more of the program money for finding the individuals and therefore reduce by 25,000 the number of trainees that would be involved in the

program.

Mr. FOGARTY. The net result is 25,000 fewer people will be trained in 1967 than in 1966.

Mr. RUTTENBERG. Because we estimate that with the kind of people we are going to be dealing with it will be harder to get involved in training programs because, as you very well know, when unemployment is 4 percent, the minority unemployment is almost twice that and youth unemployment is about three times that, or more than three times that, around 13 percent, and then Negro teenage unemployment is 25 percent.

If you go a step further, Negro female teenage unemployment is somewhere in the neighborhood of 33 percent or 34 percent.

Mr. FOGARTY. If you had more money, you could take care of these 25,000, couldn't you?

Mr. RUTTENBERG. Sir, if there were more money, yes. The problem is, it is not a decision for me to make. When one looks at the overall budget and the problems of Vietnam and so forth

UNEMPLOYMENT RATE FOR NON-WHITE TEENAGERS

Mr. FOGARTY. What did you say the unemployment rate of teenage Negro females was?

Mr. RUTTENBERG. It runs in the neighborhood of about 33 percent. Negro teenage, male and female, is about 25 percent. Negro unemployment, nonwhite unemployment, is about 8 percent, total. The teenage part of the minority group is much, much harder to get in terms of the percentages than are the adults though the adults are twice as hard hit as are the whites.

Mr. FOGARTY. Is that mainly because of not going to school?

Mr. RUTTENBERG. You will find a higher concentration of less than eighth-grade education. You will find a higher concentration of lower levels of training; namely, unskilled, and in the past there has been denial of employment opportunities and therefore they didn't really get the training and there was no point in giving them training because they wouldn't be given employment. Now, when employment opportunities are opening for minority groups, their opportunities increase significantly, but it requires substantial amounts of training before they can qualify.

VIEWS OF HEW ON 25,000 REDUCTION IN TRAINEES

Mr. FOGARTY. What do the experts in HEW think about this program, or this cutback?

Mr. KEPPEL. I guess that answer requires an expert, Mr. Chairman, but we have the task of financing the cost of training. The unit cost is more expensive. In other words, if there is a ceiling here with a reduction of 25,000, it certainly makes sense to me as a necessary realistic cost estimate for the program. It is just a tougher job on the HEW side to train them, there is no doubt about it.

Mr. FOGARTY. Isn't it true that this part of the program has steadily expanded since the program started in 1963?

Mr. RUTTENBERG. Oh, yes, sir; the program steadily expanded in terms of numbers of trainees as well as in types of individuals involved in the program.

I think the important consideration to keep in mind is that if we are really going to train those people who need training most and stay within the dollar amounts asked for in the bill

Mr. FOGARTY. For the moment, forget about the dollars. Just talk about the problem.

Mr. RUTTENBERG. I think the problem is there, sir.

Mr. FOGARTY. You are cutting back 25,000. From 1963, every year, this program has expanded until 1967. Now, you are not going to expand at all; you are going to cut back, and if you had the money you could probably get up to 300,000, couldn't you, instead of 250,000? Mr. RUTTENBERG. If the funds were available, Mr. Chairman, there isn't any question but that there is an additional number of individuals that could be trained and could benefit from the program.

Mr. FOGARTY. I thought you made a pretty good case last year that we could make money on a program like this. Get people off relief rolls and train them and find them a job and they would pay taxes. Isn't that a fair statement?

Mr. RUTTENBERG. You have stated the case very accurately and very concisely.

ESTIMATED BENEFIT FROM GOVERNMENT INVESTMENT IN TRAINEES

Mr. FOGARTY. By cutting down 25,000 people, what do you estimate it will cost the Government? You must have some kind of a figure in your head. It may be a guess, but for years the Office of Vocational Rehabilitation has always had figures about how much money you get back for every dollar of Federal funds expended, and rehabilitation is similar to what you are doing.

Mr. RUTTENBERG. We have a little easier job in the sense thatMr. FOGARTY. You have had physically fit people most of the time and theirs are not.

Mr. RUTTENBERG. In terms of education and background only.

