interface in all provisions with the Job Training Partnership Act, but as we do in many areas of law, for example, as we do in worker health and safety, we had requirements in the State law which will be beyond the Federal requirements.

That is our underpinning for job training here in the State of California, all of it interlocking with the Job Training Partnership Act. Now, here in California let me say, very frankly, that in our humble opinion we have not yet come to bat.

There are many reasons for it. I might even stipulate even the legislature is equally at fault. For example, our membership, our involvement with the council is not nearly what I'm certain you intended in Washington. It certainly isn't what any of us intended here in California.

I might stipulate, and this will be news to some of the people in our audience, that we're going to rectify that to some degree here in California because Governor Deukmejian received day before yesterday notice from the senate rules committee that I was to replace Senator Lockyer on the State job coordinating council and I will be assuming that position.

And I would assure you that from this point on there will be greater involvement on the part of the State legislature and everybody, and we will be bringing everything that we carry with us from the Senate and from the legislature into providing assistance to that body.

Certain areas I want to touch on: I want to talk about funding partners, I want to talk about performance contracting and I want to talk about creaming. At the present time the Governor's allocating the 78 percent funding of title II to the service delivery areas, and this of course is mandated by section 202(a), to recognize the comparative levels of unemployment and the number of economically disadvantaged among the various SDA's within the State.

We noticed well along, and I think I can say this without having detailed research as to what is happening in all of the communities, and the record varies, there is a reluctance, and we saw it when the law was being directed, to fold welfare recipients into the program.

In Sacramento, when we were initially directing the language there was outright resistance to it, and the resistance would have been greater, there would have been no mention at all had it not been for the fact that we finally had to say to everyone:

Fine, if you are going to pressure the legislature to do that we will make it public and we will embarrass you on it, because how are you going to tell the government "Put the welfare recipients to work, and then when we have the training apparatus, which is being developed by the Federal Government and by the State Government and the parties—we are going to be a party to that, we're going to be responsible for it, for the persons who are going to be sitting at the local level-do not want to touch these persons."

It's another reason to have FESA. It's another reason we need FESA, and many think it's another reason we need to strengthen FESA.

Now, in a State as large and as diversified as California there are sevoral distinct regional economies with varying degrees of economic opportunity for both employer and employees, and I'm going

to finish up in just a minute, because I know you're on a tight schedule.

For example, in areas such as Orange County there's a low level of unemployment and a high, very high level of economic opportunity. There are jobs going wanting out there, not wanting because of bodies, because they require varying degrees of skill level now. So you couldn't just walk anyone in, but of course if you have the people who have the skill levels who are required-which are required in those jobs, there are jobs there. We find the same thing, for example, in San Diego County where they're undergoing tremendous growth, where there is tremendous new movement from other sections of the State, as well as from out of the State.

So you have low unemployment, high economic opportunity. In the northern region of the State, there's a high level of unemployment, and a great need but a low level of present and possible future economic activity. The timber industry, for example, we witness funding being made to programs in those areas.

No place to employ them. They would have to go 80 miles before we get into a section of the State, even northern reaches of the State, where it's reasonable to expect that they would be able to compete. Even, I think, Marty, as you will remember, when we were thinking before you left the State legislature of how we could link transportation up with that.

That would not satisfy the State, and that's why I say, and I'm certain that with our having these varying patterns in California I'm certain that there are other States that have that, so, No. 1, I would hope and I would appeal to you that at the Federal level, you look at the fixed stringent funding level-some manner of variance, some factors that would provide the opportunity to balance up economic opportunity with folks who could be trained and would have either the level of unemployment versus the opportunity, and vice versa there.

And I don't imagine that that is going to be the same in any area forever. I think if we're looking at it realistically and if we're looking at the kind of industries that are going to be the growth industries, not only here in California but nationwide, we probably need to have a great deal of flexibility in that regard.

And at one period in time we're looking at one picture, at another period in time we will be looking at another. All right, performance contracting. We heard a lot about it. We had people say that the law was-the ink was not dry on the law yet, and people were contacting us and saying well, they wanted to change it.

