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3. Community Service Employment” is to 1) "meet severe problems of unemployment and under-employment", 2) “prepare such persons for jobs in the private sector", 3) "increase opportunities for local entrepeneurship", and 4) "meet critical national needs for community services”.

Eligible participants are those who are "OEO” poor.

Money ($400 million in the first year and $500 million in the second) is allocated such that 40% is flatly granted to the states, with 60% to be allocated by the Secretary of Labor.

Eligible areas are to be those with "high concentrations or proportions of unemployed or low income persons", and includes all OEO "target areas".

A single prime sponsor, where existing the CAA, is to be designated to receive all federal funds for manpower programs in the designated area. Among the responsibilities of the "prime sponsor" is to "establish priorities among community service needs”, and to provide participation of various groups in the planning. The local plans are to be coordinated into a state plan,

Funds under the program are to be used to: 1) “provide jobs immediately", 2) "provide placement services" for those involved in federal manpower and antipoverty programs, 3) to provide "further education, training and necessary supportive services * * * based maintenance, transportation, health, family, day care, counseling, placement * and 4) to promote the establishment of local service companies * * *"

These “local service companies", which would be aided by funded "service development organizations” (to provide technical assistance to the local groups). are designed to provide opportunities for local involvement.

Special emphasis is placed upon employment programs in public safety fields.

Those who participate in this program are to be given priority for entrance in private sector training and employment opportunities.

4. An Economic Opportunity Corporation" is established to 1) "be a central source of information and research", 2) "furnishing technical and financial assistance to private organizations *** in planning and carrying out" programs, 3) "development and implementation of governmental antipoverty programs" designed to encourage private sector efforts; 4) coordinate private efforts of "training programs and employment opportunities", 5) encourage business ventures; and 6) apply "modern business management techniques to the solution of social problems".

The corporation is to consist of 15 members, 5 appointed by the President and the other 10 elected by the members of the corporation which consists of persons who buy shares in the corporation or contribute to it.

5. The "Comptroller General" is to evaluate the program (a precedent set in the 1967 Amendment to the Economic Opportunity Act).

6. The "Tax Credit Plan" would give to employers of the "disadvantaged" (as defined by the Secretary) a sliding scale tax credit:

1) 75% of the first 6 months wages;
2) 50% of the second 6 months wages; and

3) 25% of the second year's wages. An employer could choose either the tax-credit plan or the regular MDTA training funds, but not both.

7. "Funding" of the community service employment section would be $400 million (for 80,000 jobs), approximately $556 million for the private sector program (this assumes 150,000 jobs via the tax-credit route and 70,000 from on-the-job training, a different “mix" would mean a different federal cost), and $20 million for the Economic Opportunity Corporation.

COMMENT ON THE BILL The “Statement of Purpose" is good including as it does the broad description of the underemployed (Sec. 101A), the linkage of manpower needs and service needs (Sec, 101B). However, we have some question about the heavy emphasis on the "basic responsibility" of private enterprise (Sec. 101(1), although we concur with the charge that government should aid private enterprise (Sec. 10102), the "residual responsibility" of government (Sec. 101C3), and the income maintenance. The major role of the private sector should be to make productive and competitive employees of the disadvantaged.

The "Community Service Employment" program is good in its definition of parpose (Sec. 401), although its definition of "low-income" is too narrow as only "OEO" poor (Sec. 402 2). The administratire arrangements regarding the prime sponsor (Sec. 404, 409) are good, especially the provision for "establishing priori

ties of community service needs” (Sec. 409B) as preliminary to developing a manpower program. However, we think the state plan pattern (Sec. 410) too complicated and cumbersome, but in any case it should add consideration of the manpower situation in so far as public sector employment to Sec. 410(a) (3) (A) (III) (page 19). The program's purposes (Sec. 405) are not as satisfactory as the Clark Bill, especially the absence of career advancement, although if provision of "maintenance" (Sec. 405B3) means a training stipend, it is a useful addition. The "local services companies" (Sec. 407) concept seems to be interesting, but is not very specific. The public safety part (Sec. 408A) is deficient in the lack of concern for entry of the special personnel into regular police employ. This deficieney is true throughout this title.

