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or organizations for research pertaining to the purposes of

2 this part. He shall also provide for the careful and systematic 3 evaluation of programs related to the purposes of this part, 4 directly or by contracting for independent evaluations, with a 5 view to measuring specific benefits, so far as practical, and 6 providing information needed to assess the relative potential 7 of the various approaches employed in such programs for 8 contributing significantly to the solution of employment and 9 employment-related problems of the economically disadvan10 taged. He shall further be required, as appropriate, to dis11 seminate such findings to prime sponsors of comprehensive 12 community employment and training programs under the 13 Comprehensive Community Training and Employment Act 14 and to other interested agencies. In formulating plans for 15 the implementation of this section, the Director shall consult 16 with the Secretary of Labor and, as appropriate, with the 17 heads of other Federal agencies.

18

19

"SPECIAL CONDITIONS

"SEC. 105. Participants in programs under this part 20 shall not be deemed Federal employees and shall not be 21 subject to the provisions of law relating to Federal employment, including those relating to hours of work, rates of compensation, leave, unemployment compensation, and Fed24 eral employment benefits.";

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23

(2) redesignating part D thereof as part B and

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3

4

5

6

sections 150 through 155 as sections 121 through 126,

respectively;

(3) striking out part E thereof; and

(4) redesignating part F as part C and section

171 as section 141.

(b) Effective with respect to fiscal years after June 30, 7 1971, section 810 (a) of the Economic Opportunity Act of 8 1964 is amended by striking the word "and" at the end 9 of paragraph (2) thereof, by inserting in lieu of the period 10 at the end of paragraph (3) a semicolon and the word "and", 11 and by adding the following new paragraph:

12

13

14

15

"(4) with the approval of the Secretary of Labor,

in Job Corps centers operated under title II of the Comprehensive Employment and Training Act.".

(c) Grants and contracts entered into pursuant to the 16 provisions of title I of the Economic Opportunity Act of 1964 17 and the Manpower Development and Training Act of 1962 18 prior to the effective date set forth in subsections (a) and 19 (b) of this section shall not be affected by the provisions 20 of this section.

Senator NELSON. This morning our witness is Mr. Malcolm Lovell, Assistant Secretary for Manpower of the U.S. Department of Labor. Mr. Lovell, the committee is very pleased to have you appear this morning. Your testimony will appear in full in the record, and you many present it in anyway you desire.

We have 6 days of hearings scheduled in the hope that we can get a bill marked up and passed this year. The administration is welcome to appear at any time during the course of these hearings and present any further testimony, either clarifying or responding to testimony of other witnesses so that we may have a complete record on the position of the administration on all points that are raised.

Mr. Lovell is accompanied this morning by Mr. William B. Hewitt. Both of you are free to comment on any aspects of the pending proposal that you desire.

STATEMENT OF MALCOLM LOVELL, ASSISTANT SECRETARY FOR MANPOWER, U.S. DEPARTMENT OF LABOR, WASHINGTON, D.C., ACCOMPANIED BY WILLIAM B. HEWITT, ACTING ASSOCIATE MANPOWER ADMINISTRATOR, U.S. DEPARTMENT OF LABOR, AND PROFESSIONAL STAFF

Mr. LOVELL. Thank you very much, Senator. We very much appreciate your holding these hearings. I know you will try to get legislation through this year, and we are very grateful.

Let me go through this statement. My testimony is not too long. and perhaps I can skip some of it, but I would like to cover some of the major points in it.

Secretary Hodgson testified before this subcommittee on May 6 of last year on S. 1243, the administration's proposed Manpower Revenue Sharing Act. Today I again urge this subcommittee to seriously consider that act.

This year, 1972, marks the 10th anniversary of the Manpower Development and Training Act, the act which put the Department of Labor into the manpower training business. The primary concern of that act, when it was first passed, was with the technological obsolescence which, it was feared, would face many people as a result of an anticipated explosion of technology.

Subsequently, both for this act and for the delegated programs of the Economic Opportunity Act, the thrusts changed and broadened and emphasis shifted to other target groups. Our primary concern became centered upon the disadvantaged and reducing poverty.

The work incentive program (WIN), authorized in title IV of the Social Security Act, is another pillar of manpower legislative authority. This is a work requirement supplement to the aid to families with dependent children component of our social security effort. WIN became effective in 1968 and, as you know, now has been recently revised by amendments. We hope it will be furthered by H.R. 1.

Thus, the growth of the Federal manpower effort has been accompanied by the addition of new goals: To overcome technological obsolescence, poverty, and to reduce the welfare load. The shift from a wartime to a peacetime economy and the battle against inflation has added yet a fourth goal, the reduction of unemployment, as re

flected in the Emergency Employment Act of 1971. And, as the President stated in his February 7 message to Congress on manpower revenue sharing, manpower services are an essential tool in our effort to revive the productivity of our labor force so that we can meet increasingly stiff foreign competition.

