Secretary WIRTZ. All wage earners are consumers. All consumers may not be wage earners. The dividing line would be roughly this: The wage earners of the country with their families constitute between 170 million and 175 million out of the 200 million, so the dividing line would be about that difference.

RATE OF UNEMPLOYMENT

Mr. FOGARTY. What is the rate of unemployment?
Secretary WIRTZ. In December it was 4.1 percent.

Mr. FOGARTY. About 2 or 3 years ago you came before the committee and told us at that time you were trying to approach-I think that is the word you used, approach-the 5-percent area, and you have done much better than that.

Secretary WIRTZ. I will accept your history rather than mine except this, Mr. Chairman, I do not believe I ever took 5 percent as worth talking about and, as a matter of fact, I object to 4 percent.

Mr. FOGARTY. You were not confident of anything this good at that time.

Secretary WIRTZ. I would let the matter pass except I have always objected to even 4 percent.

Mr. FOGARTY. But you have done much better than you expected 2 or 3 years ago?

Secretary WIRTZ. No; really not.

Mr. FOGARTY. Tell us about it. I was trying to give you some credit but you do not want to take it.

Secretary WIRTZ. I do not because there has always been a question as to whether the 4 or 5 percent represented a proper goal. I personally thought it was a mistake.

Mr. FOGARTY. What do you think it will be a year from now? Secretary WIRTZ. In a year or two I think we will approachusing the same language-3.5 percent by the middle of 1966.

MINIMUM UNEMPLOYMENT

Mr. FOGARTY. What do you call 3.5 percent? Is that a minimum? Secretary WIRTZ. We know more about it than we did 2 years ago. I remember the conversation to which you refer. It is pretty clear to me that with the amount of turnover in this country so that every day there are 10,000 more people going to work than left the day before, and with a lot of them changing jobs, you will have what the economists call frictional employment in the amount of about 2 million or about 2.5 percent any given day. Most of that is very short-term unemployment.

Then about one-half million of the work force, for one reason or another, just will not make it. So I would think we can get it down eventually to around 2.5 to 3 percent within the next few years; 100 million is the projection for 1980. I think we can get to 3 percent before then.

Mr. FOGARTY. About 3 percent will be the minimum?

Secretary WIRTZ. For the nationwide average 3 percent is about as low as we can get it.

For adult men it was down to 2.6 percent in December 1965.

Mr. FOGARTY. If you get down to 3 percent you think that is the minimum?

Secretary WIRTZ. If the general national average is 3 percent we will be all right.

Mr. FOGARTY. And you have 4.1 percent now?
Secretary WIRTZ. Correct.

COMPOSITION OF THE UNEMPLOYED

Mr. FOGARTY. What about this 1 percent? Who are they? Secretary WIRTZ. We have a pretty good picture of them. About 900,000 of the 2.9 million persons unemployed in December were under 21 years of age.

Mr. FOGARTY. Under 21. Would this be 15 through 20?

Secretary WIRTZ. The figures start at 14 years of age. I think that is a mistake. We ought to look at it in terms of 16 to 20, that age group. But now they are 14 to 20. There are not many unemployed in the 14 and 15 age group. There is a strong concentration in the 16 to 19 age group, about 600,000 about half of those are just looking for part-time work.

Mr. FOGARTY. You mean they are going to school?

Secretary WIRTZ. Most of them are going to school and looking for work in the evenings and on Saturday.

NEIGHBORHOOD YOUTH CORPS

Mr. FOGARTY. How much will the Neighborhood Youth Corps program in the Department of Labor help this particular area? That is what are they hitting at, the 16 to 19 age group.

Secretary WIRTZ. The Neighborhood Youth Corps, between January 3, 1965, and January 3, 1966, provided job opportunities for onehalf million of these kids. This is not on a fiscal year basis, but on a calendar year basis that one-half million youths were covered in the program. I think it is a suberbly, fantastically successful program. As of December 31, 1965, there were about 156,000 enrollees in that program.

