could in order to get the hearings completed on the manpower bill. At the same time, I asked the staff to get some figures on the JOBS program, which the staff did a very good job on. At the time it was going to press, I talked to Senator Javits. Senator Javits came to me, and I offered to hold up the printing of it if he wanted it held up. We held it up for the Labor Department to insert an answer. I would have held it up 2 or 3 weeks to give everybody a chance to look at it, except that that would have delayed the hearings, and it was my understanding that nobdy wanted the hearings delayed. So I am really not familiar with any intentional leaks of anything to the press, and the staff report, I think, is a very good one, and one I needed, at least. I am the only one who is attending all the hearings, and I wanted to gather together all the information we could, and the staff report is basically letters written to me, letters in response to a letter which I wrote to every contractor in this country who has a contract over $500,000, and I thought that the full committee would like to see what it said.

A representative of the NAB yesterday was critical of it. I hope he reads the GAO report, which is a lot tougher than anything the staff said.

Senator MURPHY. May I say that this is all news to me, and I had no intention whatsoever in disagreeing that the Chairman should not have written these letters. I just merely state that I think that since this is a two-party committee, that it might be nice if the ranking member on the minority side had had a chance to see the letters and know about the letters and know about the report before the time.

As a matter of fact, I had called Senator Javits and told him I wanted to register an objection, because I heard the report had gotten into the press, and it was my concern that the report might be assumed to be the report of the committee, which it was not. It was actually the report, the personal report provided for the Chairman, which is perfectly proper.

This was my only concern, that there be a confusion created by the fact that the hearings had not been completed, both sides had not been heard, and there were some witnesses who still wanted to be heard. I was instrumental in having the Assistant Secretary of Labor's letter put in the report.

I am pleased that the Secretary of Labor will have a chance to appear, on Monday, I believe, to testify.

Senator NELSON. He was scheduled to appear long before the report was ever completed, and I asked him last-probably it was last year-but anyway, I said I would like to have your testimony, and the questions that are raised we would like to have you respond to them, and he has been before the committee twice now since we started the hearings on the Manpower Act. This was scheduled way in advance and he has had a chance to come again. The problem was that I needed some report, and I think the committee did, too, about the JOBS program around the country before we had these hearings. Otherwise, the subcommittee staff report wouldn't be of much value. So I had a choice of having the report printed and available before the hearing started, or postponing the hearings which would

have delayed consideration of the Manpower bill that the administration has proposed.

Senator MURPHY. I think it was perfectly proper. My only concern was the fact that the report did get to the press and I am sure that some people at least thought this was the official committee report, which it was not.

Senator NELSON. I think the one instance you are referring to is that a very good reporter heard of one instance and called up a man who had worked for the company. His story was given to him, not by the staff, but by one who had worked for this company. The NAB fellow was upset yesterday. I pointed out that the biggest story in the country is the Dallas story. That is the one in which the contract was canceled. That was on the front page in Texas and across the country. Our committee had nothing to do with that. We knew nothing about it.

Senator MURPHY. I apologize for not being in attendance as often as I would like, because I have great interest in the work of the subcommittee. You know it is my custom to be present, but yesterday I had an executive, and the day before I had an executive, so that it is just not possible to make them all.

Senator NELSON. I understand that very well. I know how busy everybody is, and there are a number of subcommittees, but if I want to accommodate this administration, I can't hold up these hearings to accommodate all of the members, most of whom can't attend on any particular date. That has been the problem.

Senator MURPHY. I will do my best to see the administration appreciates your thoughtfulness.

Senator NELSON. Would you identify yourselves for the record, please.

STATEMENT OF HERBERT BUTLER, FRED ABERLIN, AND MICHAEL BARTELS OF MANPOWER SERVICE TRAINING DIVISION, MANPOWER, INC., AND WILLIAM PATTON OF PEOPLES DRUG STORE

Mr. ABERLIN. I am Fred Aberlin. On my left is Mike Bartels, national director of the MTS Division. On my right is Herb Butler, who is the city director here in Washington.

Mr. PATTON. My name is William Patton. I am secretary of Peoples Drug Stores.

Senator NELSON. Do you have a statement?

Mr. ABERLIN. Yes, sir.

Senator NELSON. You may present it however you desire. Mr. ABERLIN. My name is Fred Aberlin. I am vice president for Corporate Planning at Manpower, Inc. We are an international company, operating through 626 offices in 35 countries. Our principal business is the employment of people with widely varying skills and degrees of proficiency, on temporary assignments-373,750 of them during the past fiscal year, to be exact.

It is precisely because we are in the business of matching up real people with real jobs that our company was an early pioneer in the field of personnel development. A major thrust of our business is proper and effective deployment of personnel in the work force of business and industry. Training and education are major components in the end result we term "work readiness." Where neglected, the result is employment of people in the work force who are unprepared for productive participation.

Manpower, Inc., since it was founded in 1948, has trained hundreds of thousands of people for temporary assignments.

As a company committed to the development of the human resources needed to fill the ever-growing labor needs of business and industry, we have also long championed the right of participation in our free enterprise system of previously neglected groups, such as the hard-core unemployed, the elderly, the housewives, and the young.

Indeed, we are no "fly-by-nighter" in this field. Our corporate president, Elmer Winter, was a cofounder and first president of the Milwaukee Voluntary Equal Employment Opportunity Council. This was a model plan to cope with the employment problems of blacks and other minority groups a plan which has been copied in many other parts of the country. Through it, several thousand disadvantaged people have found training and jobs.

Moreover, our company since 1964 has sponsored the Nation's leading nonprofit clearinghouse for summer jobs for young people. Called Youthpower, it has helped place over 44,000 young people in summer jobs since its inception. Training clinics are conducted in many cities to give the youngsters at no cost to them-the skills and experience they need to fill specific job needs within a particular community.

