their contract and our goal was 1,000. It is a reduction of 40 percent at the same cost. Yet, this administration alleges that our operational costs are greater and therefore there is no justification for an organization such as ours to continue as a prime contractor of this type program in Michigan.

Another interesting aspect under the new guidelines from the manpower administrator, it is my understanding the CEP 3, the State employment service, will be allocated 47 percent for administrative costs and 4 percent would go to supportive administrative costs to CAPS.

The eight clusters in northern lower Michigan and those clusters in the Upper Peninsula and, unbelievably, but for 5 percent of the monetary effort, they have got the responsibility tentatively of the outreach, the coaching, the followup, the Operation Mainstream, the Neighborhood Youth Corps.

It is an inequity. To this day, there is no existing agreement in Michigan between the State employment service and any CAP agency in this State to supply subcontracting referral services to the CEP. In the CEP 2, one of the viable aspects was the contract grant of 426,030 for MDTA training. We had 353 people identified. The contract was effective November 1, 1967, and not until August of 1969 did the first MDTA class assemble and commence.

At the end of our program, in a desperate effort we attempted to establish or put the pressure so it would be established with the State employment service, a nurse's aid course for 35 identified people with jobs available upon completion of a 1-month training program.

This did not happen and bulk of the MDTA funds which operate basically through the State employment service were deobligated to the U.S. Treasury.

For all practical purposes, in our State CEP 2 the State agency was not doing the job here and in Michigan today this is the new prime contract of the CEP program with us being the first of the CEP sponsors in the Nation, in the rural area, with a tremendous fiscal record and a history of having in each contract exceeding our goals in the placement of the hard core into meaningful employment.

I could go on. But a few of the remaining key points. Under the new guidelines from the manpower administrator in Washington even if we were prime contractor, there really is not much you do anymore; 85 to 90 percent of the manpower package goes to the State employment services with its inherent flexibility, its folding chairs, its yellow lines, its 8 to 5 o'clock, when historically our people have gone to the home of the poor at 6 in the morning.

We have put them in the car and dug deep, bought tires.

We have been in cars and buses that people live in as homes. In Oscata County, we have one family on record that lives in a cave in the earth.

Our concern, and it is without prejudice, is that the inflexibility in State agency life will not reach out to these people who heretofore prior to the wisdom of the Congress in the sixties were never reached out to or embraced for their needs and their hopes and aspirations for a better life.

For my philosophical beliefs in strong drives, we have learned of the loss of our concentrated employment program. On January 9. 1970, when the Department out of the regional office in Chicago and again there is no rancor and on my part, issued the 36-page report the summations of the reasons that NORCAP or whomever should not longer be a prime contractor in Michigan with 24 of the paragraphs a massive personal attack upon me.

And after 3 years of identification, I have never drawn a paycheck but I have accepted the challenge and I always shall.

Today, NORCAP, the last major ongoing program we have—and I am speaking of the mechanics, not the theory-is an on-the-job training program where historically since November 1966 we have placed approximately 700 people into meaningful training in job situations. The cost per person is less than approximately the direct costs, $300. Yet, I know as do members of our board that arbitrarily and capriciously, irrespective of the fact that our job developers are assisting the State employment service in their CEP 3 program, placing the 143 leftovers, which is the only movement in the CEP program today in rural Michigan, that they will be arbitrarily and without justification in my opinion terminated if they are lucky or if they last that long, on July 31, 1970.

Mr. Chairman, I am powerless to prevent this. But I look to the good intent of Congress to keep good programs for people of need alive through your good judgments, and I conclude by saying I am very appreciative of the chance to appear before you.

And my final thought, I wish Godspeed to the O'Hara bill in the Congress of the United States.

Mr. DANIELS. Thank you, Mr. Moskowitz. I am very appreciative of the fact you brought this problem to our attention.

I recognize Congressman O'Hara.

Mr. O'HARA. Thank you very much, Mr. Moscokitz. I appreciate, too, the support you have shown here for the bill. I want to say as one who has been familiar with your efforts as has my colleague and friend, Congressman Bill Ford, that there is on citizen of our State who has been more dedicated to the objectives of the various manpower programs than you. We appreciate the efforts that you have put forth in that regard.

Mr. DANIELS. The gentlemen from Wisconsin, Mr. Steiger, do you have any questions?

Mr. STEIGER. What is NORCAP, if you will excuse me?

Mr. MOSKOWITZ. That is the western end of the Upper Peninsula. Originally, Congressman Steiger, NORCAP was a community action agency comprising the northern 33 counties of northern lower Michigan, really a forgotten area, where in the REA funds the Upper Peninsula spent $12 million in the first of the Federal programs and you might call them EDA funds in a sense and over a corresponding period, there was $2 million allocated to this area.

