INTRODUCTION: THE CASE FOR MANPOWER REFORM

Nine years after passage of the Manpower Development and Training Act of 1962 and seven years after passage of the Economic Opportunity Act of 1964, the nation continues to face critical problems in its effort to educate and train citizens for productive jobs in the labor market.

Despite worthwhile achievements under MDTA and EOA manpower programs, millions of Americans are still not effectively served by manpower training programs, and the economic conditions which these programs were designed to serve have generally worsened rather than improved.

Poverty increased by 5% between 1969 and 1970, reversing a ten year record of decline.

Unemployment is at or near ten-year record levels, severely complicating efforts to locate, train and employ the disadvantaged citizens who were the original target population for MDTA and EOA man

power programs.

Existing manpower programs appear to be inadequate to cope with present or projected future unemployment levels.

In addition, experience gained under MDTA and EOA indicates that comprehensive reform of manpower training programs is necessary if they are to meet the real needs of citizens for whom they were designed.

This background document will describe the present status of manpower reform legislation and define some of the issues which must be dealt with.

Here are several of the significant demands for reform in manpower training programs:

I propose a comprehensive new Manpower Training Act that would pull together much of the array of Federal training services and make it possible for State and local government to respond to the needs of the individual trainee. *** The act which I propose would:

1. Consolidate major manpower development programs administered by the Department of Labor.

2. Provide flexible funding of manpower training services so that they can be sensitive to and focused on local needs.

3. Decentralize administration of manpower services to States and metropolitan areas, as Governors and mayors evidence interest, build managerial capacity, and demonstrate effective performance.

4. Provide more equitable allowances for trainees.

5. Create a career development plan for trainees, tailored to suit their individual capabilities and ambitions.

6. Establish a national computerized job bank to match job seekers with job vacancies.

7. Authorize the use of the comprehensive manpower training system as an economic stabilizer.-President Nixon, August 12, 1969.

During the Sixties the Federal government launched a series of manpower programs. The over-all direction and thrust of these efforts was salutary; they emphasized the needs of millions of citizens who could not compete successfully in the labor market because of a lack of skills or motivation, deficient education, or discrimination. The execution of these programs, however, left much to be desired. The multiplicity of program sponsors at the local level made the delivery of effective manpower services very difficult. The programs were characterized by varying eligibility criteria, overlapping services, and conflicting regulations. After 7 years of expanding the manpower programs, there is a pressing need to overhaul these categorical and disjointed efforts.

The administration and Congress have recognized the pressing need for a comprehensive manpower effort building on the experience of the sixties. Three major proposals are now pending before Congress, and we believe that the enactment of new legislation will provide, in the words of Secretary of Labor George P. Shultz, "more effective services. to the individuals and communities that need them *** and at the same time invigorate established institutions of government * * * and our manpower programs." Enactment of the best provisions in each of the three bills would be an achievement comparable to the initiation and expansion of the manpower programs of the last 7 years.-National Manpower Policy Task Force, position paper, February 12, 1970.

Complicating matters is the current economic slump. The manpower programs were designed for and implemented. under favorable economic conditions. Labor markets were extremely tight in the final half of the 1960s, generating a need for additional workers which made it easier to find employment for those who were helped. But the recession has made jobs scarce, and new manpower approaches and priorities are needed under current conditions. Certainly a public employment program of some sort assumes prime importance when private sector jobs are not available. But other changes are also necessary if the manpower programs are to operate effectively in a slack economy.-Professor Sar Levitan, Center for Manpower Policy Studies, George Washington University, April 30, 1971 paper.

A. LEGISLATIVE BACKGROUND

Comprehensive reform of federal manpower training programs has been suggested by two consecutive administrations and by Congressional leaders in both political parties with increasing urgency for the past several years. In 1967 Congress enacted legislation to establish "community work and training programs" to link together manpower training programs at the local level. Both the previous and present

administrations have largely ignored this directive. In 1969 President Nixon proposed the Manpower Training Act of 1969 which would have transferred responsibility for manpower programs to Governors and, through them, to selected Mayors as they demonstrated a capacity to administer such programs. That bill was not acted upon in either house.

The Senate Subcommittee on Employment, Manpower and Poverty developed the Employment and Manpower Act of 1970 which passed the Senate by a vote of 68 to 6. Similar legislation passed the House, and both houses approved the report of a Senate-House conference committee. However, the bill was vetoed by the President on December 16, 1970. (See p. 412.)

Since that time the Administration has proposed the Manpower Revenue Sharing Act of 1971 (S. 1243). Other bills have been developed by persons representing vocational schools and the Interstate Conference of Employment Security Agencies, as well as individual Senators and Congressmen. These bills will be considered in public hearings in the near future.

Following the veto of the Employment and Manpower Act in December 1970, and the sudden increase of unemployment to the level of 6.2%, the Senate Subcommittee on Employment, Manpower and Poverty developed the Emergency Employment Act of 1971 as "stop-gap" legislation. This bill which quickly passed both houses of Congress and was signed into law by the President on July 12, 1971, made $1 billion available in fiscal 1972 to the Secretary of Labor for allocation to cities, counties and states to hire the unemployed and underemployed in public service jobs. For fiscal 1973 the Emergency Employment Act authorizes an additional $1.25 billion. The Act expires July 1, 1973; however, if unemployment should average below 4.5% for three consecutive months no further contract could be signed under the Act except for special areas of 6% unemployment and higher for which $250 million was reserved in each of the two fiscal years. (See text of act on page 479, and data on allocations, guidelines, etc. on pages 175 to 347.)

