by the rule "last hired, first fired," they are losing jobs which they desperately want and at which they have been successful. Even were the full target of NAB to be reached (338,000 hires by June) neglecting terminations-the impact of the program on the total manpower situation must be considered against the background of the fact that unemployment in the United States as a whole has increased by about 1 million since the program began. Thus the committee may want to question whether the JOBS program can continue as a mainstay of Federal manpower policy, drawing a commitment of $375 million as proposed for fiscal 1971, at a time when many firms in the private sector are laying off significant numbers of their permanent work force including some JOBS trainees. In addition to fundamental questions such as these, the subcommittee staff has tried to look into the actual operation of the program as now constituted, in order to determine whether its mode of operation was actually such as to meet the intent of Congress in appropriating funds for its operation. Much of the report is, in fact, devoted to presenting the results of this inquiry. CONCLUSIONS Any attempt to reach conclusions on the JOBS program at thi stage in its history must recognize that the principal achievement of the program may very well not be subject to precise evaluation. That accomplishment is the enlistment of 25,000 private firms in the task of finding jobs for the most disadvantaged citizens of this Nation, backed by Federal financing. As the Chicago Regional Manpower Administrator, Lewis Nicolini, stated in an interview with a staff member: The best thing about the JOBS program is that it has eliminated all the excuses private industry had for not hiring the disadvantaged. If you send them a disadvantaged applicant, they might say, "He has insufficient education." Well, now JOBS will provide the education. If the employer says, "He can't see well enough," JOBS will provide eyeglasses. If the employer says, "He doesn't have transportation to get to work," JOBS will provide the transportation, at least temporarily. The committee doubtless will want to hear testimony on this truly significant accomplishment. If the JOBS program has, in fact, produced a basic change in the hiring practices of American enterprise and permanently opened doors to opportunity which have historically been closed to the disadvantaged, it will stand as a major achievement. Shortcomings in the program, however, appear to be substantial. The report will deal with them at some length. In any list of shortcomings, the following would seem to be especially important: 1. The JOBS program's vulnerability to recession must be kept uppermost in mind in determining its place in the overall package of Federal manpower programs. 2. The basic figures on hires, terminations, and retentions are difficult to verify. The weakness of this basic data, especially in the voluntary portion of the program, makes any solid evaluation of the program and any comparison with other manpower programs—extremely difficult. 3. It is not easy to establish whether the on-the-job training, basic education, medical services, and other benefits of the program have, in fact, been supplied. In some instances, it is clear that they have not been provided. This also makes it difficult to evaluate the program. For example, if we do not know whether training and remedial services were provided, shall we attribute the results of the program to the providing of these unique services, or merely to the fact that industry was encouraged to provide jobs for the disadvantaged in exchange for a wage subsidy? 4. It is difficult to establish whether beneficiaries of this program were truly hard-core disadvantaged, or whether the most qualified trainees have been "creamed" from the upper layers of the target group-intentionally or inadvertently. 5. Although the subcommittee's study has been too limited to make overly broad generalizations, it is clear that there have been instances where individual firms have taken advantage of JOBS contracts. Although some abuses are inevitable in all large public programs, it appears that the JOBS program has encountered abuses for specific reasons-the extremely brief review given to many proposed contracts, the great desire to produce results in a short time, and the pressure from the private sponsors of the program to avoid serious monitoring of the programs during their operation. 6. The value of the JOBS program for disadvantaged youth is questionable. Employers indicate very limited success in dealing with trainees 21 and under. The suggestion during manpower discussions of early 1969 that the JOBS program could be substantially expanded to make up for cuts in other youth programs may not be borne out in experience. 7. The haste with which contracts are often negotiated and signed, and the lack of follow-up assistance from either the National Alliance of Businessmen or the Department of Labor, has led to frequent misunderstandings of contract obligations, the danger of fraud, and an inability to catch problems before they become serious. 8. The program has generated a large number of firms offering to subcontract for supportive services. Some appear to be fly-bynight outfits, unable to carry out what they promise. They solicit employers to obtain JOBS contracts with the promise that this will lower their wage costs. Such employers often do not understand what they are really getting into. On the other hand, some subcontractors trying to carry out the terms of the contract are pressured by employers to drop supportive services such as job-related basic education, and put the trainees immediately to work on a full-time basis. 