STATEMENT OF RICHARD V. L. COOPER, DIRECTOR, DEFENSE MANPOWER STUDIES, RAND CORP.

Mr. COOPER. Thank you very much, Mr. Chairman. It is indeed a pleasure to be here this morning.

Let me begin by saying that I am here representing myself as an individual, and not Rand Corp. or its research sponsors.

I also wish to thank you very much for holding these hearings. I think the time is right. Indeed, one of the reasons that I started my research about 3 years ago was that no debate was taking place and nobody was looking at the evidence.

As a result, I am very pleased to see that such a dialog is taking place now. We need to look at what has happened and where we are going.

I wish to apologize for not having a formal statement because I did not get a copy of Dr. King's paper until about 10 o'clock yesterday and had to get on a plane at 1. But I have had a chance to read it and go over it and organize my thoughts.

I also wish to compliment Dr. King for the amount of material that he has mastered and gone over and on putting together what I think is an excellent paper. I have a number of disagreements, some major, with the findings and interpretations. But nevertheless, the amount of material that he went through was a major undertaking and, as I say, having been in it myself for about the last 311⁄2 years, I appreciate the size of the problem.

Let me state at the outset, per your question earlier to Dr. King about where he came from and what his original perceptions were. I did not enter my analysis as an advocate of the volunteer force, though I think you know that I have concluded that the volunteer force is a success and I think is a viable option for the future.

As a result, I feel strongly that we ought to look at the AVF experience and learn what needs to be done because, indeed, we have only made a partial transition to it. There are significant management problems that remain, but I do think we have to evaluate the AVF and the alternatives to it relative to what I think has been a successful experiment.

I am not opposed personally to a national service. I think that if a decision were made to go to a national service, it ought not to be because the AVF has failed, because it has not. Instead, such a decision would have to be based on some other national or social goals.

Dr. King has raised many issues and perceived problems with the AVF, and many of these are real such as the attrition problem he referred to earlier. He is also right that the DOD has made a great deal of progress to date in managing the AVF. But I think there is a fundamental problem remaining in that the Department of Defense still tends to view personnel still as a "free good," despite the fact that they make up some 50 to 60 percent of the defense budget, depending on how you count things.

As a result, the real problems of managing the volunteer force have not yet really been tackled and pose a major challenge for the 1980's and beyond.

To give you some background on that, the recruiting problems projected for the mid- to late-1980's is a result not of the manpower supply side but of the enlisted accession side-that is, the services have con

tinued to rely on experience-mix policies which they used under the draft, when the changing costs would suggest that they really ought to switch to a more experience-rich force, thereby reducing recruiting demands.

If it would be all right with you, I did bring along the last chapter of my book and would like to read a couple of pages from it which I think summarize my feelings.

Senator NUNN. If you would like, we can put the entire chapter in the record at this point. Has your book been published yet?

Mr. COOPER. No; it has not.

Senator NUNN. Whatever you prefer. If you would like, we would put it in the record at this point and let you read whatever you would like to.

Mr. COOPER. I would like to insert a short summary of the relevant sections.

[The information follows:]

THE ALL-VOLUNTEER FORCE

BACKGROUND

In the late 1960s, the volunteer force emerged as one of the very few alternatives for dealing with the growing inequities of the selective service draft. The increasing numbers of young men reaching military age each year and relatively constant (or decreasing) force sizes meant that a smaller proportion would have to serve in the military. Since the pay for junior military personnel was substantially below what comparably aged and educated civilian workers earned, those not forced to serve about 80 percent of the military-aged male population-therefore benefited substantially at the expense of those who were. The Gates Commission argued persuasively that those forced to serve should not have to pay a large financial price in addition to the other burdens of involuntary servitude, and thus recommended that first-term military pay be raised to a level comparable to that found in the civilian sector for people of that age and skill level (i.e., 18-21 year-old high school graduates). Congress concurred and raised first-term pay effective November 1971. Interestingly, by raising pay to this level, the Services could attract enough volunteers such that the draft would not be necessary. In other words, the substitution of a volunteer force for a mixed force with draftees, reluctant volunteers, and true volunteers did not require any extraordinary measures, merely the payment of a fair wage for junior personnel.

EARLY EXPERIENCE WITH THE VOLUNTEER FORCE

The All-Volunteer Force has worked. The first few years without conscription have shown that the military services can attract a socially representative mix of the desired quantity and quality of new recruits without the pressure of the draft and at a cost substantially less than commonly assumed. Moreover, the success of the volunteer force is not the result of high unemployment rates, though these clearly aided the recruiting effort, but rather because military service continues to be seen as an attractive employment option by a broad cross section of American youth.

