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Secretary WIRTZ. That is correct.

Mr. DENTON. I had two or three calls yesterday about what a fine program it was.

About the poverty program, as I have observed it, it depends a good deal on the local government. If they run it well it is all right, but otherwise you have some difficulty. But everybody I have talked to about the Neighborhood Youth Corps and the Manpower Training Act think they are fine programs.


About unemployment, somebody told me the rate in northern Indiana was down to 1.5 percent. Is that right?

Secretary WIRTZ. That is about the rate for the Fort Wayne area, but in December the entire area was between 2 and 2.5 percent.


Mr. DENTON. What kind of changes are you making in your new building?

Secretary WIRTZ. When the plan was first submitted to us it was a building a good block square and it had windows only around the outside circumference and there was no well or anything on the inside, and I, frankly, said I did not want that kind of building. So the changes made at my insistence require some wells in the building and some inner wells so that almost everybody will have a window within sight.


Mr. MICHEL. Mr. Secretary, you say that unemployment now is 4.1 percent. Of course, this figure is due in some measure, is it not, to the increased draft calls and the Job Corps and the Youth Corps and the Peace Corps and VISTA people, all employees in one form or another of the Federal Government?

If we did not have those programs together with an increased war effort, would you not anticipate that unemployment picture would be a bit different?

Secretary WIRTZ. Some of those programs have contributed to the reduction in the unemployment figure.


Mr. DENTON. Who is considered to be unemployed?

Secretary WIRTZ. A person who has been looking for work, actively looking for work and is unable to find it. It does not include those who are not looking for work.

Mr. DENTON. When was the last time we changed the criteria for making this determination?

Secretary WIRTZ. There has been no change. There is a study presently underway. The preliminary suggestions are there could be some slight modifications in that, but there has been no change and I will complete the record-in something like 10 or 12 years.


Mr. DENTON. On the civil rights matter, you say there were 130 complaints of discrimination made to the Department in the last 6 months of 1965?

Secretary WIRTZ. Correct.

Mr. DENTON. I assume then on the basis of that you prognosticate for the coming fiscal year and you arrive at this figure of 600. Is that not an exceptionally high figure on the basis of only 130 for 6 months in 1965?

Are you not lending encouragement to the filing of complaints by suggesting there are going to be so many more than the experience table shows?

Secretary WIRTZ. I hope the number will be lower than that. I do not believe there is any lending of encouragement on it. I think as people become aware of the law, we are bound to have a larger number of them. It has gone up significantly. I think it has gone up despite the fact there is probably less actual discrimination than there was. They are realizing there is a form of relief they had not realized was there.

I hope the number is not too high. I am afraid it will be. You see, some of this may be cases of discrimination by a few State employment security agencies. An instance would be one in which a State employment service acted in a discriminatory fashion as far as some job applicant was concerned. There are still some States where we have to recognize that will still be a real problem.


Mr. DENTON. I see on the next page of your testimony:

State employment security agencies will continue to place emphasis on serving youth and older workers in 1967.

Of course, with all these other programs, as I have mentioned before-Job Corps, Youth Corps, Peace Corps, and so forth, is there still as severe a problem in that area as before the programs came into being?

Secretary WIRTZ. That was the one area in which there was no improvement-no significant improvement in 1965. That is because we are still absorbing for the next 2 or 3 years this postwar baby crop into the work force. Last year was the year it started to hit heavy. It will hit heavily for this year and the next 2 or 3 years.

Last year, between December 1964 and December 1965, the increase in the number of jobs was 2.4 million. One million of those went to teenagers, and that still was just enough to hold teenage employment at the same level because the increase in teenagers in the work force was 1 million. We face that same problem this year.


Mr. DENTON. I received a letter in this morning's mail from the president of the American Federation of State, County, and Municipal Employees, AFL-CIO. They are concerned over the fact that State grants under the Bureau of Employment Security, which is 100 percent federally financed, has no increase and they are wondering

whether or not in a growing and expanding economy they will be able to fulfill their responsibility to the fullest extent.

Secretary WIRTZ. We are asking for an increase and we are hoping very much there will be a further legislative increase in the base on which the unemployment insurance tax is computed which would make possible a later further expansion of that program.

Mr. LAIRD. You mean an increase in the wage base?

Secretary WIRTZ. That is correct.

Mr. LAIRD. It is $3,000 now. That is a very unrealistic base.


