities shall insure that among projects planned that adequate consideration be given to such individuals and groups as may face special obstacles in finding and holding useful and rewarding employment and shall provide or have provided through the coordination of existing programs special assistance including but not limited to counseling, training, and where necessary, day care, transportation and migration assistance. Such individuals and groups shall includeand then we name nine of the special groups, some of which I think you have cited today.

Now again it may be that you may feel that this does not go as far as you think that it should but this at least was the initial approach that the committee adopted.

Mr. PERLMAN. I again stand corrected.

Mr. HAWKINS. I don't think you stand corrected so much as we have not furnished you with the latest committee print.

Mr. PERLMAN. Or maybe it should be emphasized in this thing which is widely circulated.

Mr. HAWKINS. That is a condensation and I am afraid does not really convey everything that should have been conveyed in the bill. Obviously it is a summary rather than a complete compilation of all of the provisions.

I don't think we really are correcting you because I think that your point is well taken and certainly-whether it is already included or not, I think the committee is going to direct its attention to the points you have raised. I think that is the important thing.

Mr. PERLMAN. Relative to that I think I can comment to a positive contribution and not deny something that you have included. Perhaps the bill should have an outreach component which actually seeks people in unemployment difficulties. There is still a hazy area of whether you are going to job seekers or those who are ready, willing and able to work. I think that that is an important difference in your target population, especially in these groups.

Mr. HAWKINS. That is a troublesome area and I think we have to some extent not adequately dealt with it in this proposal. There is some shaded areas there that certainly need addressing. The bill attempted to cover obviously those who were included in concealed unemployment or even the discouraged unemployment. We felt it was necessary to take care of that and that is why we got away from the percentage approach and got down to the question of individual right, not knowing what the labor supply really is, and I don't think anvone is such a genius as to be able to cite what it really is.

Perhaps the 3 percent target which we have now modified to 2 years in order to fit in with the presidential reports that are required may seem unrealistic to some individuals, but we felt that making the mandate would lead to accountability as well as responsibility on the part of any administration and all of the public officials. involved in any administration to work toward that target.

Obviously, cooperation with Congress would be required in many instances as well. I don't think we have been any more visionary or any more unrealistic than what we have done in other statutes such as, let's say, a housing act with the goal of a decent home and a suitable environment for every American family which we have certainly avoided even though it has been stated and restated over and over and over again. I am not so sure that in this sense we are being completely realistic; however, in certain periods I think you would have to concede that we have gotten very close to doing that within that limited time.

Now it may be cause of such things as an outside enemy or defense effort that we were required to do it, but I think that the Truman administration pretty well did it with some slight assistance from the Korean War. Certainly that administration did it and also in that short period of time which I think answers another point that was raised without the problem of inflation. The question now is whether or not we do it without that problem exerting itself.

May I simply ask in that connection, let's say that we do it in that short period of time. I think, Dr. Cain, you indicated that you thought it would be highly inflationary on a short-range basis. Would there not be other methods of attacking inflation since it would be the lesser of the evils? Would it not be better to attack the inflation problem directly rather than sacrifice jobs and not reach the target?

Mr. CAIN. Well, I think you would have the options of trying to attack it, you might say, frontally with something like controls which then sets off other problems associated with controls or as another option you could devise policies to accommodate the inflation that is occurring and to make it more tolerable and to provide, for example, for increases in incomes associated with people on fixed income and in other ways make the inflation that might be inevitably more tolerable.

I think, particularly, if in the near term future one can envision the combined goals of full employment or low levels of employment and price stability, then the transition in which there is some inflation and some accommodation to it is quite tolerable and acceptable. I do think that they are hard to avoid within this short period of time that has been mentioned in the bill, the 18-months period.

Mr. HAWKINS. Well, you at least give some hope.

Mr. CAIN. Yes. I think the record of our past 30 years does indicate there are periods when we have had low unemployment and reasonably stable prices.

Mr. HAWKINS. I get the consensus of opinion of all three witnesses that it is possible and highly desirable to attack unemployment and inflation simultaneously and not as at the present time of trading one off against the other. Is that correct?

Mr. CAIN. I put my own feelings even more strongly on the side of attaching unemployment as the most serious of our macroenomic problems and I look upon inflation as indeed involving hurting too many people but to some extent there is hurt, for example, to creditors that is offset by benefits to the debtors whereas unemployment has total loss and it has a very uneven incidence in the population and it is affecting a group already less well off on average, so I think it is much

more serious of those dual problems of macroeconomic policy. I agree with the emphasis that you are giving in your bill to unemployment as the most serious problem.