I could go on and on and relate to you many more instances of the social commitment long made and practiced by our company. My intention here, however, is not to buildup Manpower, Inc., but merely to demonstrate how we happened to be early and deeply involved in the the areas of training and education and why we remain, despite some financial reverses, in these areas today.

Incidentally, I should note in passing that we are in no way connected with the Manpower Training Consortium of New York City, despite the extreme similarity to name. There have been several particular cases brought to the committee's attention through the staff's report which I would like to discuss, and two contracts in particular.

One of my company's earliest and biggest financial reverses was incurred in connection with one of the first MA-3 contracts let by the Department of Labor shortly after the formation of the $2.3 million commitment in Federal training funds, was setup so that Manpower, Ine, would be the employer for a year of training, following which the trainees would be put on the permanent payroll of our customer clients. The contract proposal, dated May 15, 1968, was executed by the Department of Labor on June 30, 1968.

The concept of the contract was that Manpower, Inc. was in a unique position to provide steady employment for trainees for 1 year through its customer clients. At the same time, through its newly formed division, Manpower Teaching Services, since renamed Manpower Training Services, the company could provide the training. educational, and supportive services necessary to support the trainee during his first year on the job. The early experience of Manpower Teaching Services in the Milwaukee area had been quite successful in providing orientation, job-related basic education, counseling, job coaching, and other supportive services to disadvantaged workers for customer companies. These early programs had been executed under private contract with the customer companies with no Government subsidies. This new contract was an attempt to put the wide experience of Manpower, Inc., its ability to place workers with a wide variety of clients, and the experience of its newly formed division, together for the mutual advantage of companies who needed new labor sources and the disadvantaged worker who had difficulty maintaining steady work.

The key provisions of the contract were as follows: A total of 800 job slots were assigned to Manpower, Inc.; a total of $2,300,000 was allocated by the Labor Department to the execution of the contract. Funds were billable on a monthly basis for each day a trainee was on pay status.

Two hundred training slots were alloted in each of four cities: Cincinnati, Cleveland, Detroit, and Minneapolis.

In each city five general job categories were assigned, namely: clerk general, clerk receiving, machine operator, maintenance helper, and material handler.

Trainees were to be employees of Manpower, Inc., which would handle all payrolling and would, in turn, bill the customer company for actual hours worked by the trainee.

In each case the trainee would receive the following services from Manpower Teaching Services:

Orientation, job-related basic education, on-the-job training, some transportation allowance, allowance for some health care as necessary, job coaching and counseling as necessary, and supervisor sensitivity training.

The training, as called for in the contract, was to cover 52 weeks for each trainee, including orientation, 300 hours of remedial education spread over 50 weeks at the rate of 6 hours per week, and all skill training necessary to bring the employee from an entry-level job status up to the maximum job level he could reasonably achieve within 1 year consistent with company requirements. All other supportive services necessary to achieve the goal of permanent employment would be provided for.

In the months immediately after the execution of a contract, offices were setup in the cities subject to the contract and personnel were hired to implement the program. It is estimated that something in excess of $50,000 was expended in this implementation effort. Hundreds of calls were made on prospective companies, most of whom had pledged to hire employees under the NAB program, but, after several months of effort in three of the cities with no results Manpower Teaching Services requested the Labor Department to reduce the contract to the Detroit component alone where new personnel were assigned and a new effort made.

Since none of the efforts to implement the program proved successful, Manpower requested that the Labor Department deobligate the funds assigned to the contract with the exception of Detroit, as noted above. It was at the request of the region V office of the Labor Department in Chicago that the company did not request deobligation of the funds in Detroit and allowed the regional office to declare non-performance. This allowed, they thought, the regional office to retain control over the funds allocated to the Detroit component of the contract. Although Manpower expended great effort and many thousands of dollars to implement this program, it was reimbursed only $536 for the very brief participation of one company in Cleveland.

The principal problem with this contract seemed to be the provision that the trainee would remain on the Manpower payroll for the year of his training. It was originally thought that this would provide great flexibility in assigning the trainees to jobs. In other words, if one job situation did not workout to either the trainee's or the employer's satisfaction, other arrangements could get made through the Manpower offices. But the companies were evidently not interested in this kind of arrangement. That this was the principal factor in the failure of this program to get off the ground is illustrated by the contrast with the MA programs with which MTS has been associated. Where the trainee was an employee of the company customer, there was comparatively little difficulty in selling the concepts of the training and education although they were basically the same in both programs.

of

Only in the case of this one contract was Manpower Training Services almost totally unable to elicit participation from customer companies.

From our MTS operations here in the Washington area, we also have gained a wealth of knowledge as to ways of effectively implementing the training phase of the JOBS program.

We are not proud of the fact, for example, that, as subcontractors we have experienced a raw retention rate of only 17 percent in the People's Drug contract.

This, incidentally, is the second contract called out in the staff's report.

We of course were shooting for a much higher figure than 17 percent. Nevertheless, there were certain factors operative in this partic ular contract implementation which help explain what happened and why.

First of all, pay scale for the trainee was $1.80 an hour, the minimum wage for retail store workers in the Washington, D.C. area. Note that this means the trainee received gross pay of $72, less taxes, et cetera, if he worked a full week. If he were on unemployment compensation he could get $40 a week tax-free for 32 full weeks doing nothing. The financial gain incentive is missing.

Second, the jobs provided were of menial, arduous, and dead end variety. You already have on record a statement by the firm's personnel manager that extremely high turnover in those jobs is not unusual.

Third, and perhaps most important, trainees for this particular company were scattered by ones or two throughout the firm's retail outlets. ts. This prevented effective on-the-job coaching and counseling. with respect to both the supervisor and the trainee. Why did this