10 to 20 percent of the unemployed in an area, what effect that has on the labor market, who is hired, and what happens to wage rates and so forth. One of the problems is that if the Federal Government is the employer of last resort, how does one keep people from leaving present jobs that are less satisfactory and applying for a Government-financed job of this character? I guess with all the debate that has gone on about it, we really don't know what effect it has. I think we have cause for some concern about going into a massive program of this character at this point in time. In fiscal year 1972, we are putting $1 billion into public service employment, and for the first time in my knowledge of any program of this character, we are using $65 million for demonstrations of special impact and $50 million for demonstrations of service for welfare people. So we have a test to see how it works out in a variety of ways, and I think that we should take a look at what those demonstrations show us before we undertake other activities of that kind. Senator TAFT. If I understood you correctly, you are not in favor of putting a limitation on manpower revenue sharing to limit the amount of public employment that might be involved? Mr. LOVELL. That is correct. Senator TAFT. I have some question about this. I think public opinion pressures might well lead toward funneling an excess amount of manpower revenue sharing funds into smaller levels of government, unless some limitation or auditing of that occurs. Mr. LOVELL. I understand your concern, Senator. I think it is a demonstration of the administration's faith in this system. As Senator Nelson knows, at one point we did fight very hard for a limitation on the amount of money on public service employment in other acts, but with our new philosophy under revenue sharing, it would be inconsistent to put a limitation on any one aspect of manpower services on the basis of what we believe the mix should be. If we are right, that local government will use good judgment, we won't have to worry. If we are wrong, we will find out over time. Senator TAFT. What do you think the effect of the passage of the manpower revenue proposal would be on the Job Corps? Mr. LOVELL. My guess is that it would probably be maintained pretty much at the level it is now. Of course, this would depend on communities being willing to put money into training of this kind, rather than into some other manpower effort. One of the great problems we have with the Job Corps today is to make a realistic evaluation of what percentages of our funds should go to it. There is no market test of what people think, and this is true of any program. But we are saying to a community, "All right, you have so much money now. If you want to use some of that money to send people to Job Corps, you may." We are saying, "You have to choose between doing that and trig them and giving them work experience. You have to make about using the money in the way you think is most desirable Senator TAFT. Thank you very much. 10 died Senator NELSON. Let me ask a further question on that. I think the question raised by Senator Taft on the Job Corps again raises the question: Where is that constituency? If there is no provision in the bill for it, there is not a single constituency in the United States that is going to support a Job Corps camp that will train people from another State. I know attempts have been made to bring Job Corps centers closer to home. But I know the Job Corps camp at Pine Lake in Wisconsin was closed. I don't think there were a half dozen people from the State of Wisconsin in that camp, when we were at maximum. No manpower program run by the local government is going to fund a job corps where 90-odd beneficiaries come in from another State. We raised this issue once before. Unless you protect the Job Corps, you mandate its dissolution right now. Mr. LOVELL. What I imagine would happen is that the local money would not necessarily be used to run a Jobs Corps facility although it could be used for some of the smaller centers. There is one in Cleveland, a women's job corps center, that has about 250 women in it. Perhaps that could be financed by the city of Cleveland. But some of the larger ones, obviously, would not be financed by local money. The one in Utah has people from all over the country. Various communities would have an option of buying a certain number of slots in that center. They might say, "We in New York City want to send a thousand people to Job Corps." They would buy slots in various centers throughout the country, and these centers could be operated in a variety of ways. They could be operated, as many are now, by private corporations, or they could be operated by States, or they could be operated by the Federal Government. The funding would be different. Instead of having the funds all come from the Federal pot, the majority of funds would come from local areas on the basis of how local sponsors saw the Job Corps serving disadvantaged groups vis-a-vis other things. Perhaps some funds would always come from the Federal Government, to maintain some ongoing capability. Senator NELSON. I don't really see how you can run a Job Corps program on the whimsey of the annual request for slots. It just wouldn't work. I don't see how it could work. You have a community trying to develop a manpower program and they say, "well, let's send 10 young people from this community this year," and the next year they decide zero. Meantime, you have a Job Corps facility out there that may or may not have a census that makes it practical to operate it. As a matter of fact, that was one of the early problems in the Job Corps camps when the statistics were developed with widespread publicity about the cost per enrollee, and in several of those I looked at, the computations were not valid, because they were making computations on camps that were operating at 60 percent of capacity, and had not reached the 100 percent. I don't know how you could run a national program like this based upon the guess of whether or not enough communities would say, "Let's send a young man or young woman to a camp, and let's buy x number of slots in that camp." I don't think we should. I think we have to decide to have a Job Corps