I would like now to report to you on the implementation of our youth services program. During fiscal year 1965, the first of our youth opportunity centers (YOC) was opened. These you will recall are specialized offices devoted entirely to serving the needs of youth, such as referral to preemployment and employment training, intensive counseling before, during, and after such training, and assistance in securing employment. We are also fulfilling our responsibilities under the Jobs Corps and NYC program through the YOC's and local office youth service units. Our proposals for fiscal year 1966 as authorized by the Congress were to establish YOC's in 139 areas throughout the United States and to augment our youth service staff in local offices not located in the YOC areas. The following reflects our progress and accomplishments to date in carrying out these plans. At the beginning of this fiscal year, YOC's in 39 of the 139 areas were in operation. Since July, centers in an additional 52 areas have been established, which brings the total to 91 areas. Centers in 32 more areas will be opened in the very near future. We anticipate that the remainder of the 139 areas will have centers in operation within the next 2 months. We are also working out plans with the State agencies for augmenting their youth service staffs outside of YOC areas. An impressive record of accomplishment is also being established. I believe the following figures are significant, especially in view of the newness of the operations and the fact that they cover a period during which the centers were being opened. For the period from February through October 1965, 308.800 youth were served through YOC's. Youth receiving one or more counseling interviews numbered 88,300; aptitude and proficiency tests were administered to 97,500 and 72,700 were placed in jobs. In October alone, more than 11,300 applicants, including 300 handicapped, were placed in jobs; 4,700 were referred to the Job Corps and 1,900 to MDTA training projects. Another 1,500 were referred to medical and welfare agencies, schools, and apprenticeship programs. These figures, impressive as they are, will increase as additional centers are opened. Many approaches are being followed in our efforts to assist the youth most needing help. We are emphasizing various methods of outreach in heavily populated areas such as outstationing staff in neighborhod centers and utilizing community workers for individual contact. These individuals, by and large, come from the very areas in which they work. We are also using staff of specialists constituted as mobile teams to reach youth residing in nonurban and rural areas. This is an approach to provide services outside the YOC areas. The selective service rehabilitant program is also being continued with staff stationed at the Armed Forces examining stations. Our request for $20.7 million in fiscal year 1967 for youth services is to finance on an annual basis the level authorized by Congress in 1966. No further expansion is proposed this year; rather we will concentrate our efforts to achieve maximum effectiveness of operations at the staff level to be attained this year. In addition to an expansion of youth services during this fiscal year, improvements were provided for in three other areas; namely, services to minority groups, to older workers, and basic or direct employment service activities. By direct activities. I mean those that are fundamental in local office operations in meeting employers' and workers' needs, including management and supervision. With the greatest needs existing in our largest metropolitan areas, the bulk of our added resources were planned to be used in such areas. We are concentrating our attention and our resources toward alleviating the problems with which individuals are confronted in their efforts to meet their employment needs. This means we are gearing our operations to assist the most impoverished, and the most extremely disadvantaged. It takes the form of reaching out to these individuals, to determine the kinds of assistance they need and to undertake actions required to help them meet these needs. It takes the form of greatly intensified counseling, of seeking out the kinds of job opportunities in which they can perform, in instituting required training programs by which they can prepare themselves for employment and in seeking sources for remedial services required by them. This requires extensive effort and it will greatly tax our resources. However, the benefits to be gained for the individuals and by better use of our human resources makes the effort mandatory. The Department of Labor is undertaking a "Human resources development program" which is an intensive program to seek out and assist those in greatest need of employment and related help. It is a local action program designed to mobilize the entire resources of a community to seek out and assist individuals and families most in need of such help so that they can become active contributors in our society. The Employment Service is assisting in this program. program is operational in Chicago and is being extended to an additional four areas. This I would now like to discuss our requested increases for fiscal year 1967, beginning with the Unemployment Insurance Service. UNEMPLOYMENT INSURANCE INCREASES For the most part, the changes in the estimates for the Unemployment Insurance Service are either mandatory in nature, or a part of the effort, which I will discuss later, to economize through reduction of low priority activities and improvement of efficiency. Included in the