Field Memorandum No. 205-60.

U.S. DEPARTMENT OF LABOR,

MANPOWER ADMINISTRATION, Washington, D.C., November 7, 1969.

To: All Regional Manpower Administrators.

Subject: Revised OEO Income Poverty Guidelines.

The income poverty guidelines used to determine program eligibility for all OEO funded manpower programs have recently been revised. These same income thresholds are used to determine "poor" in the definition of the term “Disadvantaged Individual” (MAO 1–69).

The revised poverty guidelines, by family size and location are:

For families with more than 13 members, add $600 for each additional member in a nonfarm family and $500 for each additional member in a farm family.

These new guidelines are effective immediately.

In the near future, a TESPL will be issued to advise State agencies of the revised poverty guidelines. A forthcoming CAMPS issuance will be used to advise Area and State CAMPS committees of this change. Because of the inherent time lag in processing these issuances, all RMA's should advise State agencies, CAMPS committees, contractors for Title I-B programs including CEP contractors, and State and local NAB representatives of the revised guidelines.

It is anticipated that MAO 1-69 will be revised at an early date to reflect the changes in income poverty guidelines and to incorporate other changes being discussed with OEO. Pending such revisions, the definition of the term "Disadvantaged Individual" will remain unchanged, except for the applicability of the new poverty thresholds.

J. L. BLAKE, Deputy Manpower Administrator for Employment Security.

Question No. 22. Where does the Work Incentive Program for welfare recipients fit into the comprehensive manpower program? Will there be a soparate WIN training program in each local entity? Who determines the emphasis to be placed on training public welfare recipients, Federal, State or local government? Answer. The Work Incentive Program is expected to be replaced by the manpower training provisions (Section 102, revising Part C) of the Family Assistance Act, which is being considered by another Committee of the House.

These provisions of the FAA have been written, however, to be integrated fully into the MTA. Section 434 of the Family Assistance Act requires that manpower programs for FAA recipients be part of an "integrated and comprehensive manpower training program" carried out by all the authority available to the Secretary of Labor "under any other Act" (ie., the MTA). Furthermore, FAA appropriations can be used by the Secretary of Labor "to the same extent and ander the same conditions" as if they were appropriated under the MTA in providing programs for FAA recipients. Thus, FAA funds will be subject to the me State planning process as MTA funds and can be administered by the state comprehensive manpower agency.

The FAA itself requires that all those with certain specific exceptions—who are 16 and over, in a family receiving benefits, must register with the local Employment Service office. They can then be included in the various manpower training programs being provided under the State comprehensive manpower plan, trrespective of where they reside in the State.

Congressional appropriations for Title IV of the Family Assistance Act will establish the minimum level of resources available for training FAP recipients. The FAA provides for equitable distribution of funds among the States. State and local planning organizations will determine, subject to concurrence by the Secretary, what additional manpower resources may be devoted to this client group under the comprehensive manpower plan.

Mr. DANIELS. The committee will stand adjourned and will reconvene at the call of the chair.

(Whereupon, at 12:27 p.m. the select subcommittee recessed, to reconvene subject to call of the chair.)

MANPOWER ACT OF 1969

WEDNESDAY, JANUARY 28, 1970

HOUSE OF REPRESENTATIVES,

SELECT SUBCOMMITTEE ON LABOR

OF THE COMMITTEE ON EDUCATION AND LABOR,

Washington, D.C.

The subcommittee met at 10 a.m., pursuant to call, in room 2261, Rayburn House Office Building, Hon. Dominick V. Daniels (chairinan of the subcommittee) presiding.

Present: Representatives Daniels, O'Hara, Burton, Quie, Steiger, Er'enborn, and Collins.

Staff members present: Daniel H. Krivit, counsel; Marty LaVor, minority legislative coordinator, Charles W. Radcliffe, Minority Counsel for Education; Loretta Bowen, clerk; and Cathy Romano, research assistant.

Mr. DANIELS. The Select Subcommittee on Labor will come to order. Today, we will continue with hearings on various bills that have een introduced, H.R. 10908, H.R. 11620, and H.R. 13472, dealing with hanpower.

