Impact that the EOP Program is having on the welfare system at the local level and its effect on the Lowell area's welfare population.

The most significant conclusion to be drawn from our program experience to date is that AFDC recipients, on a large scale, can be successfully involved in the structured Job Search effort mandated by the proposed legislation.

Program wise, the residual benefits derived by the welfare system from the successful implementation of our Job Search program have been considerable. In addition to screening out approximately 15% of the area's welfare caseload that were abusing the system by working while collecting full welfare benefits, Job Search is facilitating clients acceptance of employment options that are readily available to them via their own resources. It is not uncommon for a client during the assessment process to be briefed on Job Search activities then decide to accept employment that is available to them rather than participate in Job Search.

The accomplishments of Job Search combined with our operational model which assures involvement of all eligible AFDC recipients in the EOP delivery system without allowing individuals to get lost in that system, has produced a very positive attitude among welfare staff. Caseworkers now energetically refer mandatory recipients and actively recruit volunteers for our program, confident their clients will receive quality employment services that will result in a gainful employment opportunity.

Prior to EOP, referrals of mandatory recipients to the WIN program were viewed by the caseworker as just another required paperwork task that accomplished nothing. Volunteer's were rarely encouraged to participate and the negative attitude that the welfare recipients "will never work" prevailed.

The positive attitudes being instilled in the welfare staff are filtering into the general welfare population. We have found that when confronted with a comprehensive program presented in a professional manner and administered on a equitable basis, Welfare recipients will respond in a positive manner. Recipients are accepting the reality that if they are employable they will be involved in our program and in most cases, are anxious to better their financial situation.

The dramatic increase in employment activity among the area's welfare population has not gone unnoticed by the community. Attitudes and negetive stereotyping are slowly being changed as welfare recipients earn their place as economically productive members of the community.

The Welfare Department is also gaining new creditability. The average taxpayer is encouraged by the news that something is being done to eliminate obvious cases of welfare fraud and that employment is being mandated as a method of reducing the welfare rolls.

"Statistics computed based on 164 entered employments (private sector) through Job Search and Work Training Components.

Senator NELSON. Do you know what percentage of the employers take advantage of the job tax credit?

Mr. HURLEY. We have found that more of them are taking advantage of it. We have had an active marketing activity in Lowell via the prime sponsor and via our PIC. informing individuals of the tax credit.

Senator NELSON. Well, how will the employer know? In other words, you say the applicants are not identified with your agency so they get the job without the employer knowing that.

Mr. HURLEY. Right.

Senator NELSON. And then what happens? Subsequently the employer finds out?

Mr. HURLEY. Most of the use of the tax credits has come in the regular CETA program and in placements after a subsidized activ ity. If somebody goes into an OJT situation, then after the OJT or supported work, they are taking advantage of the tax credit.

That is somewhat of a "Catch-22." I think you hit right on the nose, in the sense that it is a self-directed placement, if they go to the employer with the tax credit, with the voucher, and then they. in essence, are saying, you know, I am coming from a federally supported program.

And I hate to sound negative about it, but maybe we should do a better selling job of CETA or what-have-you, but employers do look somewhat askance at people coming from that system. We have found the self-directed placement to be much more effective than our standard job development practices, working with the job developer, getting the lead for the individual that we had used previous to initiating the job search activity that we presently use. Senator NELSON. Do you have any way of knowing that the employer takes advantage of the job tax credit?

Mr. HURLEY. I have talked to some of the employers in the area, and they are saying that they are using it. One large electronic high-technology firm has said they have used, not just in the Lowell area but in the Massachusetts area, 1 million dollars' worth of tax credits.

Senator NELSON. Mayor, do they use it in your program, do you know?

Mayor DUMAS. Yes, sir; we do, Exxon. We have tried to get as many as we can to. Senator Long, as I told you, when he was in Louisiana the last time with us, when they came down and made their presentation of the first allocation of funds, recommended that.

And we are meeting with the chamber of commerce in Baton Rouge, working closely with them. We are trying to get as many of the industries in Louisiana, especially in Baton Rouge where we work, to take advantage of the tax credit. We think you just accelerate the program if you can.

Senator NELSON. Are they using it in your program, Ms. Eaton' MS. EATON. We have been encouraging the participants to take the tax package out with them when they are searching for work. Like Neil's program, we have been emphasizing self-placement rather then a development of a job for a person.

As far as I know, they have been using it, but whether any employers have taken advantage, I cannot answer.

Mayor DUMAS. May I say one other thing, Senator?

Senator NELSON. Yes.