program that is not a local program, or that we are not going to have one. Mr. LOVELL. Many businesses are run on the basis of not knowing what the sales volume is going to be in 1 year, and not knowing how well they will compete with the other industries for the consumer's dollar. I guess that is what we are saying here, that given the Job Corps and given its capabilities, how the local sponsors view it vis-avis other options for manpower money would determine how many persons were sent to the program. I don't know what the answer would be for that. If I were to guess, I would suppose there is enough interest in the Job Corps, and the results achieved over the past few years have been such, that communities would continue to send youth to it. I would hope so. Senator TAFT. On that subject, Mr. Chairman, if I might, I suppose every private school is run on the same type of a calculation basis, but what are the figures on cost? Do you have any recent figures on cost per enrollee in the Job Corps? Mr. LOVELL. Yes; per man year, it runs around $7,400. It runs around $3,300 per enrollee. Senator TAFT. How do you think the local areas are doing to justify that kind of expenditure for a single enrollee? Mr. LOVELL. First of all, they will look at some of the other programs. which have equal costs for far less services. They will consider what the individual gets from the Job Corps: 6 months of a wide variety of services, including health services, counselling services, skill training, basic education, and perhaps the most important thing of all, loyalty to an organization. Most of these kids have never belonged to anything before. The $3,300 costs looks quite well compared to a variety of other programs. The public employment service slot runs $7,200. I know if I were planning a manpower program, I think that rather than creating jobs at $7,200, I might send a couple of kids from highly disadvantaged families to Job Corps. I don't think that is too bade a trade off. Senator TAFT. You would probably be getting seven or eight in OIC if you had a program there. Mr. LOVELL. Sure. With the responses we have had to handle the problems of youth and the aged, and so forth, we have got to develop a better system for making judgments of who gets the money and how it is to be used. That's one of the great problems we have. We have to make those kinds of judgments from Washington in a way that seems responsive to the needs of the local communities. Senator TAFT. Thank you very much. Senator NELSON. I wonder if you would submit for the record the statistics on JOBS for the most recent period, last year? Mr. LOVELL. Yes, sir. Senator NELSON. The amount appropriated, the amount spent, the number of individuals involved, and all the statistics you have? Mr. LOVELL. Yes. We will. (The information referred to follows:) Current enrollment as of June 30, 1971_. Total completions and terminations during fiscal year 1971. 34, 808 106, 200 (44, 400) (61, 800) 61, 800 6, 200 11, 100 2,700 22, 200 4, 900 7,900 700 1,400 400 4,300 Mr. LOVELL. Let me make this comment. One of the aspects of the JOBS programs is that you don't spend the money until somebody is working and we have found that in the last year we have allocated less money to this program than we have in prior years. Whatever money we do spend was spent because somebody got a job out of it. So from that point of view, it has been a constructive effort. We are around the $125.6 million level in fiscal year 1972 for the JOBS program. Senator NELSON. Do your statistics show the lengths of time in the job and turnover? Mr. LOVELL. Yes. Senator NELSON. Thank you very much. Mr. LOVELL. Thank you very much, Mr. Chairman. Senator NELSON. The next hearing will be Wednesday, March 8, 9:30 a.m., U.S. Conference of Mayors and the National League of Cities. (Whereupon, at 12:10 p.m. the subcommittee recessed, to reconvene at 9:30 a.m., Wednesday, March 8, 1972.) COMPREHENSIVE MANPOWER REFORM, 1972 WEDNESDAY, MARCH 8, 1972 U.S. SENATE, SUBCOMMITTEE ON EMPLOYMENT, MANPOWER, AND POVERTY OF THE COMMITTEE ON LABOR AND PUBLIC WELFARE, Washington, D.C. The subcommittee met, pursuant to notice, at 9:45 a.m., in room 4232, New Senate Office Building, Senator Gaylord Nelson (chairman of the subcommittee) presiding. Present: Senators Nelson, Mondale, Cranston, Taft, and Javits. Staff members present: Richard E. Johnson, majority counsel, and John K. Scales, minority counsel. Senator NELSON. The hearing of the Subcommittee on Employment, Manpower, and Poverty will come to order. The committee is pleased to welcome this morning the representatives of the U.S. Conference of Mayors and the National League of Cities. As you gentlemen well know, there is no group in America that has had a greater impact on the consideration of manpower reform legislation and public service employment legislation than the mayors over the past 2 years. It was during a series of hearings in cities all across the country in 1969 and in 1970, that members of the committee came to understand the great need for comprehensive reform of the manpower programs. It was in those field hearings and especially at a hearing held before this committee a year ago in February that mayors made crystal clear to the committee that the No. 1 need in manpower is for jobs. Your testimony on February 8 of last year in support of the Emergency Employment Act was crucial in passing it so quickly into law. Unfortunately, the comprehensive manpower legislation which this committee worked out in the course of long and careful deliberations in 1970, was vetoed. The main objection to that legislation in my judgment was that it contained public service employment provisions. Now, the administration praises public service employment. Even the Council of Economic Advisers in their annual report speaks kindly of the concept and specifically praise the Emergency Employment Act which this subcommittee drafted. In this new environment, we are hopeful that comprehensive manpower legislation can be worked out. However, many difficult problems remain; balancing the role of cities and States; the size of the prime sponsors; the role for community action agencies and manpower programs now run by representatives of the poor; the role of the employ |