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1 Selected resources as of June 30, are as follows: Unpaid undelivered orders, 1964, $5,845,000 1965, $111,467,000; 1966, $111,467,000; 1967, $111,467,000.

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1 Selected resources as of June 30 are as follows: Unpaid undelivered orders, 1964, $1,322,000; 1965, $2,300,000; 1966, $2,300,000; 1967, $2,300,000.

GENERAL STATEMENT

Mr. FOGARTY. The committee will come to order. We will take up the Manpower Administration this morning.

We will place your prepared statements in the record, Mr. Ruttenberg, and will appreciate it if you will summarize them for us. (The statements referred to follow :)

MANPOWER DEVELOPMENT AND TRAINING ACTIVITIES

Mr. Chairman and members of the committee, I am pleased to appear before you today on the 1967 appropriation estimate for manpower development and training activities. The 1967 estimate is for $400,044,000 which is estimated to provide training for 250,000 workers. Of this number, 125,000 are estimated to be in institutional training projects and 125,000 in on-the-job (OJT) training projects with most of the OJT trainees receiving related institutional instruction in addition to on-the-job training.

The MDTA program has now been in operation approximately 31⁄2 years. In this short period the act has been amended two times not only to make changes 59-316-66-pt. 1-15

in the law, found to be necessary as a result of operating experience, but to greatly broaden the scope of the law by creating some new provisions and amending some others to convert what was originally an essentially pioneering program into a continuing measure of active manpower development.

But while the basic MDTA program, itself, perhaps should no longer be considered basically a pioneering program, the nature of the unemployment problem in the United States today-with a stubbornly high rate of unemployment among younger workers, the uneducated, and minority groups, despite a continuous downtrend in the overall rate of unemployment and with manpower shortages in certain skills-leaves us with the inescapable need to reorient and redirect the program in 1967 to reflect the current economic situation. Thus we are proposing in 1967 to place increased emphasis in reaching the hard-core unemployed and on meeting the problem of the emergence of selective skill shortages which accompany declining unemployment. Of the 250,000 trainees whom the 1967 program is estimated to provide, approximately 65 percent of the program (165,000 trainees) will be directed to the hard-core unemployed. These 165,000 trainees include the 60,000 trainees to be devoted to disadvantaged youth. The remaining 35 percent of the training program (85,000 trainees) will be directed to less disadvantaged or regular adults to meet skill shortages in those occupations susceptible to MDTA training.

The portion of the program directed toward the less disadvantaged to meet selective skill shortages will emphasize upgrading the skills of workers. In the OJT portion of the program, increased emphasis will be placed upon combining regular on-the-job training with related institutional instruction.

It is likely that unemployment among those groups in which it is most serious will not be substantially reduced below present levels through the continued steady growth of the Nation's economy alone. Regular fiscal and monetary measures must be augmented by selective measures aimed at the preparation and training of those who have been left out of the general educational and employment opportunity patterns.

From the beginning of the MDTA program, two fundamentally different approaches have been used. The first is job-oriented which identifies occupations in which worker shortages exist, arranges for training programs in such occupations and refers workers most likely to fit employers' needs.

The second is person oriented which starts with the individual, assesses his needs and attempts to fit MDTA or other available programs to his particular potentials. This latter approach has characterized the work done with disadvantaged persons through our experimental and demonstration projects. The major part of our program to date, which has been accomplished through the institutional training route, has been job oriented-assessing and seeking to meet employer needs.

The job-oriented program has had marked success, represented by a relatively high placement rate. This success has been achieved, however, by tending to select trainees from among the best qualified of the unemployed group, with the result that more than half of the trainees are high school graduates and three-fourths of whom have completed junior high school. On the other hand, only 10 percent of our trainees have been in the 45 and older age bracket, yet older workers represent one-fourth of our unemployed. Much the same pattern applies to the teenagers and those with educational deficiencies. It is these groups of the unemployed which we feel should receive increased attention.