We believe our manpower programs have accomplished much that is good. Thousands of people have been taught new skills and given the opportunity to make a better life for themselves. Clearly, however, step-by-step growth, not of a single, unified, flexible system, but of separate systems, dependent upon three different legislative authorities, and reflecting a series of focuses, or goals-technological change, antipoverty, welfare reform, economic dislocation, and improved productivity is an increasingly unsatisfactory response to manpower service needs. As manpower services have come to be seen as a tool for alleviating one or another problem, each focus has been accompanied by specific, by in large Federal, programs designed to meet the perceived needs of the moment. As a result, we have a nonsystem, with gaps in some cases, overlaps in others, and most importantly, without sufficient flexibility to reform itself.

În addition, I might add parenthetically that there is an interesting point regarding the Economic Opportunity Act, which expired last July, and the Manpower and Development Act which expires this July, to show how hard it is to eliminate programs. It may be we will continue operating those programs under continuing resolutions without substantive legislation having been passed. Of course, the local level is concerned with whether programs will continue. It is another reason for greater speed in getting new legislation.

In addition to the problem of different legislative authorities, there is a problem of conceiving manpower programs in national terms. In the past; we have responded to manpower problems with Federal programs. This response was, of course, dictated by fiscal realitiesonly the Federal Government can afford to provide realistic funding levels. But Federal funding does not necessarily require Federal control. Where Federal control will assure the most effective delivery of services or attainment of objectives, we should not hesitate to use it. But in the manpower services field, Federal control has proven to be unsatisfactory and often even counterproductive.

There are three interrelated reasons for this. The first is that manpower services are perceived as tools in alleviating the several problems already enumerated. But not all these problems are relevant in any given community at any given time. For example, unemployment is far less a problem in Houston than it is in Seattle. Some communities may have very little chronic poverty, yet have relatively severe unemployment problems due to the changeover to a peacetime economy.

The second reason is that the manpower service needs of States and localities are most clearly perceived and can be most expeditiously met by the States and localities themselves, assuming, of course, that they are provided with the resources to do so. The rigid, categorical approach of our present system provides few options to State and local officials, precludes them from decisionmaking, and inhibits responsive action with redtape and paperwork related to Federal standards and

guidelines. The result is an inability of local officials to respond expeditiously to their constituents' manpower needs, and frustration on the part of the constituents themselves, who naturally look first to their local elected official for help.

The third reason is best seen from the perspective of these constituents-from the viewpoint of the individual in need of manpower services. He may have become unemployed by a changing economy and need to upgrade his skills to become employable again, or he may be a disadvantaged person in need of basic education, or he may be a Vietnam veteran in need of labor market assistance as he makes the difficult transition from a soldier to a civilian.

It really doesn't make any difference to the individual under which of the several goals the manpower services may be provided, or under which statute he may be eligible. He needs a job or training, or basic education. But now in too many cases our present system fails to respond to his needs because the categorical program or programs available in his community do not provide the particular package of services he needs, or are not of the type for which he is eligible.

Further, an allocation of available resources must be made. Currently, that allocation is dictated by Federal conceptions of needs rather than by locally perceived priorities.

To us the conclusion is inescapable. We must transfer the focus of manpower efforts in this Nation. Today they have a programmatic focus-one established in Washington. Current response to the needs of a locality is dictated by its capacity to meet Federal programmatic requirements. This arrangement is upside down.

Manpower services should be in response to the needs of the individual. Those needs are best perceived and responded to where the individual lives. So local responsiveness must be combined with Federal resources to meet best the needs of our citizens.

The Manpower Revenue Sharing Act represents the administration's major manpower reform proposal before the Congress. It is designed to overcome the disadvantages of the present system that are due to haphazard growth and changing of, or additions to, national manpower priorities. I would like to speak for a few minutes about the three principles underlying manpower revenue sharing which must be preserved in any new comprehensive manpower legislation: decategorization, decentralization, and consolidation of existing manpower development efforts.

First, with respect to decategorization, the Manpower Revenue Sharing Act does not mandate any existing categorical program or guarantee its perpetuation in any community. However, the key to special revenue sharing is flexibility; it would not prohibit the continuation of any project which a particular locality feels effectively serves its workers' needs. The Manpower Revenue Sharing Act would authorize a broad range of services including classroom instruction, training on the job, and actual job opportunities. These services, all designed to help move people toward self-supporting employment. augmented by temporary income support, relocation assistance, child care, and other supportive services authorized by the act, would make it possible for our communities to mount integrated manpower development programs truly responsive to their own priority needs.