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of the country on foundation business, and my devotion to this subject and my great respect for you and the tremendous work that you've done in this area encouraged me to accept the invitation despite somewhat difficult timing. But I would like to make a brief statement. I did want to come because I think this is a critical issue.

We have some views that perhaps would be helpful. First, let me say that I think, certainly, the question of the employment and income differential between minorities, especially blacks and Hispanics, and others is a matter-or certainly should be a matter of great public concern. It is a differential that has limited the opportunities for minorities in this country for many years. And if we do not continue to focus on this and develop ways and means for reducing the differential, then we will never be in a position for minorities to fulfill their hopes and aspirations for the good life that this Nation has to offer.

I believe that the state of the economy is a major factor affecting this differential and the opportunities of influencing minority economic status. I think if we look over the last several years, however, we find something that is very interesting. We find that the American economy has produced a significant number of jobs. The rate of job creation in the American economy has been very vigorous over the past several years.

In 1977, I believe, something more than 3 million new jobs were created. However, despite that job creation, the evidence shows that the experience among minorities has been somewhat unfavorable. Despite the great increase in the number of jobs newly created in the American economy, the rate of unemployment among blacks has not declined very much. And the rate of unemployment among black youth, in particular, has been very sticky downward.

I like to think, Congressman, that blacks are like the caboose on the train. When the train speeds up, blacks speed up. When the train slows down, the caboose slows down. But it is in the nature of the case that the caboose never seems to approach the position of the engine.

Now, if we look over the past several years, not only has that been the case but it seems almost as if the caboose has been shifted to another track. That is to say that we have a very serious problem of unemployment, the lack of economic progress among minority groups, even when there is vigorous job creation in the American economy.

I think that in looking ahead we have to recognize that the problem here is one having to do with job opportunities for minorities. That is the major problem and that is where most of the emphasis should be in our manpower and employment policies. I think we need targeted labor and employment policies. I think we need targeted labor market programs to improve the relative position of minorities and especially minority youth. We need targeted employment instruments in order to reach the full employment of these groups and in the process contribute to the attainment of full employment for the economy at large. Now, there are many who suggest that with respect to youth unemployment, if we just leave things alone and let demographic forces have their play, this problem will solve itself. Indeed, there are those who suggest that the changes in the number of young people in the labor force will contribute to a sharp reduction in their unemployment. Let me make it clear that I am not one who shares that view, especially with respect to minority youth.

I am one who believes the outlook for this economy over the next 5 years is one of relatively slow growth and relatively high inflation, through 1985.

I suspect that in that type of an environment what we will see is continued competition among groups. We will also see some reduction in the rate of growth in the number of young whites in the labor force. But there is very little evidence-in fact there is evidence to suggest that minority youth will not decline in significant numbers, but in fact, that the growth in the number of these two groups, 16 to 24, will diverge.

From 1977 through 1990, for example, there is expected to be very little change in the numbers of blacks between the ages of 16 and 24, while the number of whites in that age category is expected to decline. And so those who look at demographic changes as the potential source of solution to the problem of minority youth unemployment, I think, are barking up the wrong tree. They are looking in the wrong place. and the wish might be the father of the thought, but the result is likely to be otherwise.

It is especially likely to be otherwise to the degree that the minority youth continue to be heavily concentrated in areas that are suffering from limited job creation in the private sector, very limited opportunities in small business and midsized business opportunities in the cities, and, in fact, in some rural areas.

I think that if we look at where these young people are located, you will see there that they are not located in the places where jobs are expanding very rapidly. Now, there is some evidence from recent studies of youth unemployment conducted by such organizations as the National Bureau of Economic Research, Ohio State University's "Study of the National Longitudinal Survey," in which Professor Adams played a role in the analysis of some of those data, also research on the entitlement program that tell us a little bit more than we knew before about the nature of the problem of youth unemployment, and provide some guidelines on what might be useful approaches for getting at these problems.

I might add here that the Rockefeller Foundation is pleased to support some of that research and is continuing to address this issue. În fact, the foundation in 1977 developed a major new program to address the problems of minority youth unemployment, and that was in part one of the reasons I was invited to accept my present position and to take leave from the Wharton School, where I was a member of the faculty for 7 years.

I think that out of this research there are several things that we can see. One is that there is only a relatively small number of youth who are in serious need, with respect to the inability to find jobs, and a serious problem of unemployment. The group is heavily concentrated in low-income minority youth, who have serious difficulties finding the first job. Many youth who are unemployed today are unemployed in the process of looking for a job, but if you look at their income, if you look at certain family characteristics, educational qualifications and so forth, it would be difficult to say that their unemployment would lead one to conclude that they are in serious distress.

However, certainly a significant number of monority youth are in serious distress as a result of their unemployment experiences and the data that I have seen, at least, suggest to me that this group should be the object of great attention and public policy.