I would hesitate from memory to recall a figure. I think for every dollar expended of Federal funds, I think we have estimated somewhere between $4 and $5 would be added to the total general economy through the increased income of the individuals and the less contribution or expenditures by the Federal Government or State and local governments needed for public assistance and other needed aid.

COST-BENEFIT ESTIMATES FOR TRAINING AN ADDITIONAL 50,000 PEOPLE

Mr. FOGARTY. See if you can figure this out in your head: If you didn't cut back 25,000 and, instead, you trained another 25,000-that is a difference of 50,000-what would be the dollar benefit to the Government?

Mr. RUTTENBERG. How much additional money would be

Mr. FOGARTY. What will the total loss be because of this cutback in the budget?

Mr. RUTTENBERG. Roughly $70 million. The average training cost in fiscal 1967 we estimate to be $1,388 times 50,000, which is almost $70 million.

Mr. FOGARTY. You are giving what it would require to train 50,000 more people?

Mr. RUTTENBERG. Right, sir.

Mr. FOGARTY. If we use that estimate of $4 to $5 back for every dollar, what is this program going to cost the Government?

Mr. RUTTENBERG. The net cost to the Government would be $70 million and the recovery of some $300 million over time-not in any one year, but over the lifespan

Mr. FOGARTY. By cutting back 25,000 trainees in 1967 it is going to cost the Government eventually $300 million.

Mr. RUTTENBERG. Over the lifespan of the individual workers who would be trained.

Mr. FOGARTY. It just doesn't make sense to me.

Mr. RUTTENBERG. I think, Mr Chairman, it isn't for me to speak to the full budget of the administration.

Mr. FOGARTY. I am just asking you as the administrator of this program, these questions. We expect you to answers the questions we put to you.

Mr. RUTTENBERG. There isn't any doubt in my mind, sir, or in those of my associates in the Department, that we could train, with the facilities available in the vocational education system, and with the efforts and facilities of the Employment Service in determining the types and need for training and locating individuals and putting them into the programs, that an additional number of trainees could be trained.

JOB PLACEMENT OF TRAINEES

Mr. FOGARTY. What has been your experience in placing these people in jobs after they are trained?

Mr. RUTTENBERG. Our figures, Mr. Chairman, are that about 75 percent of those trained in the institutional part of the program are employed in jobs after they finish, and 94 percent of those who go through the on-the-job training program, where there is an employeremployee relationship, where the individual doesn't receive, necessarily, a training allowance, but receives a wage from the employer, that 94 percent of the people in that program are placed in the jobs.

Mr. FOGARTY. That makes the apprenticeship training program look pretty good then, doesn't it?

Mr. RUTTENBERG. The program is

Mr. FOGARTY. That is an on-the-job training program.

Mr. RUTTENBERG. Yes. It is expanding very rapidly and when anybody goes into an apprenticeship program, they tend to be employed. Mr. FOGARTY. This proves to me that this is the best way of training; on the job. Not through trade schools. You can't learn a trade in a school.

Mr. RUTTENBERG. In the on-the-job training program as well as the apprenticeship program, the supplemental and related instruction they receive is provided through the vocational system and through the trade schools.

Mr. FOGARTY. Yes, but the apprenticeship training program has been around here for a long, long while and I think one of the reasons it has stood up is because of the figures that you just gave us.

Mr. RUTTENBERG. And the combination of being on the job and learning on the job and having that supplemented by the

Mr. FOGARTY. This is something I have said for 20 years and longer about the apprenticeship training program.

Mr. RUTTENBERG. You are perfectly right.

INCREASE FOR EMPLOYMENT SERVICES

Mr. FOGARTY. The part of the program that has the only large increase in funds is for the employment security services, where you have an increase from $22,602,000 to $38,522,000, or about $16 million.

Why is this so much more important than funds for institutional training?

Mr. RUTTENBERG. I think in my prepared statement, as well as in my oral summary of it, I dealt with the answer to that question, but briefly let me recap it quickly.