9. To the extent that a company's programs are poorly planned, offer such low wages that the poor are actually being exploited, or offer jobs which soon disappear due to seasonal cycles or poor management, trainees may end up back on the streets more bitter than before at the American economic system, and less inclined than ever to believe that either government or business will give them any opportunity in American society as it is now constituted. V. SUMMARY In summary, the fundamental principle of JOBS-hire first, then train-is a sound one, and can work. A number of firms holding JOBS contracts have designed excellent programs for hiring, training, and retaining disadvantaged Americans. The program, however, suffers from insufficient supervision. Many employers have gotten involved in JOBS with little understanding of how to work effectively with the hard core. Others have sought and obtained JOBS contracts primarily as a means of cutting costs or solving personnel problems during a period of full employment and, in some instances, actual labor shortages. Mr. Roy L. Coffee, vice president of Lowenstein Textile Mills (of which PAC Columbia Mills is a wholly owned subsidiary), stated in a letter to the Regional Manpower Administrator: "We feel that this program will mutually benefit our community and our company.' He goes on to say: Our turnover has been excessive, especially among the jobs that are staffed from the hard core section. The supportive services, and particularly the counseling offered in the MA-5 program, in our opinion, should be of great benefit to us and to the worker. We are in a real tight labor market in the Columbia area and this additional training that should increase our retention rate will enable us to continue running our equipment full. Another statement of this kind is found in a letter from Mr. Thurman Barrett, Jr., of the San Antonio Home Builders Association: Our industry has endured a critical shortage of skilled labor for some time now and it is evident that only through such a program as the JOBS MA/3 program can there be a relief to this situation. The JOBS program, operating in a full employment economy, has sometimes been used to recruit and try to hold workers for low-level jobs with little or no future. These are often jobs which would be taken largely by the poor and uneducated in any event. Thus some JOBS contracts appear to have been used to provide certain employers with what amounts to a subsidized labor force. The government has reimbursed some employers for on-the-job training which involved little real training. There has been little participation by representatives of the poor in the negotiation and administration of such contracts. A great deal of the NAB effort has gone into obtaining job pledges and producing publicity. A limited amount of effort has gone into working with 40-963 O-70 pt. 42 employers to insure that their programs are well designed and effectively run, and are genuinely aiding the poor. Further, the whole economic incentive of the program rests on the assumption of a full-employment economy sorely needing entrylevel workers. As Levitan, Mangum and Taggart report in their study "Economic Opportunity in the Ghetto": To separate the effects of an early blossoming of social consciousness from those of a tightening labor market and the company's consistent needs for unskilled workers is to attempt to unscramble the proverbial egg. The NAB director for the Detroit area claimed that if the city were given another pledge of 20,000, it would be unable to fill the jobs, especially since two of every three unemployed are women and most manufacturing jobs are restricted by law or practice to men. Obviously, the automobile companies had nowhere to turn but to the disadvantaged (p. 31). As the economy cools off, and as the contracts generated by the war in Vietnam are reduced, as workers must be laid off, JOBS contracts may lose their attractiveness for employers. Under such conditions, some JOBS contractors offering bona fide training and good pay will find the contracts unprofitable, or even-in a time of layoffsimpossible. Whatever problems may be present in the NAB/JOBS Program as it now stands, however, there is no question that it has made significant contributions to the problem of finding jobs for the hard-core unemployed. As with any new program, particularly one with such an ambitious goal, it is hardly surprising that problems have been encountered in attempting to carry out, on a practical and nationwide scale, one of the first programs to significantly link together Government and private enterprise for the solution of a most pressing social problem. As Levitan, Mangum and Taggart indicate: *** for every anecdote of a firm on the make or less than The benefits of the JOBS program go beyond the jobs given to thousands of disadvantaged persons. Many of the executives who have worked for NAB have gone back to their parent companies with a greatly increased understanding of the problems of the disadvantaged, and an increased concern for contributing to the solution of those problems. Firms which previously would not have thought of hiring the hard-core, or perhaps even any member of a minority group. have found that a change in this policy is a benefit not only to the hard-core disadvantaged, but to themselves. Recommendations for improvement in the JOBS program might then include: (1) Less push to negotiate large dollar amounts of JOBS contracts and more concentration on high-quality, effective programs. Labo Department representatives should be rewarded for negotiating contracts that will carry out the stated purpose of the program, rathe than for spending their appropriations. (2) Members of community and minority groups should be included in the negotiating process from the very beginning, both to give help and advice and to aid in screening out exploitative contracts. The Government Accounting Office recommendation that CEP operations be coordinated fully with the JOBS program needs to be carried out. (3) Much closer supervision is needed to see that supportive services contracted for are actually provided, and that instances of rapid turnover are quickly spotted and corrected. (4) Proposed JOBS contracts which do not offer reasonable wage levels upon completion of training would seem to be open to serious question. (This issue, incidentally, tends to divide NAB and the Labor Department, on the one hand, from regional offices of the Office of Economic Opportunity and Community Action and CEP representatives on the other hand. NAB and the Labor Department press to fill job pledges. OEO, CAA's and CEP's tend to question whether filling some low-paying job pledges will merely "perpetuate poverty.") (5) Particular care should be taken to assure that on-the-job training a fundamental of the JOBS program is actually provided and is of sufficient value to justify the substantial amount of Federal money invested in it. If real training is not being provided, beyond that given to a typical employee not covered by a JOBS contract, then consideration should be given either to discontinuing the payment for training or labeling it as a direct subsidy to encourage the hiring of the disadvantaged. (6) Special scrutiny should be given to the activities of subcontractors, to make certain that whatever services they provide are useful, appropriate, and realistically priced. |