In only two of the 50 largest SMSA's do 75 percent of the residents live in the central city. In several of the communities, almost 75 percent exist outside the central city, it is not in fact a provision that will insure local accountability as a solution. Program planning must in fact be a local process involving different groups, including the poor and community action agencies.

The history of State plans has been that over a period of time categories, similar to Federal programs, get built into them, and they become inflexible. You may be transfering the problems of rigidity from the Federal to the State level.

Mr. RUTLEDGE. A final point, Mr. Chairman, and one which has been touched on both by Mr. Conway earlier this morning and by us. That is that the bill could be considerably strengthened by the addition of a public service employment program which provided funds to local communities and to local public agencies for the employment of persons to perform those jobs which are now undone in the community.

It has been the experience of several of us, including myself, in the administration of such programs that, though it is difficult, it is a relatively easy job to change many of the merit system requirements and to identify additional employment opportunities for the disadvantaged and for those who are not currently part of the market. such as New Careers envision and other programs envision.

I am not saying it is very simple. It is difficult in many communities to change antiquated merit system requirements, but in other communities, in community after community, it is possible to achieve success in this area.

But the big problem is simply the inability of the local community, the city, or other public agencies to finance those jobs and keep those persons employed.

So we would suggest, Mr. Chairman, that it would be extremely helpful to the purposes of full employment, and the purpose of bringing more persons into the economic system who are not now participating, as well as being very helpful in improving the quality of life in our cities if we could have additional persons from the ranks of the unemployed performing public service functions in education, in recreation, in housing, and in other areas where things are not being done. This bill should contain some authorization for financing those activities on a continuing basis as a contribution toward our national job creation goals.

Mr. FLETCHER. There is another issue which is not addressed in this bill, and if it is inappropriate to raise it at this time, I am sure you will inform me of that.

We have been greatly concerned that in some of the training programs in which we have been involved that the incentive to take the training and to take a job following training has been extremely small, considering the wage levels of the kinds of jobs for which these programs are training.

The Bureau of Labor Statistics produces about every 2 or 3 years something called City Worker Family Budget. The last one produced was in January of this year, and it showed that in the Greater Boston area, for a family of four to be supported in modest but adequate circumstances required a gross income of $10,500 a year. That

budget includes nothing, sir, for savings, so that the family cannot be considered to have any incentive to frugality.

Now, very few of the jobs for which these training programs are training people have an hourly rate of $4.50 to $5 an hour which is what $10,500 a year is.

We have, in fact, seen in some of our programs a disincentive begin to operate. For example, we employed a secretary who had been a welfare recipient, no husband, divorced, had four children.

We employed her at a salary of $105 a week, and yet the disparity between the fringe benefits, plus income, which she was receiving from welfare, and they are quite modest, could not be met by $105 a week salary.

One of the first problems, of course, is who looks after the children, somebody has to do that. There is a question of additional clothing that she has to have to come to the office adequately dressed. There is transportation. She is responsible for providing the medical services for her family, and then when tragedy struck in terms of illness, it took her 6 weeks to get back on welfare.

This is a positive disadvantage, as the word gets around.
That is an illustration.

The basic point is, I think, that one of the great disservices that manpower programs up to now have committed, at least from the point of view of participation on a genuine level by the poor, is the fact that the programs are oversold, that what can be delivered at present is not something which will in fact move a person to a better standard of living by moving them from welfare into employment. It has a negative income effect. This is not dealt with in the legislation. It ties, I think, to the whole matter, or at least my feeling is that it is appropriate for consideration, and that is at the national level that a more considered look be taken at a division of responsibility in this manpower area, one of which is to appropriate to the Department of Labor the identification of those elements required to provide a job market in which the Bureau of Labor Statistics minimum family budget, can, in fact, be paid as a wage, either by government, or industry, or one subsidizing the other-some mechanism should be determined. That is the first thing.

The second thing is that the educational system which itself produces most of the misfit problems in our society, where jobs exist but people can't take them, that that system work more effectively to reorganize itself on the one hand, and to improve its skills on the other, and take the responsibility.