As unemployment approaches 4 percent and goes lower, as it undoubtedly will in the coming calendar year, or the present calendar year, the individuals, the nonwhites, the teenagers, the older workers, those with less than eighth grade education, those with low levels of skill, will be harder to train and harder to find, harder to locate, harder to keep in training and the increased funds for the employment security program is to help find those people, help stimulate, motivate them, help bring them into the program.

UNEMPLOYMENT AND TRAINING AT AGE OF 45 AND OVER

Mr. FOGARTY. How successful are you in placing an older worker in a job? We have been hearing for the last 10 or 15 years that at the age of 45 and over it is most difficult to get a job.

Mr. RUTTENBERG. Unfortunately, Mr. Chairman, this is one of the problems we would hope, with these funds, plus additional funds in the grant program for the Bureau of Employment Security, which is a good one and which Mr. Goodwin will talk to later, we hope, really, to do something about.

For example, only 11 percent of our trainees, are 45 years of age or older. Yet 25 percent of the unemployed are 45 years of age and older and we have not been doing as good a job as we ought to do in bringing them into the training program.

Mr. FOGARTY. I think the only agency in Government that has done anything in this area has been the employment service. They have from time to time been able to show some progress, not as much as we would like to see.

Mr. RUTTENBERG. Unquestionably true.

Mr. FOGARTY. How are you going to get these people? Are you going to advertise on the radio and TV or through the newspapers, or are you going to go from door to door?

Mr. RUTTENBERG. I think the way they will be gotten is by sending people out from the employment service. Mr. Goodwin could talk better to this problem than I, but to go out to the street corners, into the disadvantaged, poverty-stricken areas, into the slum areas, find the individuals, talk with them, go house to house, go to where they congregate on street corners or in halls and find them and stimulate them and bring them in-and this is what the employment service has been doing under the youth opportunity centers for youth and

really the increased funds for the employment security program in this budget are for doing this same kind of so-called out-reach that is being done for youth and for adults.

NEW TRAINEE REFERRALS FROM OUTREACH PROGRAM

Mr. FOGARTY. If the employment security services do a good job with the extra money, isn't it likely they will find many more people who should be referred for training?

Mr. RUTTENBERG. I think, Mr. Chairman, that might be a fair conclusion.

Mr. FOGARTY. When I was talking about 300,000 instead of 250,000, that 300,000 may be way off, too. It may be nearer 400,000.

Mr. RUTTENBERG. Our estimate, as we said when we presented the budget for $513 million to the Bureau of the Budget, was for 325,000. Mr. FOGARTY. It could go higher than that if the employment services do a good job with this extra money.

Mr. RUTTENBERG. Conceivably. You see, it is not only a more difficult problem for the employment services, but the vocational education system is also going to have its problems. Because anybody that is hard to reach, as these people are going to be, is also going to be hard to teach. Therefore the vocational education system is going to have to adjust itself and find the right kind of teachers and the right kind of surroundings.

BUDGET ESTIMATE FOR ON-THE-JOB TRAINING SERVICES

Mr. FOGARTY. You are asking for an increase in on-the-job training services from $2,462,000 to $4 million. This will provide for an increase from 100,000 trainees in 1966 to 125,000 in 1967. What could be effectively used for this part of the program if you really made an all-out effort?

Mr. RUTTENBERG. Mr. Chairman, I think we ought to differentiate between the 100,000 OJT trainees which we estimate for 1966 and the 125,000 we estimate for 1967, and the dollar figures which you use. The dollar figure, going, roughly, up to about $4 million, from $2.5 million, is for reimbursements to State apprenticeship agencies with whom Mr. Murphy has contracts through BAT, with State agencies to promote OJT programs and also to develop national-type contracts for promotion like, for example, the national contract we have for apprenticesto endow apprentices to the National Tool, Die & Instrument Association. Those funds are to be used only for promotional efforts with State agencies, State apprenticeship agencies, and with national contracts. The dollar amount of money in the budget for the cost of onthe-job training is, of course, much higher. The $4 million does not represent the training cost for the 125,000 trainees. It is related to the development and promotion through State agencies and national contracts.

GREATEST NUMBER OF ON-THE-JOB TRAINEES FEASIBLE

Mr. FOGARTY. How many more on-the-job trainees could you take care of if you had the money?