women are entitled to jobs on the same basis as men, in which case the job-creation program in the United States is of an order of magnitude that nobody has yet calculated. As I see the actual working of the economy, every time jobs expand more and more women get drawn into work, and the poorly prepared Negroes get further behind. These are some of the considerations involved in changing the Employment Act.

The next thing one has to think about is whether we mean jobs or jobs that carry a living wage, because you face the possibility of the inflow of many of the 612 million people from outside of the central cities who are now working but who are not making a decent living.

I would suggest that the Joint Economic Committee broaden the challenge implicit in the Kerner Commission Report, and think through what might be called the long-term public employment policy for the United States, which took into consideration rural poverty, rural underemployment, the implicit demands for women for work, and the special problems of the Negro, because unless these pieces are considered together, no specific program aimed at creating 2 million jobs over the next few years for Negroes will succeed.

Representative BOLLING. Thank you very much.

Dr. Siegel?

STATEMENT OF IRVING H. SIEGEL, SENIOR STAFF MEMBER OF THE W. E. UPJOHN INSTITUTE FOR EMPLOYMENT RESEARCH

Mr. SIEGEL. Thank you.

My statement is 27 pages long.

Representative BOLLING. Without objection, it will be put in the

record.

Mr. SIEGEL. I am merely continuing my sentence to tell you that I will summarize, rather than read. I realize reading is unfeasible. I shall, however, try to cover the three main topics which the three divisions of my paper treat.

I have chosen to begin the first two divisions with the two sentences that the Kerner Commission devotes to the Employment Act-two sentences alluded to, but not literally quoted, in the letter of invitation from the Joint Economic Committee. Literal quotation makes the sentences more interesting for the people who have to administer the act. The third part of my paper is devoted to a discussion of the Kerner Commission's recommendations with respect to employment.

First I should like to refer to the "basic conclusion" of the Kerner Commission. There are two "basic conclusions," incidentally, which are quite different, but both labeled as such-unless I misread. The first labeled "basic conclusion," which occurs in the summary, says that the Nation is moving toward two societies: one white, one black; separate and unequal. It is this basic conclusion I now consider.

This may be too hopeful a statement. It suggests an equilibrium which could eventually be reached, but the dire view of the Commission entails much more. One might suspect that, in between, that as we go this route, there will not be two communities, but very many competing communities. It seems that we are in danger of an extensive breakdown in our country of the sense of community. Such a breakdown would

involve, among other things, very great difficulty for the pursuit of a balanced national economy, for the pursuit of national objectives at home and abroad.

Symptoms of such breakdown, of course, are often stressed. There is the flight to the suburbs, there are the racial disorders themselves, there are outbreaks on the campuses, there are public service strikes; and, of course, there is the old occasional violence in labor-management disputes.

The real question is whether or not what I call "focused rage" becomes a substitute for the technique of parliamentary action in the United States, whether or not it becomes a substitute for the more orderly processes that we have pursued in the past. This question has an important bearing on the meaning of the Employment Act and the future of the Employment Act.

This prologue brings me to my first main topic.

As I see the Employment Act, it is not a commitment by the Federal Government, without regard to anything else, to supply jobs, to promise jobs, to create jobs. It actually is a framework for the balanced pursuit of economic policy with respect to all governmental and private objectives, but with a heavy accent on employment.

I think that one needs merely to read the 109-word Teutonic sentence that constitutes the Declaration of Policy, section 2 of the act, in order to see this. Very rarely are these words quoted correctly or completely. Strangely, there are instances, as in the Report of the Commission on Rural Poverty, in which the whole sentence is quoted verbatim, but without any evidence that the Commission appreciates the balanced phrasing of the sentence.