It is an effort of a nonremunerative cross section board, to give policy and motivation to staff to relate to the hard core disadvantaged poor. Mr. STEIGER. You mentioned in your statement, if I understood correctly, that under CEP 2, you had a training cost or placement cost of $1,170 per trainee?

Mr. MOSKOWITZ. Yes. We have a cost accounting. Our total expenditure of CEP 2 from November 1, 1968, through January 31, 1970, was $1 million 393,300.

Our cost of employing the 1,148 people that benefited therefrom was $1,170.

The projected cost of the State agency who is now the prime sponsor of the program in Michigan averages out at $2,500 per year, per person, and yet this is a goal unfulfilled. They have problems staffing their centers. There are no subcontracts. I wish them well. But I wish, if it had been possible, for the national administration to remain and existing successful vehicles.

Mr. STEIGER. What is your retention rate on those placed?

Mr. MOSKOWITZ. On-the-job training, where we have placed approximately 700 that have stayed on jobs after completion of training, is approximately, on the figures I received yesterday, 70 percent.

It is my understanding that 50-60 percent hard-core poor complete their training, then you have done well. Under the new guidelines that have hit us, 80 percent of the people we place in the training must complete this or in any given month our contract can be jerked out from under us.

This is an inequity. It is a 6-month contract that expires July 31, 1970. The equivalent of the community action program in the Upper Peninsula of Michigan also has 150 slots in the OJT contract but they are funded through mid-1971 and they have no sudden-death aspect of their contract.

They have no requirement to my knowledge that if 80 percent of those in training do not complete their training the contract will be terminated arbitrarily.

It is a different ballgame, Congressman Steiger. I appreciate your interest. I think you have got some fine colleagues.

Mr. DANIELS. The gentleman from Michigan, Mr. Ford, do you have questions?

Mr. Ford. Mr. Chairman, recognizing the problem we have with transportation and time, I am not going to ask questions. I just want to echo the sentiments expressed already by Mr. O'Hara and suggest for the record that I think there is a representative here of the Chicago office.

The committee ought to have provided some responses and amplifications of the points that you have raised so we will be able to refer to them.

Mr. MOSKOWITZ. This would be fine.

Mr. DANIELS. The gentlemen from California, Mr. Hawkins.

Mr. HAWKINS. I don't have any questions. I would like to commend Mr. Moskowitz. I hope his concern of the people isn't misplaced too much by hoping that Congress is going to do something really early. But I certainly join with you in hoping we can get them to move. Mr. Moscowitz. Thank you, Congressman.

Mr. DANIELS. Thank you, Mr. Moscowitz.
The subcommittee will stand adjourned.

(Whereupon, at 12:55 p.m. the subcommittee adjourned, to reconvene at 10 a.m., Tuesday, March 31, 1970, in Des Moines, Iowa.)

MANPOWER ACT OF 1969

TUESDAY, MARCH 31, 1970

U.S. HOUSE OF REPRESENTATIVES,
SELECT SUBCOMMITTEE ON LABOR,

OF THE COMMITTEE ON EDUCATION AND LABOR,

Des Moines, Iowa.

The subcommittee met at 10 a.m., pursuant to call, in the U.S. Court House, Des Moines, Iowa, Hon. Dominick V. Daniels (chairman of the subcommittee) presiding.

Present: Representatives Daniels, Scherle, and Steiger.

Staff members present: Daniel H. Krivit, counsel to the select subcommittee; Marty L. LaVor, minority legislative coordinator; Will Henderson, minority assistant clerk; and Loretta Bowen, clerk to the subcommittee.

Mr. DANIELS. The Select Subcommittee on Labor will come to order. We meet here today in Des Moines for the purpose of taking testimony on various bills that have been introduced in the Congress of the United States dealing with the important subject of manpower.

We have three bills pending before us, one by my distinguished colleague from Wisconsin, Mr. Steiger, H.R. 10908, one by Congressman O'Hara of Michigan, H.R. 11620, and the administration bill introduced by Congressman Ayres, H.R. 13472.

I would like to mention that the Employment Act of 1946 adopted as a national policy the commitment to strive to maintain a total supply of jobs in the Nation. Since that time numerous legislative enactments have implemented this important goal.

In spite of all of the legislation that has been enacted by the Congress of the United States, we are still faced with the problem of unemployment and underemployed. It is the purpose of these field hearings, first, to learn from the administrators of manpower programs and from elected officials how to coordinate and improve the delivery system of manpower services.

And secondly, we want to question the recipients of manpower services to learn how to make manpower programs more responsive to the individual needs of the unemployed or the underemployed.

We have invited a number of witnesses from all over the State of Iowa to appear here today to give us the benefit of their views and experiences on manpower.

But before introducing the first witness, I would like to introduce my distinguished colleagues who serve with me on this subcommittee. To my immediate left is your own representative of the State of Iowa, a hard-working, dedicated individual, a man vitally interested in this subject matter who has displayed his interest by attending the numerous hearings that we have held in Washington.