Our first witness this morning is Dr. Sar A. Levitan, director of the Center for Manpower Policy Studies, George Washington University. I extend a most cordial welcome to you. I notice you do have a prepared statement. You are at liberty to read your statement, sumarize it and proceed in any fashion that you deem advisable.

STATEMENT OF DR. SAR A. LEVITAN, DIRECTOR, CENTER FOR MANPOWER POLICY STUDIES, GEORGE WASHINGTON UNIVERSITY. WASHINGTON, D.C.

Mr. LEVITAN. Thank you, Mr. Chairman. With your permission I ould like to include the prepared statement in the record and say a *** words for an opener and leave the rest of the time for discussion. Mr. DANIELS. Without objection, your printed statement will gar at this point in the record.

The statement referred to follows:)

ATEMENT OF SAR A. LEVITAN. CENTER FOR MANPOWER POLICY STUDIES, GEORGE WASHINGTON UNIVERSITY

The 91st Congress has the opportunity to improve the manpower programs tiated by its predecessors during the past decade. After eight years of conons expansion, during which we witnessed a tenfold increase in manpower tropriations, the time is long overdue to consolidate the federally-supported gorical and disjointed manpower efforts. This is a very propitious year to freestrate on chores which do not carry any immediate expanded price tag. 44 425-70--pt. 1——7 (91)

The members of the Select Subcommittee on Labor have taken the leadership in proposing measures to improve the effectiveness of manpower programs. It is noteworthy in an election year that these efforts have bipartisan support. This Subcommittee has before it three bills which deserve serious consideration: Congressman Steiger's Comprehensive Manpower Act (H.R. 10908), Congressman O'Hara's Manpower Act (H.R. 11620), and the Administration's Manpower Training Act (H.R. 13472). My comments today will focus on the Administration bill.

ADMINISTRATION AND FUNDING

The Manpower Training Act pulls in states as partners in administering manpower programs without ignoring the responsibilities of elected officials at the local level or the overall role of the federal government. The Secretary of Labor is charged with the responsibility of monitoring federally-funded programs to insure that federal objectives are being carried out, and the Administration would leave the Secretary 20 to 25 percent of the total manpower funds appropriated by Congress for experimental and demonstration as well as for initiation of programs where states and localities do not carry out federal objectives.

I believe that the improvement in the administration of the manpower programs should precede any further expansion of funds. At the federal level this means combining the appropriate manpower programs under consolidated funding, removing categorical eligibility criteria, and discouraging proliferation of local sponsors funded by the federal government. The intent is not to discourage experimentation or innovation, but to assure that all levels of government share responsibility for manpower programs and to encourage elected state and local officals to play an active role in manpower efforts.

Improved administration alone is not enough to carry out effective programs. It only helps to secure a better return on the funds, but it is no substitute for adequate appropriations. It is unfortunate that both the Administration and the O'Hara bills ignore any commitment to expand funds for manpower programs. This gap is filled by the Steiger provision which authorizes increased federal appropriations for manpower programs administered by the Labor Department, rising to $3 billion annually by 1974 or about double the current appropriations. Improving the administration of the manpower programs would also justify, indeed dictate, the expansion of additional funds to meet needs.

SCOPE OF LEGISLATION

My own preference would be to establish a federal Department of Education and Manpower. This department would include the present functions assigned to the Office of Education and the manpower programs of the Social and Rehabilitation Service of the Department of Health, Education, and Welfare, and the programs under the Manpower Administration of the Labor Department.

The scope of the present bills under consideration before the Subcommittee is much narrower. It is unfortunate that the Administration bill does not even include all of the programs that are now under the jurisdiction of the Labor Department's Manpower Administration. The Work Incentive program (WIN) established in 1967 under the Social Security Act is excluded from the Administration bill. It is not clear whether the decision reflects jurisdictional problems among executive agencies or is based on the judgment that a more ambitious scope would create Congressional problems in "processing" the bill. Possibly, the Administration did not want to become a party to a jurisdictional hassle between this committee and the Committee on Ways and Means.