Now, we feel that until those two very fundamental acts occur as positive, determined acts of both the legislature and the bureaucracies, that legislation such as this inevitably will continue the frustration, and that 4 years from now, sir, it may well be my privilege to sit here and discuss this with you.

Senator NELSON. Maybe 4 years from now I am not going to invite you back. [Laughter.]

Mr. RUTLEDGE. May I make a summary, Mr. Chairman?

It is the essence of our testimony that we support much of the purpose and thrust of the Manpower Training Act of 1969. But we seek to make it a totally responsive and effective instrument through which the manpower and training needs of this Nation, and particularly of its poor, can be dealt with.

We seek to insure that manpower programs can be effectively designed, coordinated, and implemented at the community level and that Federal, State, and local agencies can play a harmonious role in this process. This bill must orchestrate that sense of harmony.

The bill must also move to build a local capability and accountability for human resource programs and must preserve the flexibility in program design which the framers of the legislation intended. It should not create a vertical enclave of manpower programs, but should move to support a horizontal coordination of human resource programs at the local level.

It should not seek commonality of roles for different institutions, and it should inspire more than the traditional symbol of State role embodied in a State plan and State grant processing. In its search for uniformity of program structure the bill may give the illusion of decentralization without actually providing it.

The bill should give greater recognition to the role of the Office of Economic Opportunity and of the competence of community action agencies as advocates of the poor and innovators in the design of new approaches and providing job opportunities for the poor. We cannot assume that the innovative capabilities of OEO and the CAA's are no longer needed, and we must provide some more direct assurance of their participation consistent with the need for a broadbased community process in the design and execution of manpower programs. We must jettison the more traditional and apparently orderly State plan approach to program administration in favor of a local consensus and determination process which includes involvement of the poor and the CAA but which provides for local accountability and responsiveness.

As the Congress faces this question it may be well to remember a comment which H. Ralph Taylor, former Assistant Secretary of HUD for model cities and Government relations, made in a speech to the American Society for Public Administration. Taylor said:

The approach of creative federalism involves some massive adjustment in administrative behavior. The agencies and organizations that in distributive politics fought for their own, identified their clientele and protected it, are not easily adapted to the new environment.

Strategies and tactics that lead to jealous protection of autonomy, careful delineation of jurisdictional boundary lines, sporadic restrained inter-agency communication simply do not fit immediately the context of collaborative problemsolving. Old concepts of hierarchy, span of control, specific delegation of authority, and explicit definitions of responsibility die hard. So does the philosophy that order and structures can be regained somehow by consolidation of related programs and by institutional reorganization plans.

We believe that the Department of Labor with the help of the committee should prepare revisions in this legislation so that it will be couched in the needs of the 1970's and not the traditions of the 1950's and 1960's.

Much in this bill is forward looking and worthy of strong support. The substitution of a more responsive and people-oriented view of the role of various institutions including Federal, State, and local governments will perfect its implementation and give reasonable assurance of the success of programs initiated under it.

The other gentlemen who will be testifying on various aspects of manpower programs will, I am sure, wish to give you specific examples of current problems and needs in the field of manpower.

Mr. Aleshire and Mr. Fletcher will now join me in responding to any questions which members of the committee may have before we move on to the presentation of these other areas.

Mr. Chairman, let me thank you again for the distinct privilege of appearing before your distinguished committee and having the opportunity to present our views on this important piece of legislation. Some other members of the NACD panel will speak in more detail about some of the individual problems that we have raised.

Senator NELSON. Thank you very much, gentlemen. We will look for your proposed amendments to the language of the bill so that the committee can consider them. We appreciate your very fine contribution.

Senator NELSON. The next panel is a panel on concentrated employment program, consisting of Mr. Robert Coard, executive director, Action for Boston Community Development and chairman of NACD's Manpower Committee, Mr. Billy Leathers, CAP director, Tulsa, Okla., Mr. Steven Berman, manpower director, Community Renewal Team, Inc. of Greater Hartford, Conn., and Mr. Roger Williams, CEP, Springfield, Mass.

I might say to Mr. Coard and Mr. Fletcher that Senator Kennedy asked me to express his regrets that he could not be here today. He is chairman of the committee conducting hearings on reform of the draft system, and that is why he was not present today.