Mr. LAIRD. Will you yield to me on this point having to do with transfers from the unemployment trust fund? I was interested in your statement on page 7, Mr. Secretary, where you say, "A rationale for the proposal is an attachment No. 8."

Secretary WIRTZ. Right.

Mr. LAIRD. I am sure this is called properly a rationale. It is certainly not a legal opinion as to the use of trust funds because legally I think this is a violation of the trust fund law.

I cannot believe the Department of Labor recommended this. This must be some gimmick from the Bureau of the Budget.

Secretary WIRTZ. Quite to the contrary, Mr. Laird.

Mr. LAIRD. Did you recommend this, or did the Bureau of the Budget recommend it?

Secretary WIRTZ. Which particular part of it?

Mr. LAIRD. Using the trust funds, first to pay the costs incurred in connection with carrying out the Department's responsibility under Public Law 414 relating to both permanent and temporary admissions, $2,950,400.

Second, costs incurred in effectuating the Department's responsibility under the Civil Rights Act, $212,000.

Third, the cost incurred in connection with the administration of the Farm Labor Contractors' Registration Act, $230,000.

I cannot believe, Mr. Secretary, that the Department of Labor wanted to use this unemployment trust fund for these purposes. It seems to me nothing more or less than a gimmick. It has been used in order to take costs that should be properly charged to the general fund of the Treasury and should not be charged to the unemployment trust fund.

I am for the activities, but I think it should not be charged to the unemployment compensation trust fund.

Secretary WIRTZ. There are two questions.

Your first question is: What did we ask for? It is completely correct, our original request was that this be financed out of the general funds.

Mr. LAIRD. You did not request this be financed out of trust funds? Secretary WIRTZ. The second question is, as a matter of legal propriety and interpretation of the statute, we would think it correct, and the answer is, we would think it correct and we would consider these matters very closely related to the function of the employment service.

Mr. LAIRD. I would like to have your counsel put a statement in the record, if it is all right with the chairman, showing the legal basis on

which you can use the unemployment trust fund for the financing of these expenses. I thought your statement on page 7 very properly used the term "rationale" rather than the "legal basis," because I did not think you could develop a legal basis for doing this.

Mr. FOGARTY. I do not see any reason why that should not be supplied.

(The information requested follows:)

To: The Secretary.

From: Charles Donahue, Solicitor.


OFFICE OF THE SOLICITOR, Washington, February 8, 1966.

Subject: Whether certain expenditures of the Department of Labor may properly be financed from the administration account of the unemployment trust fund.

The Department of Labor's budget for fiscal year 1967, as approved by the Bureau of the Budget, includes the following expenses as proper items of cost chargeable to the Employment Service Administration account of the unemployment trust fund.

1. Costs incurred in connection with carrying out the Department's responsibilities under the Immigration and Nationality Act (Public Law 414, 82d Cong.) relaing to both permanent and temporary admissions.

2. Costs incurred in effectuating the Department's responsibilities under the Civil Rights Act.

3. Costs incurred in connection with the administration of the Farm Labor Contractor Registration Act of 1963.

My opinion has been requested as to whether these costs are properly within the scope of the expenditures that may be financed from the administration account of the unemployment trust fund. For the reasons set forth below I am of the opinion that they are.

The Employment Service administration account of the unemployment trust fund is established by title IX of the Social Security Act which provides in section 901 (c) (1), as follows:

"(c) (1) There are hereby authorized to be made available for expenditure out of the employment security administration account for the fiscal year ending June 30, 1964, and for each fiscal year thereafter

"(A) such amounts (not in excess of the limit provided by paragraph (3)) as the Congress may deem appropriate for the purpose of—

"(i) assisting the States in the administration of their unemployment compensation laws as provided in title III (including administration pursuant to agreements under any Federal unemployment compensation law, except the Temporary Unemployment Compensation Act of 1958, as amended),

(ii) the establishment and maintenance of systems of public employment offices in accordance with the Act of June 6, 1933, as amended (29 U.S.C. sec. 49-49n), and

"(iii) carrying into effect section 2012 of title 38 of the United States Code:

"(B) such amounts as the Congress may deem appropriate for the necessary expenses of the Department of Labor for the performance of its functions under—

"(i) this title and titles III and XII of this Act,

"(ii) the Federal Unemployment Tax Act,


"(iii) the provisions of the Act of June 6, 1933, as amended,

"(iv) subchapter II of chapter 41 (except section 2012) of title 38 of the United States Code, and

"(v) any Federal unemployment compensation law, except the Temporary Unemployment Compensation Act of 1958, as amended." [Emphasis added.]