mandatory increases is an item of $3,675,000 which is necessary because of changes in State unemployment insurance laws adopted during the 1965 legislative sessions. Of this amount, approximately $3.2 million is necessary to finance extensions of coverage of the program in two States; in one instance to employees of smaller employers, and in the other to domestic workers in private households. These two enactments will add 85,000 employers to the tax rolls and result in coverage of 170,000 additional workers. Normal growth in the program necessitates a mandatory increase of $1,234,000. In fiscal year 1967 this growth will result in an additional 40,000 subject employers and 900,000 new covered employees over and above the increases resulting from changes in State law. Offsetting the mandatory increases is a reduction of $3,900,000 based on the lower claims workload due to assumed improvement in economic conditions. Our There is a small amount requested as a program increase for a part of anticipated one-time costs of installing or updating electronic data processing systems. As stated in the budget, there will be some 15 States installing new equipment during fiscal year 1967. However, approximately 21 others will be actively engaged in planning or preparing for computer installations. experience generally has been that, particularly in the large volume operations of the unemployment insurance program, electronic data processing has produced substantial cost savings. In fact, our request that the State agencies consider ways of reducing costs has prompted a considerable number of them to accelerate their planning for improved data processing systems. Nonetheless, the preparatory work before a computer can be successfully used and the early stages of its operation result in considerable one-time costs. While we hope to be able to cover about 75 percent of these costs through savings and consequent budgetary adjustments, we feel it is highly important that the estimated amount of $400,000 be made available as an investment in future efficiency and cost reductions. EMPLOYMENT SERVICE INCREASES The total program increase for State employment service activities is $7,989,000. We wish to continue to improve the basic local office staffing. We are requesting 254 positions and $2,145,000 for this purpose. We will continue to allocate these positions primarily to the large metropolitan areas and for the purposes I have just discussed with respect to our present objectives. We will also buttress our management and supervision to aid in achieving these same objectives. Two positions and $50,000 are requested to continue our developmental work in connection with the labor inventory communications system. We request 291 positions and $2,500,000 to expand upon our efforts to assist older workers. The number of older workers is increasing and the number of veterans in this group is becoming larger. This is due to two factors. The first is that the avereage age of veterans as a group is higher. The second is that members of the Armed Forces with 20 years of service or more are retiring at the rate of 56,000 per year. Most of these veterans are seeking employment in civilian life. We will continue to assist the older workers in making job adjustments, in up-dating their skills which in many cases are obsolescent, in attaining new skills, and in the case of members of the Armed Forces in adjusting their abilities to the needs of civilian employment. We propose to add 7 mobile teams which requires 48 positions and $411.000 to expand our services to smaller communities. Experience has demonstrated that with mobile teams we can provide the variety of skills required for needed services to nonurban and rural areas in a more efficient manner than we can through small local employment offices. Such offices cannot be staffed in sufficient numbers to provide the same expertise as can be provided with a mobile team. Too, such offices are not as economical. The mobile team can develop training courses, refer individuals needing training to facilities available elsewhere, and provide other services needed locally on an intermittent basis to facilitate the functioning of the job market in smaller areas. Our request for test research is for 10 positions and $91.000. This will provide resources in the States to facilitate companion work being performed by our headquarters staff. Four areas of activity are involved. First is the development and validation of aptitude test batteries for specific occupations and used for worker selection; second is the improvement and further validation of the general aptitude battery which is used in counseling; third is the development of proficiency tests for use in selection and placement activities; and fourth is the development and validation of related measuring devices for use in counseling and selection activities. Our request also includes 172 positions and $1.500.000 for an expanded skill shortages information program. This program was introduced on an experimental basis during fiscal year 1965. During that period two surveys were completed in each of 16 pilot areas. The surveys were to test the feasibility and usefulness of collecting such information. The reports demonstrated the program's feasibility. The program has been continued on an experimental basis this year. Emphasis is being placed on refining techniques, exploring methods to increase the uses of the data in operations and establishing a valid statistical series. We plan to initiate the program in some 75 to 80 metropolitan areas in fiscal year 1967. Surveys