I will just repeat that you should identify yourselves for the reporter, and when you do speak, give your name so the reporter can have it correctly in the record.

Mr. Coard, you have a prepared statement?

STATEMENT OF ROBERT COARD, EXECUTIVE DIRECTOR, ACTION FOR BOSTON COMMUNITY DEVELOPMENT, AND CHAIRMAN, NACD MANPOWER COMMITTEE; BILLY LEATHERS, CAP DIRECTOR, TULSA, OKLA.; STEVEN BERMAN, MANPOWER DIRECTOR, COMMUNITY RENEWAL TEAM, INC., OF GREATER HARTFORD, CONN., AND ROGER WILLIAMS, CEP, SPRINGFIELD, MASS.

Mr. COARD. Yes, it is somewhat brief, Senator. Copies have been distributed. I beg your indulgence to read it.

Senator NELSON. Do your associates on the panel have prepared statements?

Mr. COARD. Mr. Berman has a prepared statement.

Senator NELSON. Your prepared statements will be printed in full in the record, or you may present your statements as you desire. Any member of the panel is free to interject his comments at any time. Mr. COARD. Mr. Chairman and members of the committee, I shall use my program in Boston as a case study. The new CEP Guidelines are dealing a severe blow to the concept of community action in manpower programs. More important, a CEP program which is endorsed by every segment of the community is being jeopardized by this Federal fiat. Most important, the poor of Boston stand to bear the brunt

of this decision.

The guidelines indicate that the prime sponsor is indeed to be the CAP agency. However, this is merely a gesture to the CAP agency, for

CAP is mandated to subcontract its manpower-in this case, CEPservices to the Division of Employment Security (DES).

The very reason our CEP program exists is because the Division of Employment Security has not been able to relate to and serve the core city community. Their structure and philosophy prevent them from serving the poor.

Their policies apply to the State as a whole; they are not tailored to the poor inner city urban areas. Change is complex; rigidity is the rule. I think the Secretary of Labor at this hearing yesterday complained himself of the rigidity of the Department of Labor and the State employment services in his testimony.

Hiring and promotion are based on antiquated civil service, use of irrelevant exams, degree requirements and absolute veterans' preferences. These make it impossible to hire people for the employment services in the inner city.

The locale of operations are not in the poverty areas. They are employer oriented; they solicit and collect jobs; they do not stress the development of jobs for the hard-core community. CEP, on the other hand, is geared specifically to serve the urban poor:

Policy in my agency, ABCD, Inc., is made by a board over half of whom are poor with the balance being metropolitan political, social, industrial and service leaders. We happen at the present time to have a board with a majority of the poor, but our president is a Yankee banker. We have a balanced board, and ethnically it has a representation from all aspects of the community.

Hiring for our staff is done from the communities where the programs are focused. Over 80 percent of our 800 employees giving services are themselves poverty area residents. I should say that our program is a $19 million program, with funds from Labor, HEW, and OEO, and $7.6 million are spent on manpower services.

Experience and effectiveness is the basis for hiring and promotion with us; this is the core concept; the use of neighborhood people to develop human resources in their own community.

Our facilities are geographically accessible, as well as being accessible from the point of view of social distance, which is important to the poor. Geographical and social accessibility saves transportation money, prevents confusion, and enables low-income people to identify with their center where their own friends and neighbors help them.

CEP is employee oriented. Specific attention is given to overcoming the traditional, often irrelevant hiring practices which exclude the community's disadvantaged. We have been fortunate to have had outstanding relationships with the business community in Boston.

You have in the testimony a statement of support for us, from the Associated Industries of Massachusetts and also an editorial from the Boston Globe, under the heading of "Arguing With Success." Individual companies have written the Department of Labor on behalf of ABCD on the CEP matter.

But I do not come to castigate the Division of Employment Security. I come only to say that they are not ready and that the guidelines do not demand that they become ready. The guidelines simply give the CEP activities over to them, and do not require performance standards of State employment services. We are read to meet anybody's performance standards in manpower services. We fear that someone's academic theories of what should look good, bureaucratically, will again fail.