Mr. HAWKINS. Thank you.

Mr. Buchanan.

Mr. BUCHANAN. Thank you, Mr. Chairman.

Gentlemen, I, too, many years ago did graduate work in economics at the University of Virginia. That school was founded by Thomas Jefferson who gave the school its motto, which I think is a rather good one-"For here we are not afraid to follow the truth wherever it may lead us or to tolerate any error so long as reason is left to combat it.' It seems to me you have made a rather significant contribution in the pursuit of truth this morning on this issue. You share the commitment reflected by the sponsors of H.R. 50 as to the desirability and necessity of full employment as the goal for society. As I understand your testimony you say it can be achieved and that it can be achieved with acceptable levels of inflation.

The questions which most concern me are how you go about such achievement and whether the specific provisions of H.R. 50 comprise the right formula to achieve this result. You have mentioned the problem of manpower training programs, and it would seem to me that unless we can find a way to mesh education and training with the jobs that are and the jobs that can now be created in particular places, you have a hard time achieving full employment.

I think many witnesses have agreed that there is a role for the private sector. There has to be real economic growth in the private sector, to achieve full employment. There is a role for Government at every level.

With that preface I would like to ask your comment on the particular provisions of H.R. 50 as to the expansion of the role of the Federal Government and some of the jobs it takes on under this legislation; as to economic impact, not only on the Federal budget but on the economy of the Federal Government taking on the roles here described; as to whether there are any dangers of the creation of the situation of which we have heard so much in which from the highest motives, Government takes on a job to do and creates programs and systems and administering bureaucracies and the problem remains unsolved but there is simply more weight added to the overall burden of the Federal Establishment; and finally, as to the viability of these provisions over against other things you might do to meet the goal of full employment.

Now that is all kind of broad and general but I want to invite. your response now and subsequently because it does seem to me that you have not only raised some questions that are important but you have some expertise that could be helpful in finding solutions that may not be fully covered in this legislation.

Mr. SOMERS. If I might comment, I think the stress on public service employment is well placed and that would seem to be the best answer for getting the unemployment rate down as quickly as possible, and I don't know whether you can do it in 18 months or whether it will take 2 years or 3 years or 4 years but I think through public service employment we have the best hope. However, there are these

problems associated with a major Federal role in continuing public service employment over any number of years along the lines partly that you have been discussing.

What does it mean to have the Federal Government subsidizing jobs even if they are in State and local agencies over many years? If these are to be decent, rewarding jobs as we all want them to be— presumably they are at least at the minimum wage or higher-what about workers switching out of low-level private jobs to take government jobs? Is there a problem of a continuing bureaucracy in the Federal sector subsidizing employment?

I think this can work very well as a countercyclical measure going over a year or two as long as there is some transition of these workers back into private employment, not to say that there are not great unmet needs at State and local levels but whether the Federal Government shall be subsidizing those jobs forever at State and local levels and what this means for the Federal bureaucracy and the basic system that enterprise that we live in-I don't particularly know. The other problem involved which we have stressed is that the followup evaluation of the Emergency Employment Act and what we know about the public service employment under CETA is that unless special measures are taken to enroll large numbers of minorities and the disadvantaged in those programs they are going to be bypassed and you will get primarily experienced workers, at the present time many of those that have been laid off at State and local levels earlier being rehired under the subsidy program of public service employment.

Even in the Emergency Employment Act of 1971 where they have the number of target groups specified, including the disadvantaged, the followup study shows that only a very small percentage of those who got jobs under the Emergency Employment Act at State and local governments were truly disadvantaged. So I think special measures have to be taken to make sure that the hardest hit unemployment groups get involved in any expanded unemployment service program and then they have to somehow wrestle with this very difficult problem of how do you make it transitional while still meeting all of the needs for employment at State and local levels? How do you avoid the situation in which the Federal Government is permanently subsidizing hundreds of thousands, maybe millions of jobs at State and local levels? It is a tough problem.

Mr. PERLMAN. I have nothing constructive to add on this other than to reiterate what Professor Somers said with emphasis. The public employment program aspect of the Emergency Employment Act, at least the studies of it show-focused on the reemployment of those I think at the high school graduate level-was the average person covered in it. I think the thing to avoid is the bureaucractic tendencies of showing success when you get down to the local level from federally funding each agency that has a natural desire to be successful in its results.

Let me just very briefly touch on one area which I am familiar with, this career education in the schools which is an attempt to do something about the employment possibility at the earliest level of schools. Program after program says that as a condition for participation in school/work combined programs is an assurance of graduation