As to answers about what we might do about this, I would like to call your attention to the conclusion of the American Assembly, which Ms. Sawhill and I had the great privilege to direct in August of this year at Arden House, New York, where we brought together 70 of the Nation's leading citizens to meet for 3 days, considering the question of youth unemployment.

These persons met, they debated, they considered a wide range of issues, and at the end of their deliberation, came to a conclusion which is stated in the report of the American Assembly, which I will make available to you for publication. They concluded that the goal over the next decade should be a sufficient increase in the employability of youth and in the quantity and quality of job opportunities, so that: (a) There is a long-term improvement in unsubsidized employment and earnings prospects of disadvantaged youth; (b) that the differential employment prospects of minority groups and other youth are greatly narrowed; and (c) that overall youth joblessness declines substantially.

This group also concluded that the long-term structural nature of the problem requires that the Nation establish and maintain a set of youth employment policies which have stability and continuity. Moreover, since youth, especially minority youth, are disproportionately affected by a recession, we should increase the resources committed to resolving this problem in the face of a downturn in the economy.

Now, I found that a very interesting and very valuable conclusion coming out of this very disparate group, many of whom had very different views about this problem prior to going into the American Assembly, but who were able to agree on this set of goals.

Let me hasten to add that there are some things in the area of manpower policy or employment and training policy which I would simply suggest-without developing them-that might be looked at as ways of trying to improve the situation, especially for youth.

One useful goal, it seems to me, is better linkages between schools and the labor market. We simply must find a way to have our schools do a better job of preparing young people to take their place in the world of work. This might include different approaches to counseling, improvements in the job placement function in public schools, and certainly an improvement in basic education in urban schools. We have far too many minority youth coming out of public school systems in places like Philadelphia, New York, and perhaps Baltimore-I'm not familiar with the Baltimore system but I am familiar with Philadelphia, the city of my birth-and I know that there are far too many kids coming out of the public school system with diplomas in their hands, who can hardly read and write. The school system is doing a miserable job in preparing these kids to accept any but the most menial jobs in the private sector in that city.

Second, I think we need to improve the quality of work experience programs; that is, we need to make the work experience programs closer to the requirements that young people will find in the world of work. We need to improve the supervision in many of the work experience programs, to establish a set of standards to reward good performance, to penalize poor performance; that is, we need to do more to make these work experience programs a better preparation for the world of work.

And third, I would say we need to expand significantly the role of the private sector, both in the work experience programs and in the direct hiring for permanent employment. I think we need to continue the targeted job tax credit and in fact should expand that substantially. We might also try on an experimental basis other kinds of devices such as setting aside social security payments for some period of time, or other ways of reducing the cost of hiring young people for some period of time, until they get a foothold in the labor market.

I think, also, that we should look very carefully at the potential of minority business in inner-city areas as a source of employment. What we find in many places is that there are many small grocery stores or other stores, small businesses in minority communities, that if economically viable, or in fact, if they even existed, would provide some part-time or full-time job opportunities.

And so I think that we should not only look at minority business as a device through which minorities increase their participation in the production functions of the Nation, but also as a source of potential job opportunities for many minority young people, and for that matter, minority adults in inner-city areas.

Finally, I would say that we need to look very carefully toward improving the planning and coordination in the use of Federal grants in local communities in order to maximize their potential for expanding job opportunities for disadvantaged youth. In many cases today, cities have an enormous set of revenues coming from the Federal Government through the CETA programs, through the community development block grants, through local public works, through other kinds of Federal grant programs-transportation grants and so forth.

If you look at all of the grant programs as a source of funds available to launch programs through which employment opportunities for minorities and for minority youth might be maximized, I think there would be greater leverage of the funds.

At the present time, it is difficult to coordinate the use of these funds at the local level because of conflicting regulations, such as, one program comes out of the Department of Labor and another comes out of HUD and another comes out of HEW and no one speaks to each other at the local level. There is also a problem of different eligibility standards in many cases, for persons who would be hired in the various programs.

I realize that these programs are authorized with different purposes in mind, but I think if you look at the problem of employment at the local level being one of job creation, and you look at the resources that the Federal Government makes available collectively, there certainly ought to be a better way to use those funds more purposefully toward dealing with the problem of minority unemployment, especially in places where minorities represent a substantial proportion of the local population.

These are some of the things that I think are worthy of consideration, and I would end my statement there. Of course, I would be willing to answer any questions later that you might have.

Thank you very much.

Representative MITCHELL. Thank you very much for quite an interesting statement. I have made copious notes.

[The report of the American Assembly referred to in Mr. Anderson's statement follows:]

Report of

The American Assembly

YOUTH EMPLOYMEN

AUGUST 9-12, 1979
Arden House

Harriman, New York

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