MANPOWER ACT OF 1969 THURSDAY, JANUARY 29, 1970 HOUSE OF REPRESENTATIVES, OF THE COMMITTEE ON EDUCATION AND LABOR, Washington, D.C. The subcommittee met at 10 a.m., pursuant to recess, in room 2261, Rayburn House Office Building, Hon. Dominick V. Daniels (chairman of the subcommittee) presiding. Present: Representatives Daniels, Meeds, Burton, Scherle, Quie, Steiger, Erlenborn, and Collins. Staff members present: Daniel H. Krivit, counsel; Marty LaVor, minority legislative coordinator; Loretta Bowen, clerk; and Sue Nelson, research assistant. Mr. DANIELS. The Select Subcommittee on Labor will come to order. Our first witness this morning is Mr. Leon H. Keyserling, consulting economist and attorney in Washington, D.C. STATEMENT OF LEON H. KEYSERLING, PRESIDENT, CONFERENCE ON ECONOMIC PROGRESS, CONSULTING ECONOMIST AND ATTORNEY, WASHINGTON, D.C. Mr. DANIELS. I note that you have a lengthy statement. You are at liberty to read your statement and then leave yourself open to questions, or, if you desire, we may submit your statement for the record, and you may proceed to testify and, thereafter, you will be open to questions by members of the committee. I will leave the choice entirely up to you. Mr. KEYSERLING. Mr. Chairman and members of the committee: I think it would save time for me to summarize most parts of the statement, and perhaps read some parts of it. I would like to submit it for the record, and then to make a statement which will, in part, read it but mainly summarize it. Mr. DANIELS. Without objection, your statement will be incorporated into the record at this point, and you may proceed. (The document referred to follows:) TESTIMONY OF LEON H. KEYSERLING, FORMER CHAIRMAN, COUNCIL OF ECONOMIC ADVISERS; CONSULTING ECONOMIST AND ATTORNEY; PRESIDENT, CONFERENCE ON ECONOMIC PROGRESS Mr. Chairman and Members of the Subcommittee: I deeply appreciate this opportunity to make known my views on H.R. 11620 introduced by Mr. O'Hara and others, H.R. 10908, introduced by Mr. Steiger and others, and H.R. 103472, introduced by Mr. Ayres and others, all pointed in the main toward improving manpower training and service. I applaud the attention being focused upon this important problem by these three thoughtful and challenging proposals. My own continuous interest in manpower training and service goes back at least to 1933, when I commenced to serve as legislative assistant to Senator Robert F. Wagner of New York, who some years earlier had introduced legislation which established the first nationwide employment service. Increasingly over the years, I have recognized the vital significance of such activities, and this recognition has not diminished to this date. But my intensifying involvement in our national economic and social problems since 1946, when I first served on the Council of Economic Advisers, an involvement which has continued since I left the Government service in 1953, has convinced me profoundly that manpower training and service programs cannot achieve their full promise, unless set in the context and perspective of our overall economic and social problems, and all policies and programs designed to deal with these. Manpower training is not an end in itself. Nor even is employment an end in itself, although it contributes mightily to the dignity and utility of the individ ual. We must also be concerned that the allocations of jobs and production are in accord with the priorities of our national needs, lest wealth accumulate and men decay. We must be concerned lest existing patterns of employment, production, and income are not in equilibrium, as the economist would say, and therefore generate basic distortions and imbalances which impair economic growth and lead toward stagnation and recession. All of these aspects of the problem are greatly affected by relative and disparate rates of technological change in various sectors of the economy. We have also learned, from a great deal of recent and costly experience, that manpower and training programs, however well devised and necessary, constitute a mixture of utility and futility unless there is adequate job creation. Despite much argument to the contrary, deficiencies in manpower training and service have not been for many years, and are not now, the main barrier to a genuine and sustained fullemployment program. Moreover, it is only dedication to and creation of a genuine full-employment environment that provides the best guidelines as to what to train people for, and even the best opportunities for training them efficiently and relevantly. I am pleased to note that the bills now before this Committee show recognition of this basic principle, although possibly not enough in some respects. The best illustration of this was our experience during World War II. Just prior to that war, we had about eight million unemployed, and it was said in many quarters that a large portion of these were too old, too unskilled, too unwilling, too untrained, too black or too female, to occupy useful jobs. That refrain was very similar to what ve hear today. But when the bombs dropped on Pearl Harbor sparked us to the imperative necessity of using our human