MANPOWER ACT OF 1969

WEDNESDAY, APRIL 29, 1970

HOUSE OF REPRESENTATIVES,

SELECT SUBCOMMITTEE ON LABOR

OF THE COMMITTEE ON EDUCATION AND LABOR,

Washington, D.C. e subcommittee met at 9:30 a.m., pursuant to recess, in room , Rayburn House Office Building, Hon. James G. O'Hara, presid

resent: Representatives Daniels, O'Hara, Burton, Hawkins, GayPucinski, Scherle, Esch, and Steiger.

aff members present: H. D. Reed, Jr., general counsel; Charles cliffe, minority counsel for education; Donald Baker, associate nsel for labor; Austin Sullivan, legislation specialist; Cathy Rono and Sue Nelson, research assistants.

Ir. O'HARA. The select subcommittee will come to order.

The purpose of our hearing today is to continue to take testimony H.R. 10908, H.R. 11620, and H.R. 13472, the Manpower Act and ated bills.

The first witness today is Mr. Robert Wilson, who is executive vice esident for administration of the National Alliance of Businessen. He is accompanied by Mr. Roy Siemiller, vice president for bor liaison.

Mr. Wilson, we would be very pleased to hear from you.

TATEMENT OF ROBERT J. WILSON, EXECUTIVE VICE PRESIDENT FOR ADMINISTRATION AND SECRETARY-TREASURER, NATIONAL ALLIANCE OF BUSINESSMEN; ACCOMPANIED BY GERARD PETERSON, EXECUTIVE VICE PRESIDENT FOR OPERATIONS; P. L. (ROY) SIEMILLER, VICE PRESIDENT FOR LABOR LIAISON; AND JOSEPH CUNNINGHAM, COUNSEL

Mr. WILSON. Mr. Chairman, we would like to submit a statement for the record which includes attached exhibits.

(Statement follows:)

STATEMENT OF ROBERT J. WILSON ON BEHALF OF THE NATIONAL ALLIANCE OF BUSINESSMEN

Mr. Chairman, Honorable Members of the Committee, my name is Robert J. Wilson. I am a businessman, presently Chairman of the Board of Universal Airlines, Inc., and now serving as Executive Vice President for Administration of the National Alliance of Businessmen here in Washington. I have held this position with NAB for the past ten months. With me today is Mr. Gerard Peterson, on loan from Aetna Life and Casualty, and also NAB Executive Vice

President for Operations. Also present is Mr. Roy Siemiller, former Preside of the International Association of Machinists, AFL-CIO, and presently the NAB Vice President for Labor Liaison and Mr. Joseph Cunningham, our counsel, formerly NAB Vice President for Government Relations on loan from the De Pont Company.

The National Alliance of Businessmen appreciates this opportunity to testify before this Committee as to its progress to date in finding meaningful employ ment for the disadvantaged members of our society. We think it particulary fortunate that your Committee has been the first Congressional body to in quire into the workings of the programs of the Alliance, and has done so almos two years to date of our initial assumption of responsibility. Appropriately. we are testifying in conjunction with your hearings on HR 11620, HR 10908 and HR 13472, bills that have as a major purpose the coordination of programs and activities, such as those undertaken by NAB, which aim at providing edu ation and training needed to qualify many Americans for employment. While the Alliance as a bi-partisan, non-profit organization does not as a matter of polit take a position on legislation, we do believe this first exposition of the NAP program should help to place its role in perspective vis a vis other manpowe undertakings and proposals.

On January 23, 1968, President Lyndon B. Johnson sent his first message to Congress following his State of the Union address, and entitled it, “To Earu : Living: The Right of Every American". In it, he posed the question as to how in economy such as ours, capable of sustaining generally high employment over the better part of three decades, could go that extra length to assure every American who is willing to work, the right to earn a living. He enumerated various groups of idle, non-productive people: far too many of our citizens who had been denied that right and who were thus economically and socially disadvantaged. And be indicated this country should no longer tolerate such waste of human talent. B talked of various programs designed to reach what he termed the "hard-core" unemployed-a target population of 1.3 million "forgotten" men and wome Admitting the limitations of existing manpower efforts to reach this group, the President concluded that a program should be undertaken by the private sector of the economy, by the business community, "to train the hard-core unemployed for work in private industry".