Quantity. With the exception of modest Army and Marine Corps recruiting shortfalls during the first year of the volunteer force (and again during the transition quarter), the Services have successfully met their quantitative recruiting objectives since the removal of the draft. Moreover, because these recruiting shortfalls can be shown to be largely the result of shortages of recruiters in the field, unnecessarily restrictive quality standards, and unusually large accession requirements, the first-year recruiting difficulties are not indicative of longer run recruiting problems.

Enlisted accession requirements.-The key AVF issue is therefore not manpower supply, but enlisted accession requirements. As a result of Service policies such as limiting the flow into the career force, enlisted accession requirements are actually higher under the volunteer force than they were under the draft,

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when we would expect just the reverse. The key to the long-run success of the volunteer force, as well as to more cost-effective management of enlisted manpower, therefore rests in reducing enlisted accession requirements-and, hence, reducing personnel turnover rates. In other words, the cental AVF issue is one of management-specifically, reducing enlisted accession requirements. Quality. The quality of new recruits, as measured by such indicators as mental aptitude and educational attainment, has actually increased since the removal of the draft, and substantially so since about fiscal 1975. The real quality issues instead concern whether the Services' current quality-maximizing philosophy yields standards that are too restrictive (rather than too lenient) and whether the right balance among individual quality criteria such as mental aptitude and educational attainment is being maintained. Specifically, the evidence suggests that current quality standards are too strict and that the Services should accept more Category IV personnel.

Unemployment.-High unemployment rates, though certainly aiding the recruiting effort, are not responsible for the success of the volunteer force. The military services have used high unemployment to achieve unusually high quality standards, but since statistical estimates indicate that a 10 percent increase in the unemployment rate for young males results in only a two to three percent increase in the number of enlistments, the future of the volunteer force does not depend on continued high unemployment. Indeed, perhaps the greatest problem with the recent high unemployment is that the Services may unrealistically base future quality standards on what was achievable during the recession, rather than on what their requirements dictate.

Social representation.—Although the numbers of blacks entering the military have increased steadily during the seventies, the increase is largely unrelated to the volunteer force. The proportions of blacks in the force would have been approximately the same whether or not the draft was ended. The increase is explainable by such factors as the substantial increase in the proportion of black youth found eligible for military service (from about 12 percent in the mid-fifties to 40 or 45 percent today), the unusually high unemployment rates experienced by young black men, and the fact that wages for full employed blacks have not kept pace with those of their white counterparts during the seventies. The difference between the AVF and the draft is therefore not in the percentages of blacks in the force, but rather that the AVF has not discriminated against blacks the way the draft did.

Second, the increasing proportion of blacks in the force is not an indicator that the AVF has resulted in an army of the poor, as there as many new recruits from middle and high income areas under the volunteer force as there were during the prelottery draft, presumably the most socially representative period of conscription. Also, the AVF regional composition and urban-rural makeup of the force is remarkably similar to that under the draft.

Cost.-Defense manpower costs have risen enormously since the early sixties, but the attribution of these costs to the AVF is plainly incorrect. Since, at most, a few hundred million dollars could be "saved" from the defense budget by returning to the draft, one of the presumed advantages resulting from a return to the selective service draft, budget cost savings, would thus fail to materialize. Instead, the vast majority of manpower cost increases can be attributed to explicit policy decisions in the past, such as (1) comparability pay increases for civilian and career military personnel, and (2) the retirement system.

Far more important, the debate has failed to recognize that the real costs of military manpower have declined since the removal of the draft. Because the draft underpriced the cost of junior military personnel, budget expenditures did not reflect the real resource cost to society of those serving in the military and, furthermore, did not capture the large amounts of real resources expended for draft avoidance. Thus, not only are the budget expenditures for the AVF less than generally assumed, but the real costs of manpower have declined.

Problems. To be sure, there have been certain problems, such as the first-year recruiting shortfalls previously mentioned, but these have been largely problems with the way that the transition was managed, not with the fundamental concept or policy. Other problems remain, such as reserve forces and physician manning. However, these problems are more a result of finding the right management and force structure solutions than of the volunteer force. For example, although the reserve forces have historically been structured as a "mirror image" of the active forces, common sense would seem to argue for alternative solutions such as a more experienced force (where capability is maintained but not developed). Thus,

whereas the narrow application of the volunteer approach to the reserve forces has led to manning difficulties, the real problem is that the "right" manning configuration and personnel policies have not been implemented.

SYSTEMS IMPLICATIONS

Although it has perhaps been most common to view the volunteer force in the narrow sense of such items as recruiting objectives and advertising budgets, the real implications of ending the draft are much larger. The nearly three decades of postwar conscription encouraged the military to develop and maintain patterns of manpower utilization and management that are neither cost-effective nor equitable and, as a result, add needless billions of dollars to the defense budget.