The “Economic Opportunity Corporation" in its technical assistance role appears to be useful; however, we would want to see more explicit policy guidelines for its operation.

The "Tad-Credit" plan appears to be useful, and we like the idea of "competitive" or "option-allowing" alternatives for private sector involvement. A danger, however, of the tax-credit plan—and indeed of any program without provisions to the contrary—is its tendency to "cream" and thus ignore “hard core" people.

"Funding": This provides funds for 80,000 public sector trainees as compared to Clark's 300,000 in the first year, and an estimated 220,000 private sector jobs ( 150,000 tax-credit and 70,000 on-job-training) as compared with Clark's first year 150,000.

SUGGESTIONS 1) Comment the statement of purpose as properly redirecting MDTA to today's needs. Also, for the linkage (as does Clark, but not as explicitly) of manpower needs and service needs. We have questions as to the weight given to private sector responsibility, and want to stress the need to make productive and competitive employees of the disadvantaged.

2) Referring the public sector, we think Clark's provisions are better, especially its emphasis on advancement and the details of the program (Clark Bill, Sec. 102), its richer funding, with the additions noted in the Clark testimony. Javits does offer a good suggestion on "establishing priorities of community service needs” (see 409B), which could be added to Clark Sec. 102. Also, some comment encouraging the "local service companies" might be added to Clark. What we are suggesting here then, is Clark plus our comments on it plus the above noted additions from Javits—a good public service employment program.

3) The Economic Opportunity Corporation technical assistance role, the data collection on Section 106, and the evaluation function of the Comptroller General (with a caveat as to whether that is the best place to do such qualitative evaluation) appear to merit support.

4) As to the private sector, we think here that one might add to Clark's section, the tax credit plan of Javits. In summary, we are urging an amalgam of the two bills with:

1) The Javits Statement of Purpose slightly amended as to private preeminence.

2) Clark on the public sector with the Javits additions.

3) Remaking of Clark on the private sector with Javits' tax credit addition but with a question as to the Economic Opportunity Corporations program (but not technical assistance) functions.

4) Inclusion of Javits data collection and national reporting and evaluation. Senator CLARK. The subcommittee will stand in recess until Friday at 10 a.m., at which point we will hear from Mayor Walsh of Syracuse, Mayor D'Alesandro of Baltimore, and Dr. Esser, executive director of the North Carolina Fund.

(Whereupon, at 12:55 p.m., the subcommittee recessed, to reconvene at 10 a.m., Friday, April 5, 1968.)

EMPLOYMENT AND TRAINING LEGISLATION-1968

FRIDAY, APRIL 5, 1968

U.S. SENATE,
SUBCOMMITTEE ON EMPLOYMENT, MANPOWER, AND POVERTY,
OF THE COMMITTEE ON LABOR AND PUBLIC WELFARE,

Washington, D.C. The subcommittee met at 10 a.m., pursuant to recess, in room 4200, New Senate Office Building, Senator Joseph S. Clark (chairman of the subcommittee) presiding.

Present: Senators Clark (presiding) and Javits.

Committee staff present: Michael W. Kirst, professional staff member; and Robert E. Patricelli, minority counsel of the subcommittee.

Senator CLARK. The subcommittee will resume its session to take testimony on S. 3063, the Emergency Employment and Training Act of 1968.

Our first witness this morning is Mr. George H. Esser, Jr., executive director, North Carolina Fund, and vice president of the National Association for Community Development.

Mr. Esser, we are happy to have you with us. Do you have any colleagues you would like to have sit at the table with you?

STATEMENT OF GEORGE H. ESSER, JR., VICE PRESIDENT, NA

TIONAL ASSOCIATION FOR COMMUNITY DEVELOPMENT, AND EXECUTIVE DIRECTOR, THE NORTH CAROLINA FUND; ACCOMPANIED BY RICHARD WENNER, EXECUTIVE DIRECTOR, NATIONAL ASSOCIATION FOR COMMUNITY DEVELOPMENT; AND WILLIAM PURCELL OF THE STAFF OF THE NORTH CAROLINA FUND

Mr. ESSER. Yes, sir.