Mayor DUMAS. I have known you for a long time, and I have been coming up here since 1953 so I have quite a bit of experience here. I have been mayor of Baton Rouge going on my 16th year, and I think this is one of the finest programs.

It is tough being a mayor today, and without this kind of a program, it is going to make it tougher. I think without fear of contradiction, I know of no other program that we have ever participated in that is going to do more good for more people and that Congress is going to come out more ahead with than this program. I think it is good. I hope you use your influence to approve this program, because it is good. Anything new like that, we are bound to make some mistakes. But I think that as we continue to work and to improve ourselves, this time next year we will probably have a lot better record than today.

We are talking about 50, 55 percent in Baton Rouge. We want to congratulate these people. If they get 76 percent, man, they are doing fine. This is something that I hope that you will really put your teeth into because everybody I have ever talked to, since I have been in Washington praises this program. You know, I am a great revenue sharing man, and you and I have talked about this before, so this is something that is going-I think if you save $2.2 billion, we will not have too much more to get for the revenue sharing.

I thank you very much. [Laughter.]

Senator NELSON. You are a good salesman.

Thank you all very much. We appreciate your taking the time to come and testify today.

Our next panel is Mr. Gary Walker, vice president, Manpower Demonstration Research Corp.; Rosalie L. Tryon, director, ADVOCAP, a community action agency and supported worksite in Wisconsin.

Now, if you would identify yourselves for the reporter.

STATEMENT OF GARY C. WALKER, VICE PRESIDENT, MANPOWER DEMONSTRATION RESEARCH CORP., AND ROSALIE L. TRYON, DIRECTOR, ADVOCAP, A COMMUNITY ACTION AGENCY AND SUPPORTED WORKSITE IN WISCONSIN, A PANEL

MS. TRYON. I am Rosalie Tryon, executive director of ADVOCAP, Fond du Lac, Wis.

Dr. GUERON. Executive vice president, Manpower Demonstration Research Corp.

Mr. WALKER. Gary Walker, senior vice president of the Manpower Demonstration Research Corp.

Senator NELSON. All right. Your statements will be printed in full in the record. You may present them however you wish. If you can summarize for the record, it would be helpful.

Mr. WALKER. Mr. Chairman, for the past 5 years, the Manpower Demonstration Research Corp., has been engaged in overseeing the operations and research of a large-scale demonstration designed, in part, to provide new insights into the relationship between work

and welfare. That demonstration is known as the supported work demonstration.

It was targeted at those with severe employment disabilities: Long-term AFDC recipients, ex-offenders and ex-addicts with very poor employment histories and out-of-school youth who had some contact with the juvenile justice system.

Its purpose was not to teach specific technical job skills but rather to instill in the participants the habits and discipline of the workplace and to provide them with a work record which would help them obtain and maintain regular employment.

The program was operated by locally based, not-for-profit organizations who employ supported workers for a maximum of 12 months. There are currently 19 of these not-for-profit organizations operating supported work around the country, each employing from 100 to 200 participants.

Supported work shares many features with other subsidized work programs like PSE and sheltered workshops, but it is primarily distinguished from those efforts by the following four characteris

tics:

First of all, every job offered a participant has implemented in its structure three basic programmatic techniques: Peer support. graduated stress, and intense supervision. Peer support primarily means that the work takes place in groups of from 5 to 10 people.

Graduated stress means that over the course of the year the productivity and attendance demands on the worker are gradually geared up so that, although they are very low at first, at the end of the 12 months, they approximate that of the normal work force. Intense supervision means that there is one professional supervi sor for every six to eight participants.

Second, each of these local programs offers a range of real work situations to which these programmatic techniques are applied. For example, most of the programs have construction work, such as rehabilitating houses for the elderly and poor. One program manages a public park. One has built and is presently operating a day care center. Several do weatherization for the elderly and poor. Several do manufacturing work such as furniture and concrete products for local municipalities.

The content of the work has been kept as real as possible.

Third, many of these worksites earn revenues. Around 20 percent of the operating costs of the supported work program is cov ered by revenues earned from the worksites. This means there is less public money required for this program. It also introduces a greater sense of reality and standards into the work, for both the program managers and the participants.

Fourth, one method of funding used by this program and a rather innovative one is welfare diversion, and that simply means that participant welfare payments have been diverted to the program and are used as part of their wage payments for work performed.

To determine the effects of supported work, a control group methodology was used. This is the first time that this kind of methodology has ever been used in an employment and training program, and it worked very simply. Eligible participants were randomly assigned either to an experimental group, which means