Adoption of the person-oriented approach is a virtual necessity if we are to successfully reach these more critical areas of unemployment. This approach requires sophisticated efforts to identify these disadvantaged workers, to assess their interests, aptitudes, and abilities through every means available, and to determine the plan best suited for meeting their particular needs. The characteristics of these unemployed are such that extensive counseling, testing, job orientation, and followup services will be needed. Such a program includes determinations of actual need for and kind of training, such as MDTA institutional training, basic education, on-the-job training combined with institutional training, and referral to the services of other agencies such as local vocational education, welfare centers, State rehabilitation activities, health centers, etc.

The increased emphasis in providing training for the hard-core unemployed will require more intensive outreach and employment security services by the State employment security agencies to locate, counsel, test, and determine the type of training needed. The average unit cost of training in 1967 will also be higher because of increased emphasis in basic education in the training programs as well as more emphasis on related institutional training in conjunction with

OJT projects. Funds for State employment security agencies will be increased by $15,920,000 over 1966 and the overall Federal cost per trainee is estimated to increase from an average of $1,324 in 1966 to $1,388 in 1967. Because of these two factors, the 1967 program is estimated to provide training for 250,000 workers compared to the 275,000 projected for 1966.

Mr. Chairman, this very briefly summarizes the MDTA budget estimate for 1967. I shall be happy to answer any questions you may have.

OFFICE OF THE MANPOWER ADMINISTRATOR, SALARIES AND EXPENSES Mr. Chairman and members of the committee, I am pleased to appear before you today on the Office of the Manpower Administrator, "Salaries and expenses," 1967 appropriation estimate.

The 1967 estimate is for 455 positions and $39,162,000. This is an increase of 63 positions and $3,783,200 over 1966.

The net increase of $3,783,200 over 1966 consists of mandatory increases of $99,500 for financing pay increases and within-grade promotion costs; reductions of $99,600 resulting from nonrecurring equipment costs, management improvements and reduction in travel, printing costs, and working capital fund services; $169,000 to provide for the full-year costs of positions financed for only a portion of the year in 1966; and $3,614,300 for program increases.

By far the largest portion of the program increase, $2,790,000, is requested for Activity 1: Experimental, Demonstration, and Research Programs, to provide for the direct program costs of expanding the comprehensive manpower research program through grants for research projects and doctoral dissertations and for manpower research institutional grants.

The program for research projects and doctoral dissertations provides financial support to manpower research which may lead to new fields of inquiry, to new methods of approach to areas already under study, and to the development of research designs for promising new studies. In addition, grants to public and other nonprofit academic institutions for doctoral candidates to support their research for dissertations will help meet the need for additional high-quality personnel trained in manpower research. The small number of capable researchers in the manpower field places limits on the efforts of both the Government and the academic community to solve manpower problems. A major increase in the volume of grant applications in 1967 is anticipated from the numerous requests for application instructions which have been received from graduate students, academic, and other research personnel associated with more than 100 different universities. For this program we are requesting an additional $1,090,000.

In addition, we are requesting an additional $1,700,000 to expand the program of manpower research institutional grants designed to encourage universities and colleges to develop manpower research programs and research training activities. In 1967, continuing support will be given to those institutions which have effectively developed their capabilities in the first year of the program, and a number of additional smaller colleges will be encouraged to participate in this developmental effort.

Activity 2, "Planning, research and evaluation," provides for the Federal administration of the planning, research, and evaluation activity required to develop and implement a comprehensive manpower program. For this activity we are requesting an increase of 27 positions and $312,500. These additional positions are required to effectively monitor and evaluate the expanded research grant programs which are projected to increase from $3,800,000 in 1966 to a level of $6,590,000 in 1967. In addition in 1967 we are proposing to initiate year-round reappraisal and analysis of manpower programs and to develop plans and policies for the balanced use of manpower program resources. More detailed analytical studies will also be made of the MDTA program to insure that it is reaching the disadvantaged groups upon whom the 1967 program emphasis largely is being placed.

The

For activity 3, "Financial and management services," we are requesting an additional 16 positions and $196,200 to provide increased administrative staff support in the contracting, auditing, financial and management area. 25-percent increase in the on-the-job training program from 100,000 trainees in 1966 to 125,000 in 1967 and the 70 percent increase in the contractual research program will create increased workloads for contracting and auditing staffs. The maintenance of the financial records for each project also will require addi

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