Whatever the ultimate fate of the President's Family Assistance Plan, it is quite clear that during the years ahead there will be an increasing interdependence between public assistance and work oriented manpower programs. The Family Assistance Plan is an overdue recognition that a full-time job is not necessarily a cure for proverty. There will be an increasing need to tie in training programs for relief recipients, along the lines designed by WIN, with those for other persons who experience difficulties in securing and holding a job. An overhaul of the current manpower programs should recognize this fact and include WIN, the program devoted to training relief recipients.

My plea is to extend the jursdiction of this committee to cover training provided under WIN, and to include the program as an integral part of the consolidated manpower programs covered by the bill which this Subcommittee may

approve.

ECONOMIC STABILIZER

Possibly the most significant innovative feature of the three bills is the Administration's proposal providing for a trigger mechanism to increase expenditures for manpower programs when unemployment rises. The Administration bill provides for an automatic increase of 10 percent in manpower funds when unemployment reaches 4.5 percent of the total labor force for three consecutive months.

While this provision attempts to integrate manpower programs with overall economic policy and is admirable in principle, it is adequate only as an opener. As any poker player knows, more than an initial investment is necessary to win the game. The soundest economic principles are not good enough to feed unemployed workers and their families. The Administration's proposal is only a teaser and needs additional commitment before it becomes part of effective economic policy. At the present level of appropriations, an increase of 10 percent in funds allocated to manpower programs means a boost of about $160 million.

The automatic stabilizer proposed by the Administration is supposed to compensate the victims of policies aimed at restraining inflation. The $160 million in additional funds proposed by the Administration is adequate to provide only for a small minority of the prospective victims of the constraining economic policies. According to Labor Department estimates, a rise of unemployment from the current 3.4 percent to 4.5 percent would during the course of one year raise the number of persons unemployed 15 weeks or longer from 2.5 million to 3.9 million, a boost of 1.4 million long-term unemployed. The number of persons unemployed 26 weeks or more during the year would rise from 1 million to 1.8 Lillion. Using again the Labor Department's own estimates, it would take more than $2 billion to absorb all the long-term unemployed under current MDTA or other work experience programs.

The resort to temporary countercyclical expenditures to provide income or jobs to the unemployed is not without its precedents. In the 1958-1959 recession, Congress provided for Temporary Extended Unemployment Compensation at a total cost of more than $600 million. During 1961-1962, the pricetag of the Temporary Extended Unemployment Compensation was nearly $800 million, and an additional $850 million was appropriated to create jobs in depressed areas. It is true that in both cases unemployment rose to 6 percent and even higher, bat our experience during the past decade clearly indicates that the government should step in before unemployment reaches such a high level. And one of the salutary lessons we have learned during the sixties is that the threshold of public tolerance for unemployment has declined. The Administration's proposal to raise manpower funds when unemployment reaches 4.5 percent is therefore sound, but t is not commensurate with the needs of those who become victims of governDental fiscal and monetary policies.

The government must assume responsibility for those who become unemployed as a result of its policies to reduce inflationary pressures. Without raising here any questions about the wisdom of these policies, not a single spokesman for the Administration would argue that the burden of the resulting unemployment ld be placed on those who can least afford it.

My recommendation would be to adopt the Administration's proposal of auatically boosting the funds allocated to manpower programs by 10 percent * unemployment reaches 4.5 percent. But Congress should extend this provision by boosting manpower funds 10 percent for each two-tenths percent increase unemployment. This would mean that the funds allocated to manpower proZans would rise automatically by 60 percent when unemployment reaches 5.5 erent. This provision, together with another Administration proposal calling for an automatic extension of unemployment insurance when the number of evered unemployed reaches 4.5 percent (about equivalent to 5.5 percent of total employment), would provide a measure of automatic aid to the victims of Detary and fiscal policies.

The Manpower Training Act is a sound and imaginative design for the ad21stration of the Labor Department's manpower programs. The passage of this with appropriate changes based on the Steiger and O'Hara bills will go a 12 way toward consolidating and improving the effectiveness of existing manfewer programs that focus on the needs of people who have difficulty in competing the labor market.