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D. ALLOCATION OF $115 MILLION FOR SPECIAL DEMONSTRATION PROGRAMS

NEWS

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HODGSON ALLOCATES $115 MILLION FOR 25,000 ADDITIONAL PUBLIC JOBS

Secretary of Labor J. D. Hodgson today allocated $115 million in Emergency Employment Act funds to 25 areas where approximately 25,000 persons will be hired for public service jobs to help demonstrate the program's impact on the local economy and also the effect on welfare recipients.

Hailed by Secretary Hodgson as "an unprecedented attempt to learn how to get people off welfare and to measure program impact," the two-pronged demonstration is being launched immediately so that the established city, county, and State program agents will have funds by November 1 to begin hiring workers. The Secretary said the Labor Department was "mounting a carefully monitored effort to determine precisely how public employment programs work when established on a large scale.

"The lessons learned from this combined effort of job creation and program study will permit us to make better informed decisions on the use of public service employment resources for the greatest benefit to the unemployed and the Nation," he said.

More than $803 million was previously allocated from the $1 billion appropriation signed by President Nixon August 9. Today's $115 million is from the Secretary's discretionary funds under Section 5 of the Act.

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About $65 million of the newly allocated funds will be used to substantially expand public employment in a dozen areas to permit the assessment of the economic impact of the program. In these areas, public employment will be expanded to absorb 10 percent of the unemployed and in a few areas even a higher percentage will be sought.

The program in these areas will be assessed to measure the impact upon the labor market, types of jobs created, types of persons hired, institutional problems, community reaction, and impact on individual participants during and after the program. This part of the program will create about 9,000 jobs. Some $50 million will be used in 13 areas to create about 16,000 public Jobs earmarked for welfare recipients. Welfare allowances will be combined with Emergency Employment Act funds to provide salaries for the welfare recipients at locally prevailing wage levels. The purpose is to examine the use of public employment as a device to aid in the transition to work of velfare clients and in reducing welfare costs.

The Department of Health, Education, and Welfare and the State welfare and employment service agencies are cooperating in this program.

Both programs will follow the broad outlines of the regular Public Employment Program.

In order to reach measurable levels of impact, it has been necessary to concentrate on a limited number of cities and States.

The bases for choosing these selected labor market areas in both programs include:

... geographical distribution;

... for the high impact areas--need for relatively isolated labor markets to avoid movement of labor force from adjoining, nondemonstration areas and consequent invalidation of data;

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