I think it is of some importance that there is a great tendency to misstate what the Employment Act is. This brings me to my second main point-the implication in the Kerner Commission's second sentence, partially quoted by your committee, the implication that the act has failed. I do not believe at all that the act has failed. I think that, during the regime of the Employment Act, remarkable progress has been made, especially in the direction of moderating recessions. I have kind words even for the active fiscal policy pursued in the past 7 years, which has exacted prices not yet fully recognized, prices still to be paid by our economy. That active policy has, nevertheless, demonstrated new dimensions, new orders of possibility, under the act. Certainly, that active policy has helped drive unemployment down to such a low level that, in my opinion, we now can see the stubborn hard core of unemployment, a residual unemployment earlier concealed. We see this residual against the background of affluence. I believe that part of our present economic difficulty is actually a result of the success of policies pursued under the act. These troubles of which we are now so painfully aware in the ghetto are, in a sense, curious evidences of success in driving down unemployment.

This point is important because there is a danger that the idea of balanced economic policy may be thrown out of the window, that the act might be declared obsolete, that we shall be urged instead to engage hereafter in serial crash programs to remedy this or that residual or fractional unemployment problem. Tomorrow, some other commission may release another report, which directs our attention to still some

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other residue, some other difficult problem. We should not flap from one problem to another without having some kind of a balanced comprehensive concept as to what we are trying as a nation to do.

Price stability-more or less or limited inflation, if you prefer is a meaningful national objective whether we like it or not. Maintaining some kind of realism in our balance-of-payments position is also important, whether we like it or not. We have to continue the other work of the Federal Government, whether we like to or not. We have an unliquidated problem in Southeast Asia; and, no matter what our feelings are about that undeclared war, we have to bring it to a termination that is meaningful with respect to the future of this country, as well as our present posture. There are State and local problems, too. There is a question of harmonizing Federal activity, not only with respect to these lower jurisdictions, but also with respect to private enterprise.

Incidentally, all of this is in the act, all of this is in that tortured sentence that constitutes the declaration of policy. It was written not with ordinary ink, but with the blood, sweat, and tears of our history. I believe it is an adequate summary statement of what our country is all about; and I think it would be ridiculous to throw aside all these balanced considerations every time we have some urgent problem. The difficult challenge instead is to see what kinds of hard choices we need to make to accommodate new requirements. Our requirements will inevitably evolve, even if the Employment Act stands in its present form.

Now I come toward my last section. Before taking up my final topic, however, I want to say that I like the Kerner Report's emphasis on jobs. It does not go altogether for the disjunction between jobs and income, a disjunction which was being sold to us when some other devils were being recognized-when the devils were supposed to be described by "automation," "cybernation," or some other barbarism of the new lexicon. Now it seems that, instead of acknowledging devils with no personality, devils that are vague, abstract concepts, we are ready to personify the arch devil-now it is white racism, the white society. The new deviltry which the Kerner Commission is defining brings new difficulties for both the analysis and remedy of existing basic economic problems. Anyway, I do like the idea that the Kerner Commission, even though it identifies white racism as the devil, does emphasize employment as a major source of remedy. This idea is important for those who believe in balanced economic policy.

I am impressed that, even when the Kerner Commission puts in a good word for income supplements, it emphasizes the importance of work. This emphasis is significant, not only for assisting the unemployed themselves, but also for the maintenance of incentives on the part of those people who are currently employed and whose earnings and whose productive energies will remain the basis of the transfer payments needed to improve the income distribution in our country. The Kerner Commission says that it favors a program of income supplementation that does not deteriorate the incentives of the people involved, that encourages those who can or do work to go forward toward fuller employment. I regard this standard as sound. Now I come to the last part of my statement, which deals with the Kerner Commission's employment recommendations.

The Commission states that work, especially in a nonmenial job, a job having a future, is vital for counteracting poverty and unrest in the ghetto. It describes strategies in six areas the consolidation and concentration of efforts to recruit and place workers, the removal of barriers to employment and promotion, the creation of a million new jobs in the public sector in 3 years, the creation of a million new jobs in the private sector in 3 to 5 years, the economic development of areas of urban and rural poverty, and the encouragement of Negro ownership of businesses in the ghetto.

Even though there is an urgency about these proposed improvements, it does not seem at all clear that the Kerner Commission's views with respect to the scale of the needed national effort and the time rate of accomplishment will be realized. There are three reasons, three broad reasons, for believing that the national effort will not be mounted on a scale and according to the time schedule that the Kerner Commission recommends.