It's too stringent. I said-I reminded the people, I said "You know, we just came through a period of poverty programs. We came through a period of CETA and what have you. I think we all know the only thing that really, the thing that really caused the negative attitude in relation to CETA is that we had people that we were paying to train people, and you know, there were no jobs there."

So the people that made money were the middle people. We paid out the money, government paid out the money, the taxpayer paid for it and there were no jobs. So I have indicated to people that yes, we are already in new economic times, and that liberals as well as anyone else, and of course we know that we all look at dol

lars the same, regardless of what your party and your philosophy might be.

And when people learn how to utilize dollars intelligently, philosophy has nothing to do with it, and I just told them. I said the day of our not getting at a minimum 55 cents for every dollar is gone, and we are doing well when we only get 55 cents.

Now, I'm not naive enough, and I know of no economic times in this Nation when a person has really gotten 100 percent on the dollar, not even in some of the best investments because you always have to pay the broker and the middle folks and what have you.

So you really do not accrue 100 percent, but this is something that you're going to hear a great deal about. I know you're going to be banged on in Washington on it. We're being banged on it here. We have no intention of giving, and I might stipulate that we have the support of the business community and labor and the Governor in that regard.

But I think part of the story that we have to take to the people, and I really think we have a selling job, because for example, when I outlined the foundation that we already have established here in California, and much of it put together in tandem with the Job Training Partnership Act, we have-Bill Greene hasn't, the California Legislature hasn't, we haven't really done the kind of selling job that you should do.

So this is not a comment I make about other people which does not apply to us as well. I could plead that we were so busy trying to get ahold on things and trying to shape things and trying to change and formulate something that made sense, but in the final analysis that is no excuse.

And I bear responsibility for that, and will state on this record and publicly that there has been a change.

I believe, and this of course is not to criticize the Congress, because the leadership there could be no greater than that that we have now. But I think the need to indicate to the public-we made some revolutionary changes.

Many people, you know, we mouth it but no one out there repeats it. They do not realize that the change which has happened in public policy, in the foundation which has been built in public law relating to employment and training is revolutionary in the United States.

But it's our fault that they don't know about it. For example, it's our fault that we don't talk about full employment any more. So we have to build into our public expressions more of that. I think we have to seek out the scholars, I think we have to seek out the editorial writers.

I don't think we are going to get very much from reporters, because they just don't dig in depth enough to be able to tell the story, but we do need to go to the editorial pages. We do need to get the networks so that this story can be told.

But suggesting that performance contracting rules to some degrees be modified, I would caution you, please, please examine that very thoroughly, because our test is what do we get? In fact, I would argue that the economic and competitive challenge which

not only California but this entire Nation is facing, we cannot afford it.

We are sending ourselves down the tubes if we do it. Anyone that wants that is not concerned and is oblivious of our economic need in this Nation for that. It's no longer a luxury. It's no longer a program that we're just going to have for people.

We need it for our survival. We need it because of the competition. We need it because of the shifts that are taking place in the economy that we're just now beginning to understand. We need it because we are very much a part of an interdependent, international economy.

And that is the name of the ballgame forever, and what anyone thinks about it, it isn't going to change, whether it's labor, whether it's management, whether it's politicians, whether it's the clergy, whether it's-it's not going to change. All right?

For those kinds of reasons, we cannot afford it. We will be harming our economic survival, we will be harming our posture and our ability to compete if we back up on that and then it doesn't make sense anyway. How do you pay for something you don't get?

Of course, now we know that we never intended that in the first place in other areas where it came up, but this time we cannot give on that one moment.

Now, on training. By way of comments that suggest that the Job Training Partnership Act could result in a creaming process whereby the more disadvantaged are passed over in favor of those who are handicapped, in California as I pointed out with the kind of base here, that is not possible.