While much of the underlying basis on which the Alliance was founded is no doubt familiar to you, it may be interesting for purposes of evaluation to reflect on the premises stated by President Johnson in deciding to initiate this manpower partnership between government and industry. Six out of every seven working Americans are employed in the private sector, he said, and nine out of every ten of those who have received government supported on-the-job training have gone on to good jobs.

Industry, the President said, knows how to train people for the jobs on which its profits depend. On the other hand, businessmen were not engaged to any extent in solving the problems of the disadvantaged American; government funds were not available to defray extra costs of training the disadvantaged*; government manpower services were only a limited part of the private employer's field of personnel experience. To remedy the latter, and build on the foundations of the former, the President then proposed a 350 million dollar manpower training program entitled Job Opportunities in the Business Sector (JOBS), to complement what he hoped would be a major commitment by the private sector to hire and train the disadvantaged in our society. Businessmen responded to this initiative and formed the National Alliance of Businessmen. That is the undertaking on which we are here to report to you today.

Our objectives, we believed, were relatively straightforward. Through a flexible partnership with government, we aimed at locating and identifying the "hardcore" disadvantaged, offering them employment first, and then training. Business

•Disadvantaged is defined as a poor person who does not have suitable employment and be either (1) a school dropout, (2) under 22 or over 45 years of age, (3) handicapped, or (4) subject to special obstacles to employment. Categories of special obstacles to employ ment are: (a) unskilled workers who have had two or more periods of unemployment dur for the past ten years totalling fifteen weeks or more; (b) workers whose last jobs were In occupations of significantly lower skill training than in previous jobs; (c) workers with a family history of dependence on welfare; (d) workers permanently laid-off from jobs in declining industries; and, (e) members of minority groups. Poor persons ara defined as being a member of a family receiving welfare payments, or where net annual fucome in relation to family size does not exceed a specified income. For a non-farm family of four, maximum income could not exceed $3,600 per year.

uld assume the normal cost of training, looking to the government, when ry, for reimbursement of extraordinary costs associated with employing advantaged. They would provide extra services badly needed by many of ew workers, such as job orientation, counselling, transportation, health sic and job related education. They would attempt to eliminate the barthe supervisory and other management levels, to the hiring and promothis group of unskilled employees. Equally direct were the goals set for us President, 500,000 new jobs were to be found for the disadvantaged within ars. 200,000 temporary jobs for needy youth were an additional mission the summer of 1968. Business executives were to be recruited to serve on Board of Directors; to staff its Washington National Office, its regional nd to form the voluntary nucleus of 50 metro offices located in the Nation's cities. It was all very simply stated and, as the business community extremely complex, demanding, sometimes frustrating, and ultimately g in its implementation.

of our metro offices officially began operation in the fifty largest U.S. July 1, 1968. Our first year target was to place on the job 100,000 disged people by June 30, 1969. The Alliance was aware of breaking new first in attempting to mobilize on a nationwide basis the businessmen untry to attack the problems of "hard-core" unemployment and secondly, pping for the first time a true sense of partnership between government istry in combating one of our most pressing urban ills. We stated at the hat we wanted employers to screen in those job applicants that had ly been screened out; who had frequently been turned away at the emt office. We asked for a positive commitment to hire and train and counsel advantaged Americans who had been denied equal employment opporr so many years, as well as those who had no education or work skills to employer. We viewed, and continue to view our mission as primarily to changing business community hiring practices. lieve that in the past two years, employer attitudes have changed in a way-from doing the minimum required by Title VII of the Civil Rights 64, and other federal and state EEO regulatory requirements, to affirmat and company hiring concepts that can make equal job opportunity a Certainly, we have found that in this particular area of manpower trainess is an elusive quality. Yet if we at NAB can wholeheartedly claim ponsible for any major accomplishment in this field over the past two sincerely believe it to be most reflected in the development of a multinew and liberalized hiring techniques.