One reason is that technical difficulties abound. It is especially difficult to accomplish an extensive organization or reorganization of manpower services while a vast throughput is also sought.

I am impressed with the concern that the Kerner Commission shows for organizational matters. Experience in these matters indicates that it is very hard to revise administrative structures and, at the same time, to accomplish vast operating feats through the very structures that are undergoing revision.

The second reason that the scale and time suggestions of the Kerner Commission Report will probably not be met is that the proposed programs must compete with other public and private commitments and objectives to which other speakers have already alluded. The third reason is the slow generation at best of a "new will" to resolve decisively the basic problems related to civil disorder. The phrase "new will" was actually used by the Kerner Commission, which noted that what is needed more than anything, more than new programs, is a new will. It is pertinent for us to consider whether this new will could be generated quickly enough and on a sufficiently urgent basis to accomplish what the Kerner Commission wants.

I want to say something here about public service jobs, which can be provided, supposedly, by new will. What is interesting, however, is that we do not seem to have enough old will to assure that neglected public service tasks will be performed. Even without the pressure of ghetto explosions, we have recognized all kinds of public requirements in the cities, in the States, even on the Federal level—with respect to pollution and so forth. We do not see these tasks being very earnestly addressed.

This observation is important because it relates to the notion of racism. Notice that the white majority, the white society, the white institutions that the Kerner Report talks about-that these institutions are remiss even in solving what would seem to be essentially white problems. Apart from the creation of public service jobs for employment's sake, with government as employer of last resort, there is an unmet challenge for government to become employer of first resort. Many activities are neglected which only the government, if anybody, will perform-State and local governments particularly but also the

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Federal Government. Neglect impairs the quality of life for all, including the white majority.

It is important not to look merely upon residual employment creating activities of Government. We have moved into the service sector in a rather big way, and one of those service sectors-if you use the word sector in a very broad sense is Government itself. We have to define and man an increasing number and variety of jobs with career ladders within the Government itself. The jobs are capable of employing the whole gamut of skills, from the lowest to the highest. Within this kind of a framework there would be ample training opportunities for the hard-core unemployed, too. I am not recommending this unfinished Government business as an alternative to emergency action. I am proposing that, if we flap, if we keep on talking about meeting this or that urgent requirement, we shall continue to defer the vast and comprehensive range of neglected activities that ought to be performed by Government as employer of first resort. This deferral accentuates demands for last-resort activities.

Now, I should like to concentrate on the problem of new will, which is basic to the whole report. I am near the conclusion of my remarks.

The experience of reading the report, which is a sort of nonfiction equivalent of "Moby Dick," gives me the hindsight to have offered some advice to the Commission on the generation of a "new will" and the movement toward a "true union," two phrases used in the report. First, the Commission, in my opinion, should have taken explicit account of the need for balanced pursuit of national objectives. Such a pursuit is implicit in the Employment Act; and all other Federal legislation, concerning manpower as well as other categories, has to fit into some kind of a plausible whole.

The larger-systems approach and cost-effectiveness analysis, of which so much is heard, ought to be applied—even crudely and experimentally-across Government programs and across periods of time. Alternative trial balances should accordingly have been prepared or proposed. The problem might have been commended to the Council of Economic Advisers, to the National Planning Commission, which has a Center Priority Analysis-I am pleased to hear that Dr. Colm's organization has already done some useful work in this direction, with or without a request from Kerner Commission-and to organizations maintaining econometric models.

We should, for example, be able to consider how much inflation would be generated or how much might be tolerated to accommodate the Kerner Commission's recommendations regarding employment, education, welfare, and housing. What are the implications of the report's recommendations for the end game in Vietnam? How much constraint on new expenditures for urgent domestic programs is really implicit in our inflationary and balance-of-payments difficulties? What about taxes to implement the recommendations with minimal price effects?

These are not easy questions. They point to a need for progress toward a calculus, however rough, to facilitate national intergroup bargaining on vital issues that could also be settled far less peaceably. We need a calculus of consensus for the engineering of consensus. I am talking of a consensus based on a proper understanding of alternatives and on the competition of objectives.