Persons who have not unless-the SDA's and the PIC's are not doing their jobs. You see, there's no reason for the PIC's and the SDA's, unless-well, I don't want to say that too blanketly, because there should be interrelationship, there should be contracting and what have you that is intended, that is desirable, that is wanted. But there is no reason in California for anyone who has UI earnings to be in any program which is federally funded only, because we have our UI funds posted to take care of that. Now, if we get into a regression again where-then, of course, we're going to have what we have. We're going to get into the category where we have a displaced worker instead of talking about a different kind of thing.

The bottom line, and this will touch on my written remarks, and I really have skated all over them and haven't gotten down to any of the intellectual side of it, but I'll let the folks read that Mr. MARTINEZ. We'll select those for the readers.

Senator GREENE. Yes. Right.

In past times, we were concerned with equity, we were concerned with equal opportunity, we were concerned with minorities, we were concerned with women, we were concerned with the handicapped getting an opportunity, having a full opportunity for training and thereby for job placement, thereby for gainful employment. With the economic changes that have taken place, with black soldiers, with the-well, I might say internationalization of steel, with autos and all the other things that we've had, with the vast changes that have happened in the rural economy, which has surely affected our heterogeneous foundation here in California, we

now need to be concerned with providing people to fill the jobs that are going to be necessary as we begin to meet our competition. From the day, I guess in 1977, 1978, in which productivity was forced to become the watchword, we made the shift.

We have a body of law with the Job Training and Partnership Act, and fortunately here in California are accompanying and complementing laws to meet that, but the message must be carried that not only is equity the hallmark, but the survival of this economy, the ability of people from all segments. we can no longer afford to have that high population of people-I don't know who they are or whatever the reasons might be, we can no longer afford to have that.

We need more play. We need more flexibility in the full range of work force, so that there can be interchangeability, because the thing that I think anyone who is even a brandnew student of economics sees is that from now on we will have no more of a Bill Greene finishing high school in Los Angeles-I'm not from Los Angeles, I finished high school.

But using myself as an example, and going into a plant with the idea that I'm going to be there all my life. That is not going to happen to me anymore. We know that. And it's not going to happen because of economic changes that have already taken place and are going to take place to a greater extent much faster.

In fact, I'm going to have to be trained across an interchangeable field, and we know that, and that is true of people that are disadvantaged, regardless of what their color is, and in spite of what their educational level is.

With that, I'm finished. Thank you.

[Prepared statement of Senator Greene follows:]

PREPARED STATEMENT OF HON. BILL GREENE, STATE SENATOR, CALIFORNIA

Prior to the enactment of the Job Training Partnership Act the basic function of employment training programs was to prepare the unskilled, both youth and adults, for entry into the labor force. In addition, job training was provided to the economically disadvantaged and others facing serious barriers to employment so that they too could have an opportunity to secure productive employment. The primary goal of U.S. manpower policy during that time was primarily one of equity.

As early as 1973, economists, such as John Kendrick, began to comment on the decline of U.S. productivity. The principal reason for their concern over the decline in productivity was that society's needs could be more easily met with an expansion in the GNP and the resultant increase in government revenues.

By 1979, California began to experience the same plant closure phenomenon as had been happening in both the North East and North Central states. California's auto, steel, and rubber industries were devastated as a result of foreign imports, first from Japan, and then later from South Korea, Taiwan, Hong Kong, Singapore, Mexico, and Brazil. Predictably, the economic threat from these newly industrializing third world nations drew a sharp response. U.S. domestic steel producers filed unfair-trade-practices complaints. The auto industry sought import quotas or higher tariffs, while other affected industries, from textiles to petrochemicals, clamored for some sort of protection.

A totally different approach to the problem of foreign competition was advanced by economists. They felt that a reverse of the ongoing decline in productivity would offset the relatively higher U.S. labor costs. The end result of such a shift would be that the U.S. would become more competitive in international markets. In 1984, the U.S. economy suffered a record trade deficit of 123.3 billion dollars. This deficit cost our economy two to three percent of its gross national product. In the present year, according to Citibank, the trade deficit could rise to a staggering 152 billion dollars. The Christian Science Monitor quoted Fred Bergsten, the Director of the Institute for International Economics, that for every billion dollars increase in the trade defi