rse, it is not a one way street. Industry also gains. New and productive are brought into the employer's plant or business. The economy is also ned. Whether viewed from the perspective of increased purchasing these new workers, or the saving in welfare program funds, otherwise for their support, employer interests are better served. One NAB study indicated that a disadvantaged individual taken off welfare and a productive job repaid costs of training within twenty months. This tion was based on a new hire's annual payment of federal income approximately $241 per year. Estimated state tax would be $36 per heral unemployment costs to the employer would be reduced $34 per welfare support payments would be saved to the extent of $1,308 More importantly, NAB has found the business community far more to committing more jobs, as new workers, recruited from the ranks sadvantaged, continue to prove themselves-putting to rest at long ld saw that plenty of jobs exist if only the unemployed were willing and get them. They are willing, and are improving their willingness as loyers develop the means and commitment to employ them.

tell you of some examples of affirmative hiring that NAB has seen American business. Milprint, Inc. of Milwaukee is a medium sized in the packaging industry. The Alliance has long believed that inof medium size and smaller employers is not only crucial to the success ogram, but holds the key to the ultimate reorienting of private empolicies. We have pointed out that primary consideration should to a job applicant's need, rather than his or her initial employment

ons.

is maintained that the new hire can be trained for a job's requiregiven other remedial skills after hiring is accomplished. Milprint, prior ng a NAB employer in 1968, had demanded that every potential em

ployee take a basic general test to determine whether the applicant could meet company standards. When it joined the NAB ranks, Milprint decided to abandon this test that for many of the disadvantaged was a major psychological and substantive obstacle to employment. The results, according to the company, have been encouraging. NAB hires evince a strong desire to work. Company production has not suffered. Intensified orientation and counselling of these new employees has taken the place of formal, rigid testing. The consequent inpact of Milprint's industrial relations climate has not been unsettling. Conversely, the company's potential work force has been given a broadened base. The poor and the unskilled have one more open door at which to seek employment in that city. This story can be repeated a hundredfold, as redesigned personnel practices of NAB employers expose them for the first time to the reality, if not necessity, of hiring and training the "hard-core" disadvantaged.

The Washington office of the IBM Corporation found its hiring procedures focused by NAB on better ways of gaining new employees. As a result of enter ing into a JOBS contract, the company is currently training 15 disadvantaged workers, and 100 others have completed training since the start of the Washington program. The retention rate of these employees is 68%. All referrals to IBM for this program come from the Concentrated Employment Program (CEP) in the District of Columbia.

Forty hours of company orientation are given before training begins. A low level of academic achievement is a criterion for enrollment in the program. No tests are given prior to hiring. Remedial education courses are carried on during the first ten weeks of employment. Entry level salaries begin at $2.30 per hour. Personal economics relating to the trainee's income are stressed, as is personal development. On-the-job training aims at work skills for jobs, such as "customer engineers". Most of the Washington trainees are between 18 and 22 years old; with 66 men trainees and 49 women. The IBM Company is engaged in similar efforts (in support of NAB) in Detroit, Cleveland, Philadelphia and San Fran cisco, and has pledged to train a total of 900 disadvantaged men and women by next year.

In New York, two areas of business that have heretofore been difficult for the disadvantaged to enter have responded to NAB's challenge. In 1969, J. Walter Thompson Company, a major advertising company in that city, launched a pilet program for 13 men under a JOBS contract. The company felt it would require about a year to train the men for the job of traffic assistant, a semi-clerical job keeping track of advertising schedules. In the past, this job required a college degree. The 13 men were chosen from a total of 15 sent by the State Employment Service. All except one were high school dropouts. All had ghetto backgrounds, police records and were considered by the employer as militant. All were poor. Within the first six months of the program, 12 who lacked it had their high school equivalency diplomas. In addition, all were on staff-two as copy writers one as assistant art director, two in photography, one as assistant business man ager, one as a broadcast buyer, one as a media estimator, two in data processing two in traffic and one as an advertising assistant. Two men won scholarships to the University of Wisconsin, and one won a city-wide photography contest. Since the jobs these trainees ended up with were those where a college degree had been absolutely mandatory in the past, the agency decided to take a long, hard look at its job entry requirements at all levels. It then launched a new program under another JOBS contract for 55 slots of the same nature. The agency expanded its training staff and is now in about the sixth month of the new pro gram. It has also been instrumental in encouraging other companies to do like wise, with the result that six agencies are doing programs of their own and 15 others are in consortia. The salaries of the initial J. Walter Thompson trainees (now employees) range from $6.500 to $13,000 annually.