The decisive test, therefore, regarding the legal propriety of drawing upon that fund for the expenditures in question is whether it is a reasonable part of the cost of the administration, both Federal or State, of the unemployment insurance program provided by title III of the Social Security Act or the establishment and maintenance of systems of public employment offices as prescribed by the act of June 6, 1933 (the Wagner-Peyser Act).

I. Costs incurred in connection with carrying out the Department's responsibilities under the Immigration and Nationality Act..

The function performed by the Employment Service system under the Immigration and Nationality Act is pinpointed by section 212(a)(14) of that act with respect to immigrants and sections 214 (c) and 101 (a) (15) (H) (ii) with respect to nonimmigrants. Section 212 in describing the category of aliens excludable from the United States includes in subsection (a) (14) :

"Aliens seeking to enter the United States, for the purpose of performing skilled or unskilled labor, unless the Secretary of Labor has determined and certified to the Secretary of State and to the Attorney General that (A) there are not sufficient workers in the United States who are able, willing, qualified, and available at the time of application for a visa and admission to the United States and at the place to which the alien is destined to perform such skilled or unskilled labor, and (B) the employment of such aliens will not adversely affect the wages and working conditions of the workers in the United States similarly employed [Emphasis added.]

Substantially the same standard is prescribed for the admission of nonimmigrants by virtue of the Immigration Service regulations which require such a certification pursuant to section 214 (c) and 101(a) (15) (H)(ii) of the Immigration and Nationality Act.1

Although this certification is a requirement imposed under the Immigration and Nationality Act, the process by which it is made and the expenses incurred in performing the function necessary to make the certification are indistinguishable from the regular function and expenses of the Employment Service as prescribed by the Wagner-Peyser Act. The fundamental role of the FederalState employment service system as set forth in the Wagner-Peyser Act which created it, is "to promote and develop a national system of employment offices for men, women, and juniors who are legally qualified to engage in gainful occupations***."

The public employment offices, therefore, undertake to find workers for employers and employment for workers through the medium of a job order, or job application filed with the public employment offices. The ultimate way in which the determination that workers are not available may be stated makes this service performed by the Employment Service in seeking to obtain workers no less the legitimate function of the Employment Service. The certification of the fact that workers are not available, which may become the decisive factor in the admission of an alien, is no more than a formal declaration of a fact conveyed to interested parties in a less formal manner for the past 33 years of operation of the Employment Service. The certification called for by section 212 (a) (14), and by the Immigration and Naturalization Service regulations, is accordingly no more than a convenient and useful application of the product of the normal function of the Employment Service to the administration of the Immigration and Nationality Act.

The Wagner-Peyser Act, moreover, in section 3 (a) prescribes as a function of the Employment Service system: "furnishing and publishing information as to opportunities for employment and other information of value in the operation of the system ***." The certification called for by section 212(a) (14) relating to availability of American workers and its corollary for nonimmigrants made pursuant to the Immigration Service regulations appears to be well within the scope of this mandate to furnish information with respect to "opportunities for employment."

That the Congress was well aware of this function of the Employment Service and that it was a legitimate and longstanding responsibility of the Employment Service offices is demonstrated by the following language in both the

1 Sec. 214 (c): "The question of importing any alien as a nonimmigrant under sec. 101 (a) (15) (H) in any specific case or specific cases shall be determined by the Attorney General, after consultation with appropriate agencies of the Government, upon petition of the importing employer."

Sec. 101 (a) (15) (H) (ii): Sec. 101 defines as a category of nonimmigrant alien one "who is coming temporarily to the United States to perform other temporary services or labor, if unemployed persons capable of performing such services or labor cannot be found in this country."

Sec. 214.2 (h) (ii), title 8 CFR :

"(ii) Petition for alien to perform other temporary service or other temporary service or labor. A U.S. Employment Service clearance order concerning the nonavailability of qualified persons in the United States and stating that its policies have been observed shall be attached to every submitted nonimmigrant visa petition to accord an alien a classification under section 101 (a) (15) (H) (11) of the act, unless the petitioner has been informed by the Service that a clearance order for the beneficiary's occupation is not required * * *."

59-316-66-pt. 1--12

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