Accompanying me are Richard Wenner, executive director of the National Association for Community Development, and a native of the Commonwealth of Pennsylvania, and Mr. William Purcell, staff of the North Carolina Fund.

Senator CLARK. I will ask to have Mr. Esser's statement printed in full in the record at this point and then Mr. Esser, you may either read it or ad lib on it and we will have a little colloquy as you go along. (The prepared statement of Mr. Esser follows:)

(249) 06-753-64---17

FOR

PREPARED STATEMENT OF GEORGE H. ESSER, JR., VICE PRESIDENT, NATIONAL

ASSOCIATION COMMUNITY DEVELOPMENT, EXECUTIVE DIRECTOR, THE NORTH CAROLIXA FUND

My name is George Esser. I am Executive Director of The North Carolina Fund' whose office is in Durham, North Carolina.

I appear today as Vice President of the National Association for Community Development, an organization which numbers among its membership approximately 650 community action directors, staff, and others, including state associations of community action officials, interested in the success of the economie opportunity program. The National Association for Community Development was incorporated in 1965 to stimulate and assist the national effort to provide all citizens with the opportunities necessary for them to reach their full human and economic potential. NACD also helps to develop professional competence in the administration of state and local community development programs and works with all public and private agencies concerned with the development of human resources.

On March 3, 1968, the report of the President's National Advisory Commission on Civil Disorders was released. This report which directs the nation's attention to her internal problems and demands immediate remedial action to relieve those problems, stated that:

"Pervasive unemployment and underemployment are the most persistent and serious grievances in minority areas. They are inextricably linked to the problem of civil disorder.” [Summary, Report of the National Advisory Commission on Civil Disorders, p. 24]

This committee, recognizing the seriousness of the crisis facing our nation, has before it two bills—both containing essential and admirable ideas which speak directly to these basic problems of unemployment and underemployment.

Before speaking directly to the employment bills before the committee, I must emphasize a particular concern, shared by NACD members throughout our nation. The focus of efforts to alleviate unemployment and underemployment in our nation have been almost wholly urban centered. We call attention to certain basic problems which we feel perpetuate our urban employment crisis the manpower problems of rural America.

Plagued by a serious lack of jobs, each year rural America sends thousands of unskilled, often illiterate, immigrants to the ghettos in our cities. Urban America, with its abundance of industry, provides an increasing number of skilled jobs which these immigrants cannot fill.

NACD recognizes the need to extend massive effort at both the rural and urban levels. We strongly urge that the stated concern for effort at the rural level be translated into action coordinated with the problems in our urban areas. We are convinced that manpower efforts must go beyond the treatment of symptoms of our crisis—the increasingly large concentrations of unskilled people, Manpower employment efforts must be designed to deal with basic and perpetuating causes.

We believe that the effort to deal with our manpower problems must eventually result in regional schemes, in some parts of the country, schemes which are capable of helping coordinate rural and urban job creation, training, placement and supportive services. To accomplish such coordinated efforts within mixed urban and rural areas it will be necessary to respond to the initiative of state and regional public and private agencies which have the flexibility to administer such programs. We are aware of the complexity of such regional solutions. More importantly, we realize the complex, intertwined and overlapping employment problems in our nation; and we also realize that effective solutions will not come easily.

Recognition of rural America's role in the perpetuation of our national employ. ment crisis without some serious attempts to provide financing and ideas for coordinated solutions constitutes serious and dangerous neglect.

NACD feels strongly that it is extremely important to utilize industrial and governmental resources to provide jobs for our hard-core poor. We have expressed a strong commitment to such an alliance from our beginning discussions of manpower efforts.

1 The North Carolina Fund was established in October, 1963, through a grant from the Ford Foundation, as a private, nonprofit corporation. Since April, 1964. It has attempted through financial assistance to eleven local community action agencies, through grants to state and

private institutions, and through demonstration projects of its own to experiment with new ways of helping North Carolina low-income people break out of the eyele et poverty.

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