Similarly, the New York chapter of the American Institute of Banking, acting for a consortium of sixteen banking and financial institutions, has undertaken its second JOBS contract, hiring and training 631 disadvantaged individuals for banking careers. In their initial involvement in the NAB program, the major New York banks hired 795 trainees, who were then trained at the AIB headquarters. Remedial education, introduction to the "world of work", business conduct, and special orientation problems were made a part of normal job con tent for the trainees, most of whom possessed no more than fifth to eighth grade education. Wages after training are $2.75 per hour for general clerical and bus ness machine operational assignments. The retention rate under this program was as good as that previously experienced by the banks with their regular first

hires. AIB in New York is now preparing a third training program to hire en larger number of disadvantaged workers. Similar undertakings have initiated by AIB chapters, or members, in locations such as Boston, West. er County, N.Y., Albany, N.Y., Wichita, Kansas, and Hartford, Connecticut. usual occupations have also been part of NAB's search for new jobs. allas, Texas, a wig stylist consortium was developed, consisting of six nies in the wig manufacturing industry. Two hundred and eleven distaged people were hired at a relatively low starting wage of $1.60 per hour. tion was therefore to be particularly watched, since we have learned that ntry level salaries frequently led to high turnover of minority and other antaged trainees. However, the hourly rate at the completion of training d $2.50 and the employers worked very closely with their new trainees. emphasized the positive aspects of employment in their industry including income on completion of training that ranges as high as $150. Opportund a sense of real need in this industry for these new hires was constantly d. As a result, better than 50% of the group were retained. Approximately those who have participated have become instructors, while several others their own shops. Eighty per cent to ninety per cent of the JOBS' employees program are mothers.

xcellent example of a JOBS contract in which the company has committed o be successful with "hard-core" employees exists in Newark, New Jersey. rudential Insurance Company's training program includes twelve hours a f remedial education and skills training, and 25 one-half hours of on-theining. Counselling, day care and medical services, as needed, are also d. Each employee is assigned a "buddy" to work with him during the OJT All educational services, counselling and supplementary skill's training vided by Prudential's own highly qualified employees in the company's Education Center.

ghly sophisticated adult education system is also employed. People as trainers and counselors for these employees must have the ability h all basic education courses, with preference being given to current ees with two to five years service with Prudential. Thirty-two persons en hired so far at a starting wage of $1.98 per hour. Retention is 100%. all employers accept government reimbursement for the extraordinary hiring and training these new workers. For those that do, the Department r estimates that no more than an average of 70% of training costs are turned to the employer. Per capita reimbursement under the JOBS '70 incidentally is approximately $2,400. However, almost three out of four ntaged trainees (70%) are employed at no expense to the government. amples of what non-contract companies have done voluntarily are well eciting.

Isa, an electricity utility, Public Service Company of Oklahoma, worked B to develop a program aimed specifically at jobs for the disadvantaged. pany knew, from earlier experiences with minority group employees, eptance of the disadvantaged by other employees depended largely on bits and attitudes rather than good scores on placement tests. Shortly NAB program was adopted, the company employed as a consultant the xecutive director of the Tulsa Urban League. His duties included both iting of minority group employees and counseling with them after ent. With the cooperation of the company's top management, he also with various management levels, pointing out opportunities for emof the disadvantaged. His counselling efforts, both with management individual employees, were responsible in part, for the company's ntion level.

luals from disadvantaged groups have been employed for unskilled, ed, office and clerical jobs. Some have been assigned to engineering elds such as drafting, engineering aides, engineers and management Several employees coming to the company under the NAB program n upgraded in job assignments. Three of these employees have been d in the company's Apprentice Training Program, which has the of the U.S. Department of Labor's Bureau of Apprenticeship Trainretention rate for NAB entry level jobs for this group has been e company fully expects its continued efforts in recruiting and deof disadvantaged people to yield mutually advantageous results. consin, A. O. Smith Corporation showed what NAB considers to be