The basic problem is illustrated by the way that the volunteer force was achieved, since rather than reexamining the demand for manpower as manpower costs increased, the personnel managers were charged with the responsibilities for obtaining the "required" numbers and types of personnel. Though personnel policy remains an important element of the manpower management problem, the more substantive questions related to costs and efficiency are determined in the requirements process. As a consequence, defense policy and defense costs are today driven largely by manpower policies, which, though perhaps sensible under the draft, add needless constraints and unnecessary costs to defense planning and budgeting.

The problem centers on the fact that manpower-especially junior personnel→ was viewed as a "free good" until the implementation of the volunteer force. Since the draft always provided adequate numbers of personnel, there was less need to question the efficiency of manpower utilization. Thus, one of the most important byproducts of the AVF has been to provide a framework for addressing the efficiency of manpower management and utilization policies.

By putting previously hidden costs "up front," the AVF has made manpower problems more visible, a visibility that has been heightened by markedly increasing costs in other, non-AVF related areas of manpower. To date, however, the possible efficiency gains (and corresponding cost savings) have gone largely unrealized. To achieve these improvements, we must not just understand the AVF, which provides the context for improved management, but must address the major areas in need of reform: requirements; compensation, retirement, and tenure policy; and training.

Mr. COOPER. I would just like to read a couple of short sections. My purpose this morning is more to highlight what have been perceived as problems and yet where I think we have not really recognized the fundamental, underlying causes. There is probably no better example than the social representation issue that Dr. King raised. Two important findings emerge with respect to social representation under the volunteer force. First, although the numbers of blacks entering the military have increased steadily during the 1970's, the increase is largely unrelated to the volunteer force per se but is instead explainable by such factors as the increasing proportion of black youths found eligible for military service.

To give you some background on that, it turns out that in the period 1953 to 1957, only 12 percent of the black youth were categorized as mental category III and above, that is, ranking in the top 70 percentile of the mental aptitude spectrum. Today, that figure is between 40 and 45 percent. That figure alone, I think, helps to explain a substantial amount of the increase that has taken place. That is, an increasing proportion of black youth are found mentally and physically qualified for military service, people that were formerly declared ineligible.

I have gone on to do a considerable amount of analysis on the proportions of blacks in the force and I conclude that the number of

blacks in the force, had we kept the draft, would have been approximately the same as we see today without it.

I, therefore, go on to conclude that the difference between the volunteer force and the draft-the selective service draft-is not in the percentages of blacks in the force but rather that the AVF has not discriminated against blacks the way the draft did.

Second, the increasing proportion of blacks in the force is taken by some to be an indicator of the fact that the AVF has resulted in an army of the poor.

Senator NUNN. Let me ask you one question on that point. Are you basically saying that the draft discriminated against blacks by not taking enough blacks?

Mr. COOPER. It discriminated against blacks by paying a very low wage when, in fact, whites were able to avoid military service by going to college and through various deferment programs, even under the lottery.

Senator NUNN. I am losing your point here. As I understand it, your basic premise is that, if we had not gone to the All-Volunteer Force that due to the increased percentage of blacks in higher mental categories and the decrease in discrimination, we would now have as large a percentage of blacks if conscription had not been eliminated.

Mr. COOPER. A number which, as Dr. King pointed out, is larger than their national share.

Senator NUNN. All right. Tell me how you reached that conclusion because I didn't follow it.

Mr. COOPER. What I based my conclusion on is that, with the very low military pay that characterized the draft, blacks ended up bearing a disproportionately large share of the burden of conscription; that is, because of the low pay.

Senator NUNN. That would mean there would have been more blacks, percentage-wise, at that time than now. It seems to me there is no connection between that point and the fact that the percentage of blacks in the service has gone up. That assumption would mean there would have been more blacks in the service.

Mr. COOPER. That is correct. What I am saying is that the debate has come to focus on the percentage of blacks in the force and, further, that had we maintained the selective service draft rather than implementing a volunteer force, the percentages would have been approximately the same, plus or minus two points.

The difference between the draft and the AVF is that, with the more equitable pay rates that have characterized the Volunteer Force, young blacks entering the force are now being paid a fair wage, whereas they were not under the draft.

Senator SCOTT. Were young whites paid a fair wage?

Mr. COOPER. No, they were not.

Senator SCOTT. I don't see the distinction here in blacks and whites. We are talking about people, aren't we?

Mr. COOPER. But much larger proportions of whites were able to avoid military service. If you go back, one of the numbers that appears to be remarkably constant over time is that, if you take the percentage of category I-III blacks relative to their category I-III population base since the early 1950's through the 1960's and through the 1970's, they have served in roughly twice the proportion as have young whites.