mendous losses, the District has lost a valuable training resource. and irreparable damage has been dealt to the potential for developing similar training opportunities with other businesses.

The principals here will go on, but the District is left to deal with similar businesses, and they will remember this fiasco. All they will know is that this business (Northern Systems, Inc.) had difficulties with a directly funded Department of Labor contract. In these cir cumstances, let anyone try to sell them on the idea of entering into a similar agreement with DOL. If this constitutes an example of the operation of the proposed regional office system, then, I submit the national manpower effort is better off without it.

The point I am making here is that the notion that effective training contracts for the disadvantaged can be negotiated by some regional manpower administrator dealing directly with employers, is ridiculous. It takes some knowledge of the local labor market. It takes some knowledge of what ought to go into that contract in the way of support and training content in order to be able to effectively maximize limited resources.

UPO-WCEP employees have staffed the NAB's office since its inception. I am advised that this is the best operating NAB's office in this Nation. It is the best for one reason: NAB's-District of Colum bia recognized early that simply preparing contracts and obligating funds forever in training designs that couldn't work could defeat their efforts. Consequently they insisted that the Employment Service not have anything to do with soliciting employer participation in the District of Columbia NAB's program.

Some 43,332 people came through this WCEP program from June 1967 through October 1969. Out of this number, we experienced a dropout rate of a mere 3 percent (1,299 persons). There is something

to be said for that.

I say that instead of scrapping this effort let's wait until we are sure that the local employment service approaches are ready to expand upon it. Let's not once again penalize these opportunities for the poor at the expense of conferring additional manpower jurisdiction upon the Employment Service. It has had 37 years of nearly exclusive jurisdiction and I say that enough ought to be enough.

I hope that the Service changes tomorrow. But at this moment, I don't see it in the cards. I think that our approach ought to be to maximize all resources in the country to assure a better manpower policy for this Nation.

Thank you, sir.

Senator NELSON. Thank you, sir, very much.

Without presuming to speak for the Secretary, which I can't do, I believe his position on the Employment Service is that the Employ ment Service would be in agreement with many things you have said. and that it is an established institution with 85,000 employees. Mr. HOLLIS. I believe it has nearly 100,000 now. It had $296 million in appropriations last year. Its appropriation for adminis

tration was nearly doubled.

that it is an established agency, and they have not historically had Senator NELSON. In any event, I understand it to be his position assumed or imposed upon them the role of dealing with the disad vantaged; that it is an institution that ought to be used; that he is going to impose upon them a responsibility in this field and try to

make them conform. If they can't get rid of them or transfer it to somebody else.

But he is concerned about the idea that you would have an established institution approaching 100,000 employees and not use that institution.

I think that is a rough summary of his view.

Mr. HOLLIS. I fully agree that it ought to be used, and I am not here to try to exclude the Employment Service from this area.

All I am saying is that aside from a mere promise to do better there is nothing in its 37 year history which offers hope. Promises to do better have been made on numerous prior occasions. The MDTA Act, which required, under the 1966 or was it the 1967 amendments, that 65% of the Act's appropriation be devoted, exclusively, to aid the disadvantaged. Had the Employment Service allocated any amount approaching that figure, from its MDTA resources, the plight of the disadvantaged-over the ensuing 3 years-would have been substantially bettered. That was a congressional mandate, not a Labor Department mandate.

I am saying they could have a 100 million people. The structure and its policies are wrong and we should get about changing that first. Mind you, all the line employees and the supervisors in the State and local employment service system are under merit systems. They have been there for a while. The only person not under it is the State director.

Mr. COARD. Could I address myself to the question you just raised? Mr. NELSON. Certainly.

Mr. COARD. On the question of the State employment services, I certainly agree it should be used to the maximum extent possible and made as relevant as possible in helping to serve the disadvantaged. I think there are some structural problems with regard to how far it can go.

I would also like to indicate that merely management improvement is not going to improve this.

Mr. HOLLIS. I quite agree with that.

Mr. COARD. The business of the Labor Department indicating, according to Mr. Shultz' testimony-and I wish I, like you, had had a copy of this ahead of time-the CEP guidelines, with the ommission of community action programs in the new bill, directs itself to the fact on page 7 that "When CEP's were organized there were some problems of program coordination and relationships of sponsorsubcontractor which needed straightening out," and the CEP guidelines are addressed to doing this.

We assume by the optimistic report of the Secretary today that these problems are straightened out or are well on their way to being straightened out.

I would like to indicate here that a great number of these problems in many of the bad CEP's were created before they were even born, and the Labor Department should take a great deal of credit or discredit for that. The fact of the matter is that in many cities-I think St. Louis is a good example-when the CEP money came in it tail wagged the dog and the State employment services, with the blessing of the Labor Department, took over what essentially was a good community manpower program and that tail wagged the dog there. The C program essentially was pushed out of the manpower business.

Now, later on, if the CEP program is blamed because its name is on the heading for a bad program, I don't think that is where the blame

should lie.

One reason why we fought the new CEP guidelines is because we did not want to see the same thing repeated where we seemed to have responsibility but in fact did not, and where we would be the front man or the bag man for any bad administrative decisions that came from Washington in the bureaucracy. That has been happening with us locally constantly. We have to be on the watchout for that.

Mr. HOLLIS. One brief comment, Senator, on the CEP guidelines. You are aware, I am sure, of the requirements for publishing major changes in congressionally approved programs. I, frankly, was surprised that those guidelines would have been issued on an operating program, approved previously by Congress, without the notice of hearing through publication of such notice in the Federal Register, the opportunity for hearing, the taking of testimony, and a decision by a Federal hearing examiner on the propriety of their issuance. I do have problems with them.

Mr. COARD. Senator, another point related to the one I was making a moment ago is the fact that based upon the deficiencies of the CEP program, which we seem to have indicated have been corrected or are being corrected, I fail to understand why the existing legislation which does, in fact, give recognition to the existence of community action agencies and their role in manpower as prime sponsors, why, under title I B these provisions would be eliminated. In other words, community action agencies would have capital punishment, essentially, meted out to them for problems of program coordination and other things which, again I indicated, were not entirely their respons bility, and, certainly, the indications are they are being dealt with fairly satisfactorily.

I see that the new legislation eliminates or does not make any mention or has no role for them and I want to indicate why what experi ence or what evaluation would indicate the need for their elimination. On the business of the job bank, I would like to stress that the job bank which is put in very fancy terms is really computerizing something which hasn't worked. As anybody knows about computer work, GI-GO garbage-in-garbage-out. It is not that bad in a sense because a job bank will help to collect jobs better which is all the State Employment Service has traditionally done. But it has not developed

jobs.

Developing a job is as hard and as difficult and as innovative a task as outreaching and finding persons who need jobs. I submit that an essential part of a job bank if it is going to be an effective job bank, particularly for the poor must be the developments on a very creative basis of the jobs which can be fed to the persons we are trying to seek. Computerizing the collection of jobs is not the answer to this inner

city problem.

Senator NELSON. I want to thank you gentlemen very much for your testimony. If you wish to submit supplemental material for the You have all made a very valuable contribution and we appreciate

record we will certainly welcome it.

your presence.

(The supplemental material subsequently supplied follows:)

Exhibit No. 1, Continued

Source:

Leviton and Mangum, Zederal Training

the Sixties PPS. 18-19.