It is expected that the experience gained under the Emergency Employment Act will be an important issue in the consideration of comprehensive manpower reform legislation. The Emergency Employment Act provides previously unavailable information on the operation of manpower programs by state and local governments and on public service employment as a tool in manpower policy.

B. CRUCIAL ISSUES IN MANPOWER REFORM

Based on the experience gained in the consideration of manpower legislation in 1969 and 1970, as well as the reaction to the Emergency Employment Act, the principal issues in comprehensive manpower reform seem to be the following:

1. Who shall be the "prime sponsors" of manpower training programs-states, counties, cities, private nonprofit agencies, the federal government or some combination of these?

2. How comprehensive shall the legislation be? (Most recent manpower reform bills have been restricted to programs such as those operated under MDTA and OEO. However, some individuals advocate

much more far-reaching legislation which would give "prime sponsors" authority over vocational education, vocational rehabilitation, the State Employment Services and manpower programs operated by other federal agencies such as the Defense Department.)

3. What shall be the role of public service employment in a new comprehensive manpower training system? How large should the program be? Should the public service jobs be permanent, temporary or "transitional"? Who should be eligible to be hired?

4. What shall the federal role be? To what extent should the federal government relinquish authority to approve and oversee manpower programs? Should its role be mainly that of allocating funds under a specific formula, as proposed under "Manpower Revenue Sharing"? Or, should the federal government maintain a strong role to guarantee that manpower training funds are used effectively, particularly so as to meet the needs of the disadvantaged and members of minority groups?

5. Shall existing "categorical programs" such as MDTA institutional training, Job Corps, Neighborhood Youth Corps, Operation Mainstream, Public Service Careers, and OIC be maintained as at present; should they be terminated as of some specific date, or should their future be left to the individual judgment of each designated prime sponsor around the country?

On the following pages the subcommittee majority staff has undertaken a brief discussion of each of these issues, attempting mainly to portray the various arguments which are advanced by interested parties in the consideration of manpower legislation.

1. Prime Sponsors

Much of the difficulty in developing an effective system for designing and administering manpower training programs arises from the difficulty in selecting the individuals or agencies who will be primarily responsible for designing and operating programs. It is generally agreed that, by their very nature, manpower training programs cannot be most effective when "run out of Washington." They involve coordination with many state and local institutions such as public schools, vocational schools, employment agencies, and welfare agencies, as well as the public and private labor markets. Thus, most suggestions for manpower reform include the suggestion that new sponsors be selected for these programs, preferably state or local elected officials.

This widely acceptable reform, however, is severely complicated by the complexity of federal, state and local governmental relations. Persons primarily concerned about the protection of civil rights have generally advocated that the federal government maintain principal responsibility for manpower training programs designed to serve the disadvantaged and members of minority groups. Spokesmen for the states generally support a strong, centralized "comprehensive state plan" as the best way of achieving the desired degree of coordination between manpower training programs and all of the related programs for which state government has considerable responsibility. Spokesmen for the cities have generally insisted that manpower training programs and the placing of people in jobs are functions which must be operated at the community level rather than the state level. For example, it is suggested that the elected officials of the city of New

York are in a much better position to design and operate manpower programs for disadvantaged New York city residents than are officials in the state capitol at Albany.

If a decision is made to allow cities to serve as "prime sponsors," then a secondary issue becomes the size of the city to be accorded this right. In the Employment and Manpower Act of 1970 the cutoff level was set at 100,000 population.

The administration has argued for as few prime sponsors as possible in the interests of efficient administration. Spokesmen for smaller cities, however, argue that it makes little difference whether the federal government deals with 250 or 400 or 600 prime sponsors (compared with approximately 10,000 under the present system). What is important, these city spokesmen contend, is the right of a city to have the freedom and responsibility to design and operate a program suited to its own needs.

The role of private nonprofit agencies further complicates the prime sponsorship debate. Many existing manpower programs are operated through private nonprofit agencies such as Community Action Agencies, religious and educational groups, farm organizations, YMCAs and YWCAS and similar organizations. If private nonprofit agencies are not eligible to be sponsors, it is argued that many of those with the greatest commitment and the longest experience in manpower programs will be prevented from continuing their work, and that this will lead to disruption, confusion and loss of valuable expertise.

Questions are often raised as to the capability of various agencies to serve as prime sponsors. In an effort to strengthen three of the principal potential sponsors-Governors, Mayors, and Community Action Agencies-the Labor Department and the Office of Economic Opportunity have been making substantial grants to hire manpower specialists and improve manpower planning capability.

States have been urged to establish state manpower planning councils bringing together the Governor, the heads of state agencies with manpower responsibilities and citizen appointees representing labor, business, and the target population. Both the Labor Department and OEO have expressed the hope that these grants would improve the capability of state and local elected officials and Community Action Agencies in operating manpower programs whether comprehensive manpower reform legislation is enacted or not. It can be assumed that in the consideration of manpower reorganization in this session of the Congress, unlike the situation two years earlier, all of the states, most of the larger cities, and many of the Community Action Agencies. will have a much higher degree of expertise in manpower planning. In the Manpower Training Act of 1969 the Administration proposed to operate manpower training programs wherever possible through prime sponsors who would serve an entire Standard Metropolitan Statistical Area (SMSA). The goal was to achieve coordinated programs in labor market areas, eliminating the necessity of restricting training opportunities to residents of a specific unit of government and restricting job placements to employers within the same political boundaries. Despite the obvious advantages of such a coordinated program, the concept of operating manpower programs on an SMSAbasis provoked criticism to the effect that there is no single logical