Mr. FOGARTY. The reason I asked this question is because our newspaper in Rhode Island has been making an investigation of the Neighborhood Youth Corps program, and I think they had some justification. In some of these towns I do not think the criteria were established in time to enable the leaders to determine whether all the persons between the age of 16 and 19 who were enrolled really were eligible, but in some towns it was pretty plain they turned down some applicants who were eligible in favor of those who came from families of high wages. The paper did a pretty complete job.

When they started I asked Mr. Howard to come and spend the day and answer all questions, which he did, with his man from Boston. I thought he did a real good job in explaining the problem. Wherever these situations were found he cut the funds right off, and I think he should.

Secretary WIRTZ. I do, too.

Mr. FOGARTY. If we are to have a program of this kind it should be run right. I think even after the investigation of this newspaperwhich is the largest in the State and they have plenty of people to put

into it-I think Mr. Howard came out on top and I think the program will be good in the future. I think we have to admit we made some mistakes. As I read the record, Mr. Howard and the Department of Labor put a lot of responsibility on the heads or leaders of the State government and they turned out not to be right in some of the things they did, and I am talking about my own State now.

Overall, I think this is one of the best programs we have ever started, but in my State the newspaper turned up some real bad individual programs.

Mr. FLOOD. In my district we did not have one complaint.

Mr. FOGARTY. We had several. I asked Mr. Howard to come and spend the day and answer all questions and he did, and did a good job. Because the newspaper did publicize some of these problems, I think the program will be better from here on.

Secretary WIRTZ. I agree completely, both with respect to Mr. Howard's part and his experience. We made some mistakes to begin with.

Mr. FOGARTY. The criteria were not spelled out well when we started in January a year ago.

Secretary WIRTZ. January 3.

We presently have a problem that bears on this. We are cutting down the eligibility level even lower and are having serious trouble in some districts. We cut down the general welfare standards.

Mr. FLOOD. You did that right in the beginning of the ball game. Secretary WIRTZ. That causes some problems, there is no question about it.

Mr. FOGARTY. I can see why some people in my district made some mistakes in judgment, but I think they were doing the best they knew how. In two or three towns they were not doing right. They turned down applicants that should have been OK'd and took kids 16 or 18 years old that should never have been taken into the program.

Mr. FLOOD. I would like to note in my district, which is a complicated district in the coalfields, there was an extremely active program and there has not been one complaint about one person. It is hard to believe.

Mr. FOGARTY. This is one of the best parts of the poverty program and I am glad it is in the Labor Department, Mr. Secretary. Secretary WIRTZ. Thank you.

Mr. FOGARTY. And I think Mr. Howard is doing a good job.
Secretary WIRTZ. Yes, we think very highly of him.

PRESIDENT'S COMMITTEE ON CONSUMER INTERESTS

Mr. FOGARTY. You were talking about the President's Committee on Consumer Interests. Do you have any problem due to the fact that HEW already has so many activities in this area in connection with their programs like Food and Drug, Administration on Aging, and certain public health and welfare programs? Maybe they should be in HEW rather than the Department of Labor.

Secretary WIRTZ. My impression is, Mr. Chairman, that you do run into something of a problem because we are really trying to do two things. We are trying to put it in a department of Government and we try to remember there are people on that Committee other than labor people.

ANTIPOVERTY PROGRAM COORDINATION

Mr. FOGARTY. If this is putting you in an unfair position you don't have to answer it, but isn't there some question about the division of antipoverty programs between you and HEW?

Secretary WIRTZ. I would say the working relations between the two are excellent. I mean that, and I mean it, too, when I say there are sometimes overlaps we ought to look at. I think it is a very real question whether one agency should operate the Neighborhood Youth Corps and another the work experience program. One is in Labor and one in HEW. I doubt they should be in separate agencies.

Mr. FOGARTY. Why should not the entire poverty program be under the Department of Labor?

Secretary WIRTZ. I would like to answer that.

I think we are probably 3 to 4 to 5 years ahead of where we otherwise would have been because we started identifying things as "poverty" we had tried to get under other names. We tried to get the Youth Opportunity Act passed and could not. That would have been under the Department of Labor. By coming out with the more appealing word of "poverty" we did a great deal more than we could have done otherwise. So I think the identification of a separate poverty program is a good thing.