will be on a quarterly basis. The information will be obtained by contact with employers, thus assuring sensitivity to essential manpower needs. Prompt processing of the data will insure its usefulness in serving employer's needs, in referring workers to jobs and in providing timely information on which to base local and national policy actions. The amendments to the Immigration and Nationality Act imposed added heavy responsibilities on local offices of the employment service. Of an estimated 76,000 determinations to be made in fiscal year 1967 approximately 65,000 will be made by the Department of Labor. An appreciable amount of the work to be performed will be done initially at the local level. Already the load is very heavy and we are taking steps to provide assistance to local offices within the limits of our present resources. The 170 positions and $1.292.000 requested will provide the financing necessary to continue this staffing in fiscal year 1967. MANDATORY ITEMS Mandatory increases are estimated in the budget at $22.061,000 after allowing for a reduction of $3,900.000 because of an assumed lower benefit workload. Of the total, increases of $1,234,000 and $3,675,000 and the decrease of $3,900,000 are directly related to the unemployment insurance program as I have described previously. The remaining mandatory amount of $21.052.000 will provide for salary and fringe benefit increases for State agency personnel. CONTINGENCY FUND For fiscal year 1967 the contingency fund is estimated at $10 million, the same level as appropriated in 1966. In both previous years contingency earnings were in excess of $20 million. Because of savings due to lower unemployment insurance workloads and lapse in filling new positions, both after the appropriation was enacted. the Bureau was able to meet the higher contingency costs. In 1967 however, the budget estimate already assumes significant decreases in claims workloads and normal budgetary adjustments will be more difficult to achieve. The Bureau will, of course, make every effort to pay contingency earnings equitably and fully to every State. MANAGEMENT IMPROVEMENT REDUCTIONS A reduction of $13.600.000 in the fiscal year 1967 budget estimate will be made possible by increasing efficiency of operations and deferring or reducing funetions of lesser priority. Numerous field studies will be undertaken utilizing the increased staff requested under the salaries and expenses appropriation. These extensive Bureau and State studies will assure that the reduction is not made at the expense of essential services and functions. Mr. Chairman, this concludes my statement on the grants to States limitation. UNEMPLOYMENT COMPENSATION FOR FEDERAL EMPLOYEES AND EX-SERVICEMEN Mr. DENTON. Then the unemployment compensation for Federal employees and ex-servicemen and salaries and expenses. (The information to be supplied follows:) STATEMENT OF ROBERT C. GOODWIN, ADMINISTRATOR, BUREAU OF EMPLOYMENT SECURITY UNEMPLOYMENT COMPENSATION FOR FEDERAL EMPLOYEES AND EX-SERVICEMEN Mr. Chairman, in successive programs beginning with the Servicemen's Readjustment Act of 1944, the Federal Government has provided the protection of unemployment insurance to ex-servicemen following their discharge from the armed services under conditions other than dishonorable. In 1958 this protection was made a permanent addition to title XV of the Social Security Act. Federal civilian workers, likewise, have been afforded this protection since January 1955, also under title XV of the Social Security Act. The benefits provided under title XV are paid to ex-servicemen and former Federal civilian workers in accordance with the unemployment compensation law of the State to which the Federal wages are assigned. These State laws govern the amounts as well as the qualifying and eligibility requirements for receipt of the benefits. The temporary protection afforded to ex-servicemen and former civilian employees is similar to the protection that is available to workers in private industry against the risks of involuntary unemployment. For fiscal year 1967 we estimate that the amount of benefits that will be paid under title XV will amount to $107 million. Of this total, we expect that $62.6 million will be required for unemployment compensation for ex-servicemen and $44.4 million will be required for unemployment compensation for former Federal employees. The $107 million estimated for the two programs is the same as the amount now estimated for benefits in fiscal year 1966. No specific information is available at this time on the number of military and civilian separations for 1967. However, experience during the last 2 years indicates that we may reasonably assume that the number of separations in 1967 will be approximately the same as in 1966. We are not able to fully appraise the effect of scheduled close-downs or reductions of military installations and further economy in Federal operations on title XV benefit costs in a period of assumed high-level employment. As you know, these benefit payments to unemployed Federal employees and exservicemen are mandatory under title XV of the Social Security Act. Mr. Chairman, this concludes my statement on the fiscal year 1967 estimate for unemployment compensation for Federal employees and ex-servicemen. SALARIES AND EXPENSES Mr. Chairman, we are requesting $22.009,000 for operation of the Bureau of Employment Security, an increase of $1,826,800 over the fiscal year 1966 appropriation. In addition to the programs authorized by the Congress for inclusion under this appropriation in 1966, the budget