resources fully, and to creating and financing the right number and kinds of jobs in accord with national needs and priorities, most of the idle manpower and womanpower who in 1939 had been deemed deficient in one way or another marched into the factories and elsewhere, and performed well. Vigorous manpower and training programs were necessarily utilized to facilitate this process, but much of the training was done on the jobs because the jobs were there, and we knew what to train people for. today. Our nation and our people are in a troubled and perhaps even dangerous situation Economic growth in real terms, which generates more jobs if it is rapid enough to exceed the pace of technological change, has been declining for three years, has now come to an absolute standstill, and we may even be in an absolute recession. Relative neglect of the geat priorities of our domestic needs has helped to spawn social, civil, and political unrest, even though there are other causes of these developments. Inflation continues to rage, and even to accelerate as the real economy moves further and further away from adequate real growth. The conflict between those who insist that we must forego or postpone our domestic responsibilities until our international burdens become less, and those who insist that we must ignore or underestimate our international burdens in order to meet at once our domestic priorities, is dividing America as seldom before. These conditions do not provide a favorable environment in which to forge a more successful manpower training and service program. Further, the reversal of these conditions is essential to a really successful manpower training and service program. For these reasons, I hope that you will pardon me for turning attention first to these overall problems, and how they may be dealt with more effectively. These overall problems are essentially economic in nature, although they have many component elements. Poverty, unemployment, and underemployment, are economic facts. Bad housing, decaying cities, and deficient schools are economic manifestations. Poisoned airs and waters reflect economic neglect. Civil discontent and friction reflect not only differences of economic circumstance, but also differences of opinion as to what course we should follow. The reasons why the economic problem is therefore so pertinent to a successful manpower training and service program will become even clearer as I move along with my testimony here today. First of all, despite much propaganda to the contrary, the problem of inadequate inadequate economic growth and excessive idleness of manpower and plant is not of recent origin. As my Chart 1 shows, we are all familiar with the average real rate of U.S. economic growth of only 2.4 percent during 1953-1960, with its alternating periods of short upturns, stagnations, and then recessions. I do not share the view that we have made much progress, and certainly we have not made an acceptable degree of progress, toward the solution of this critical problem. The upward movement of the economy from 1960 to 1964 was in the nature of an automatic but greatly inadequate recovery from the late 1960 recession, similar to the automatic but greatly inadequate recoveries from the recessions of 1953-1954 and 1957-1958. National policies and programs cannot claim much credit for the 1960-1964 upturn. From 1964 to 1966, the rewarding economic growth rate of the economy in real terms was considerably responsive to the massive tax cuts of 1964. But the stimulus was only temporary, for reasons which I forecast at that time. Indeed, the ill-designed nature of these tax cuts maintained or aggravated the long-range distortions and imbalances. Thus, as shown on this Chart 1, the average annual real economic growth rate was only 3.4 percent during 1966-1969. The real growth rate was only 2.8 percent from 1968 to 1969, only 1.7 percent from fourth quarter 1968 to fourth quarter 1969, and zero or slightly negative from third to fourth quarter 1969. Current business indexes would seem to indicate that we are now in an absolute recession, although it has not yet gained cumulative force. We do not sufficiently stop to quantify how much these successive periods of short upturns, stagnations, and then recessions have cost us. My Chart 2 offers such a quantification. Measured in 1967 dollars, our failure to sustain the maximum employment, production, and purchasing power which is the objective of the Employment Act of 1946 caused us to forfeit more than 900 billion dollars of total national production during 1953-1968 as a whole, and to forfeit accordingly almost 39 million man-years of employment opportunity. If we should average during the years ahead a record no better than this, and the performance since 1966 augurs no better on the average, ve will forfeit during the years 1969-1977 inclusive almost 1.2 trillion dollars of total national production, and also more than 31 million man-years of employment opportunity. Nobody concerned about the future of our country, especially in view of our alleged current inability to meet human needs adequately, can view this prospect with equanimity. |