Mr. FOGARTY. I do not completely agree with you.

TASK FORCE REPORT ON EMPLOYMENT SERVICE

Will you tell us about the task force report on the Employment Service-what they recommended, what you think of their recommendations, and what you plan to do about them?

Secretary WIRTZ. First, the nature of the task force is important. It was a tripartite group that included topnotch labor and management people, and they came up with fine recommendations that in my judgment make good sense. I disagree with them on two or three points, but not basically. I think their recommendations represent a very real going ahead of this program.

You ask what we will do about it. About half of the recommendations, roughly, can be implemented administratively. The other half will require legislation. We have drafted legislation which will implement almost all of these recommendations.

Mr. FOGARTY. Will you put that in the record?

Secretary WIRTZ. The statement?

Mr. FOGARTY. The recommendations for legislation.

Secretary WIRTZ. Surely. The legislation I could not because it is still in the process of circularization.

Mr. FOGARTY. By the time this is printed you may have it. If not we will place just the recommendations in the record.

Secretary WIRTZ. I will be glad to if the circumstances then permit. (The recommendations of the task force follows:)

SUMMARY OF RECOMMENDATIONS

I. The need for a new legislative mandate to clarify the role and mission of the Employment Service within the framework of the Federal-State system and with the recognition of the existence of other labor market intermediaries, both public and private.

II. A separate, identifiable Employment Service:

A. Administrative separation from Unemployment Compensation.

1. A separate State employment service director with own staff and line of authority who reports to an administrative head of an overall agency.

B. Physical separation of Employment Service facilities:

1. Physical separation of all Employment Service offices from Unemployment Compensation with reasonable proximity maintained so as to minimize the inconvenience to Unemployment Compensation claimants and jobseekers.

III. Source of service and relations with other groups:

A. No arbitrary limits on clientele served. Employment Service must be able to serve all classes of clientele.

B. Special efforts should be extended by the Employment Service to reach out to persons in need of specialized manpower services to improve their employability.

C. Employment Service should explore all possible ways to develop a more effective two-way flow of information and contacts with private employment agencies which adhere to professional standards in their placement activities.

D. Employment Service should seek to serve in coordinating role in an effort to implement various Government training programs.

E. Employment Service should be given legislative authority to enter into contractual relations with non-Government groups to supply specialized manpower services to certain clientele.

IV. Strengthening personnel in the Federal-State system :

A. Salary administration and personnel qualifications:

1. Higher salaries should be commensurate with the qualifications and standards for these positions as prescribed by the Secretary of Labor. Federal funds would be made available to those States which meet the higher qualifications-higher salaries requirement.

2. The policy on salary comparability for professional jobs should be modified to include the salaries being paid for comparable jobs in the State, both public and private. The Wagner-Peyser Act should be amended to this statutory, especially in view of pending legislation (S. 561).

3. To facilitate the recruitment of college graduates and other qualified employees, the Federal Civil Service Commission should set up a classification entitled "Employment Service Trainee." Trainee would be a Federal employee. The Secretary of Labor would work out a cooperative relationship with the States to assign trainee to State and local operations for a period of 2 years. Afterward, trainee would be reassigned to the National or regional office or could transfer to the State.

B. Training and development of personnel:

1. Secretary of Labor should require each State's annual plan of operations to include a well-developed training program including provisions for orientation, inservice, and outservice training, tuition refund, and educational leave.

2. Training activities should be adequately financed.

3. Secretary of Labor should be authorized to make supporting grants to colleges and universities for development of appropriate curriculums and training materials and for the establishment of regional training centers for Employment Service personnel.

4. Budget for Employment Service operations should contain a line item with respect to training activities.

C. Facilitating mobility within the Federal-State system:

1. Legislation should be enacted to enable an employee in a State agency to be appointed to a Federal position if he has permanent status in the State agency under specified conditions.

2. Secretary of Labor should be given legislative authority to develop a system permitting transfers or temporary leaves of absence for personnel to move among State agencies without loss in employment status, etc.