year estimate includes two new activities. The first is "Admission and Employment in Agriculture of Nonimmigrant Aliens." The second is "Admission and Employment of Immigrant Aliens" for which a supplemental estimate for fiscal year 1966 will be submitted later. All activities other than those conducted under the Manpower Development and Training Act will be financed from trust fund revenues. Mandatory increases in 1967 for such items as additional pay costs, withingrades, increased Federal Telecommunication Service charges, and reimbursement to the Post Office; offset by the nonrecurring cost of the Counselor aid Training program and nonrecurring equipment total $236,200. Transfers are proposed to fund the farm labor contractor registration program and the two immigration programs from the trust fund rather than from general revenue. An increase of $29,000 is provided to reflect a change in the usage of working capital fund services. Program increases are 121 positions and $2,703,800. These increases are primarily in the employment service and also include the amounts required to place 1966 supplementals on a full year basis. Program increases are offset by proposed program reductions and management improvements of 36 positions and $1,142,200. In total, the net program increase for 1967 is 85 positions and $1,561,600. With the committee's permission, I would like to discuss these items, as they appear in the document before you, in more detail. EMPLOYMENT SERVICE Mr. Chairman, we are requesting a basic program increase for the U.S. Employment Service of 79 positions and $1,596,600 for "Salaries and expenses" to enable us to administer effectively the expanded programs we are planning to carry on in the States in fiscal year 1967. Since these programs are described in my statement in connection with our request for grants to States, I shall, in the interest of brevity and avoidance of repetition, limit myself here to an explanation of the uses to which these additional S. & E. resources will be put. To strengthen Employment Service operations, we are requesting seven positions and $95,300. Two positions are to enable us to expand our manpower services in smaller communities. Such services are provided by means of mobile teams which provide the full range of employment services to rural areas in which full-time offices are not economically feasible. To date, mobile teams have been approved for 16 States. In fiscal year 1967, we plan to extend the program to seven additional States and study the feasibility of so serving other economically viable areas. This will create an additional workload in terms of guidance and assistance to the States, in evaluation of program effectiveness and review and analysis of operating reports. Also in connection with strengthening Employment Service operations, we are requesting five additional positions to extend the application of automatic data processing techniques to provide timely information on Employment Service activities for use in the management, operations and research functions at all levels. This program will require initial research to establish informational requirements, the design of data processing and related systems, and continuing administrative and technical supervision evaluation and refinement In the area of youth services, by the end of fiscal year 1966, youth opportunity centers will have been established in 139 areas throughout the country. The centers are being established on a phased basis and thus represent a steadily increasing workload in terms of demands on Employment Service staff for guidance in operating the centers and for program review and evaluation. We are requesting five additional positions and $67,100 for fiscal year 1967 to handle this growing workload and insure effective operation of the program. For many years the Employment Service has been a leader in the development and validation of various types of tests for use in the selection, counseling, and referral of applicants. Present tests, however, are not suitable for use with the seriously disadvantaged and hard-core unemployed, particularly those with language difficulties and substantial educational difficulties. Accordingly we plan to place increased emphasis and effort in four areas: (1) the development and validation of a nonreading edition of the general aptitude test battery; (2) the development of achievement tests for use in determining literacy training needs of the educationally deficient; (3) modification of the USES interest check list to make it more suitable for use with educationally deficient individuals; and (4) updating and establishing new norms for certain proficiency tests used for stenographers and secretaries. To carry out the program as I have outlined it, we are requesting seven additional positions and $101,000. The pilot job opportunity information program conducted jointly in fiscal years 1965 and 1966 by the Bureau of Employment Security (BES), the Bureau of Labor Statistics (BLS) and the State agencies demonstrated the feasibility of developing up-to-date information on existing job opportunities by means of employer surveys. Accordingly, we are proposing that the program be made operational, that it be expanded from the current 16 areas to 75 or 80 areas and that surveys be made quarterly. The program will continue to be conducted jointly by BES, BLS, and State agencies. This nearly sixfold expansion in the scope of the program will greatly increase the workload of the national office staff, which is responsible for the development of methods and guidelines and |